The Prudent Yield-Hog

It almost seems redundant to suggest that income-oriented investors place great emphasis on yield. After all, collecting income is often seen as an antidote to the seemingly more tenuous pursuit of share price appreciation. I and others can and do write till we’re blue in the face about how dangerous it can be to get too carried away by the chasing high yields (the higher the yield, the greater the business risk and the more likely it is that the dividend will stagnate at best or be cut). But emotions are a factor: When yields rise above 10%, it’s amazing how willing we think we are to accept the risks of capital loss. Beside emotion, we have to consider need when we actually want or have to spend cash generated by investment portfolios. In other articles, such as the Triple-Play income strategy I introduced recently, I offered one way to... Read more