ETFs + Dividend Stocks or How to Analyze Mixed Strategies

Many investors combine multiple strategies in their portfolios. One of the most common combos? ETFs and individual stocks. But here’s the real question: how do you analyze your portfolio when you mix both? Does it make your life easier… or way more complicated?

We explore what each strategy brings to the table, how to properly review and balance your holdings, and how to avoid turning your portfolio into a confusing mess. Whether you’re 100% ETF, 100% stocks, or somewhere in between—this one will help you bring clarity and purpose to your investing strategy.

You’ll Learn

What Makes ETFs and Stocks So Different?
Mike and Vero start by defining what separates individual stocks from ETFs—and why some investors combine both.

Stocks offer full control, flexibility, and transparency. You know exactly what you own and why.
ETFs bring simplicity, broad diversification, and professional management with lower fees.
While both are useful, your level of involvement and conviction will vary depending on the path you choose.

The Dividend Triangle vs ETF Metrics
The dividend triangle is DSR’s cornerstone for evaluating stocks—but it doesn’t apply to ETFs.

For stocks, Mike uses the triangle: revenue, earnings per share, and dividend growth. It shows business strength and signals when things might be going wrong.
For ETFs, you’ll need a different framework—like strategy clarity, top holdings, sector and geographic allocations, fees, and fund size.
Always review the ETF’s fact sheet and website to fully understand what you’re buying.

Crafting a Thesis for ETFs and Stocks
Mike explains how to create a strong investment thesis—and why it’s essential for both types of assets.

For stocks: your thesis should include a clear narrative, a simple business model (playbook), growth vectors, and an economic moat.
For ETFs: your thesis revolves around the fund’s strategy, exposure (sector, theme, or geography), and how it aligns with your goals.
If you can’t explain what your ETF does in simple terms, it’s probably too complex for your portfolio.

Identifying the Risks in Each Approach
Risks look different for stocks and ETFs—but understanding both is key to making sound decisions.

With stocks, the risks are tied to business-specific challenges, like poor earnings, high debt, or market disruption.
ETFs come with their own pitfalls: strategy misalignment, hidden fees, lack of liquidity, and overconcentration in top holdings (e.g., the “Magnificent 7” dominating S&P 500 ETFs).
Don’t rely on past returns to choose your ETFs—know what’s under the hood.

Portfolio Reviews Look Different Too
You can’t apply the same review process to both assets. Mike outlines how to stay on track.

For ETFs: a quick quarterly review is enough—check if the strategy, fees, and exposure still match your plan.
For stocks: use the dividend triangle to evaluate trends and dive deeper each quarter.
Regardless of your mix, set a calendar reminder for a yearly portfolio cleanup.

Blending ETFs and Stocks the Right Way
Mixing the two can work well… but only if you do it intentionally.

Some investors build a “core and satellite” portfolio: ETFs as the foundation, and stocks for added performance or personal conviction.
Others use ETFs to gain exposure to specific sectors or international markets while managing hand-picked stocks locally.
Avoid unnecessary overlap (like buying Canadian dividend ETFs and also holding 10 of the same banks and pipelines).

Simplicity and Consistency Win
This isn’t about proving which strategy is best—it’s about sticking to the one that works for you.

Most DIY investors underperform because they change strategies too often.
The best results come from clarity, conviction, and a disciplined process—whether you prefer stocks, ETFs, or a mix.
As Mike says: “You can borrow someone’s idea, but you can’t borrow their conviction.”