Do The UKâ€™s Best Income Stocks Offer Warmth In The Midst Of A Markets Winter?written by Bella Palmer
With the outlook for stock markets looking somewhat bleak, those investing online
But it’s important to remember that over a longer period of time, taking into consideration compounded returns, those figures increase significantly. If a £10,000 investment returns 4.7% today, having invested in the same fund 10 years ago and reinvesting all dividends over that period, the yield would turn into a much more attractive 8.4%. And in the case of the unattractive 2.5%
The risk of investing for dividends is that they can be reduced or cancelled with no notice. However, unless forced into it, fund managers and companies try to avoid doing so. Dividends are used to encourage investors to keep the faith during tough times and especially mature companies with strong cash
And with markets currently down, fund and individual stock dividend yields are up, making it a promising moment to invest for income long term. When markets recover, yields as a percentage of initial investment are likely to benefit significantly. So regardless of the Brexit and wider international jitters that seem set to mean 2019 is another volatile year, income investors might consider building up their insulation with some funds and stocks with an attractive history of dividends.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
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