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When it comes to maximizing dividend income, the preference for dividend ETFs over individual stocks emerges from the diversification they offer. This diversification significantly mitigates both overall and company-specific risks, such as earnings volatility. For long-term income generation, it is vital to steer clear of investments that might deliver enticing dividend yields at the cost of deteriorating net asset value (NAV).
Investors should focus on selecting ETFs that deliver not only strong dividends but also maintain price stability over the long haul. This approach ensures that the portfolio's overall value does not decline while collecting dividend payments, offering a more sustainable income stream.