Dividends & Income Digest: Income Vs. Capital Gains

This week's topic comes courtesy of Double Dividend Stocks: In the tug-of-war between income vs. capital gains, how does an income-oriented investor balance the two?
In their recent article, "Income Vs. Capital Gains: A 7-8% Quest," DDS wrote:

There comes a time for many investors when they make the switch from targeting capital gains to generating income from their portfolio. This transition brings up many conundrums and issues to ponder, such as your yearly returns vs. those of the market.
In 2017, the Dow had a 25% return and the S&P had a 19.4%% return, dwarfing the returns of many dividend-rich sectors, such as utilities, real estate, energy and telecoms, which found themselves on the bottom of the heap:

On a personal level, each investor decides their needs, and, hopefully, goes with what works best for them. A 30-something can take on more risk due to their longer investment period vs. someone in their 60s, who is retired. If you're meeting your annual investment income target, should you care whether or not your returns lag the market in a rip-roaring year?
For their Marketplace Service, Hidden Dividend Stocks Plus, DDS focuses on dividend and distribution coverage ratios. "Chasing higher yields that aren't backed up by adequate cash flow can often lead to losses, no matter how high the yield is," DDS explained in their recent article. "Rather than focusing on capital gains and hitting home runs, we... Read more