Good ways to invest for income.

There is a growing need for income sources as life expectancy getting longer, interest rates stays low.

Where to invest for income depends on your goal and what stage in life you are.

Income Portfolio – Dividend Growth vs Dividend Yield

There are 2 scenarios good investor would probably try to avoid:

  • Very High Income Yield -> very high risk investment
  • Very High Income Yield -> capital is taken to sustain the yield

The ideal scenario would be a sustainable growing dividends so the investor could “live off the income” and the capital raising itself over time.

Accordingly to the “Experts” income investor should look this year into:

  • Emerging Market Debt in Local Currency with sustainability carefully assessed.
  • Holding Cash in the short term to protect portfolio as the bond & equity markets are now on the highest levels. Caution is required. Low interest cash will protect portfolio in case of downturn and then can be used to buy income generating investments at lower, more attractive prices.

Here are some UK’s most popular dividend stocks the investors buying for high yields:

  1. GlaxoSmithKline (GSK) – 15 out of 18 fund managers have it – 5.32% yield at around 16/08/2017.
  2. AstraZeneca (AZN) – 18 out of 18 fund managers have it – 4.47% yield at around 16/08/2017.
  3. BP (BP.) – 13 out of 18 fund managers have it – 6.56% yield at around 16/08/2017.
  4. HSBC (HSBA) – 12 out of 18 fund managers have it – 5.09% yield at around 16/08/2017.
  5. Royal Dutch Shell (RDSB) – 11 out of 18 fund managers have it – 6.29% yield at around 16/08/2017.
  6. British American Tobacco (BATS) – 15 out of 18 fund managers have it – 5.14% yield at around 16/08/2017.

Personally I think that one of the best ways to invest for income is inevsting in investment trusts. Here is the list of Investment Trusts which pays more than 4% of income:

high yield investment trusts

Please note this article is not an advice. It’s just personal view regarding income investment.

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