Meager Income

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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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