Investing in the markets and exchange traded funds (ETFs) come with a variety of risks, but stashing away some cash into some investments that yield dividends may help mitigate some of those risks while generating extra income.

Solid corporate earnings from a number of large corporations have led to dividend increases, reinstatement or, in some cases, dividends for the first time ever.

Historically, dividends have provided a hedge against inflation since dividend growth usually eclipsed the rate of inflation, writes Jeremy Schwartz for IndexUniverse. [Dividend ETFs: Which Companies are Paying?]

Though dividends have been averaging on the low side during the 2000s so far, WisdomTree believes that the current investment environment may be the basis for a shift toward a greater emphasis on dividend-paying equities. [How to Easily Find High-Yielding ETFs.]

Dividend indexes either hold all dividend-paying equities for a segment of the market or the indexes place screens to pick out select dividend-paying equities in a segment of the market – the latter type focuses on high-yielding equities, but loses some of its representativeness.

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