It’s much better to invest in a bond fund like the Vanguard Long-Term Bond ETF, ticker VCLT, or the iShares Investment Grade Corporate ETF, ticker LQD. You’ll be able to buy or sell these just like stocks with little or no fees.
Preferred shares are also higher up on the list of liquidation, so if a company files bankruptcy, preferred shareholders get paid before common stockholders but after creditors.
With these investments, you can pick individual stocks in the sectors or the entire sector through one of the funds. You’ll get a little more diversification and safety with the funds.
Dividend stocks can produce outsized returns even compared to the rest of the market. The Vanguard Dividend Appreciation fund with its 1.8% dividend yield has provided a 12.4% total return annually over the last decade.
Combining the four safest investments; bonds, preferred shares, stocks of safety sectors and dividend stocks in a portfolio can still give you a total return of eight- to nine-percent a year along with dividend yields.