Why Income? More Investors Need More Income
It’s clear. Today, more investors should be looking to income to play a larger role in their portfolios — to supplement a paycheck as well as grow a nest egg. Just as clear is the need for new thinking to find that income.
A New Reality Means New Challenges
With average income — even in affluent households — dropping significantly since 2009 and workers of all stripes pushing off retirement, one thing is certain: investors need a new approach.
Sullivan Rebuilding Investor Trust Study, 2012
Lower Risk, Higher Return
While investors of all ages need more income, many also need ways to manage volatility. The answer could be in stocks of corporations that pay dividends. This graph shows that stocks have tended to perform better while paying or increasing dividends. New payers and those growing dividends can provide reliable income, strong returns and lower risk.
Ned Davis Research, Inc.
03/31/86 – 03/31/12
IN SEARCH OF INCOME: A COLUMBIA MANAGEMENT WHITE PAPEROpportunities and risks for today's investors
30 years of declining interest rates have rewarded bond investors with a lasting price tailwind. Add to this the appeal of fixed income's relative safety, and the result may be portfolios heavily concentrated in core bonds that may no longer meet investor needs. This paper describes this phenomenon and presents a set of solutions to help improve the success of portfolios in a rising rate world.