Rethinking the Role of Income Investing

You Play Many Roles. Income Investment Do, Too.

If you had to choose one word, how would you define yourself? Parent? Partner? Chef? Teacher? Accountant? Entertainer? The truth is, you are more than any one of these titles. You may in fact be all of them, and then some. At any given time in our lives, each of us plays many different roles.

The same can be said for income investments. At first glance, you may simply see income as bonds or fixed income funds that can help you generate interest income. And, if you're not ready for retirement, you may dismiss them as irrelevant. But income investing goes far beyond bonds to include dividend-paying equities, real estate investment trusts (REITS), and utilities - all of which can play many important roles in your portfolio.

Yes, they can help you generate a stream of income - no small feat in today's market environment. But they can also do much more. Start Rethinking how the Role of Income Investing  may help you:

01
Supplement Your Salary
Your job provides a salary to live on—but wouldn't it be nice to have a little extra? Investments like bonds and dividend-paying stocks can provide another source of cash to help you keep ahead of the bills or buy something special.
02
Reduce Portfolio Volatility
Extreme market volatility can cause investors to buy at market highs and sell at the lows, which can take a toll on investment returns. Income-producing investments like bonds have helped reduce volatility in stock portfolios, while not generally having a major impact on long-term performance. For investors, lower volatility can help reduce the urge to sell at the wrong time.
03
Grow Your Portfolio
Many people don't think of stocks when it comes to income. But as we've seen, stock dividends may provide the income and downside protection you'd expect from bonds, plus the growth potential of equities.

Dividend-paying stocks can rise or fall, as can the dividends the companies pay out. But taken together, price appreciation and reinvested dividends have the potential to boost your total returns.
04
Fight Inflation
Simply put, inflation is the enemy of investing. Because if your investments go up, a portion of that created wealth is stolen away by inflation. The impact of inflation can be devastating.

So your investments must not only grow to provide for your future needs, they must also overcome the impact of inflation on your future spending power.

 

Role of Income InvestingGet Started Today

Download Rethinking the Role of Income Investing  to start learning about income possibilities.

Work with your financial professional to develop the income stream you need from your portfolio. Remember, the longer you can live off your interest and dividends, the more opportunity your principal has to grow. Find a Financial Professional.

 

0217389-00005-00 Ed. 05/2014