Investing for Income
Posted on | June 8, 2011 | No Comments
The CNN Money web site had an article today regarding investing for income. You can read the full article here: Invest for Income: How to do it now.
The article recommends finding stocks that although have a modest dividend now, have the ability to boost their dividends in the future. The article references a study completed by Edward Jones that found that on a total return basis shares in the S&P 500 with the highest yields between 1972 and 2010 actually lost money for investors (.03%). While shares of stocks that were dividend growers actually actually returned 9.6% during that same period.
In the article, you’ll find multiple funds and several stocks that the author recommends when building out a dividend portfolio. Some of the funds focus on companies that have continuously raised dividends for 25 years [SPDR S&P Dividend (SDY)]. Another fund focuses on companies that have raised dividends for the last 10 years [Vanguard Dividend Appreciation (VIG)]. The author also recommends an international fund with a similar philosophy [Thornburg Investment Income Builder (TIBAX)]. Although this last fund also holds bonds.
It seems owning these or similar funds could form a nice core to a portfolio and could be augmented with individual stocks.
I don’t currently own any of the funds listed above. However, I do own Microsoft (MSFT) which was listed as an individual stock to consider.
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