baldchap wrote:Back on thread, a more interesting point would be suggestions for a basket income/growth pre-retirement, as I believe the choices would be different upon retirement.
Maybe to ponder the question,
'if I invested in (Global) income & growth IT's with a yield less than 4%, would I actually need to seek higher yield upon retirement?'
This takes us back to the Total Return argument. You might get a higher total return from ITs with a higher yield. This was certainly the case for a long period, as an examination of the records of the FTSE350 High Yield and Low Yield indexes (HIX and LIX) will reveal.
My chosen method of investment is to maximise dividend income, using a fairly wide spread of ordinary shares. My IRR since 1987 has been 9.6%, although about the turn of the century it was nearer 13%. Currently the yield is about 4.6%, which obviously varies according to the capital value if income stays fairly level. In recent years there have been rises and falls. This is the record of the change in cash dividends since the turn of the century:
Finacial Cash Divs
Year to % Change
05-Apr-00 45.60%
05-Apr-01 26.11%
05-Apr-02 15.10%
05-Apr-03 3.72%
05-Apr-04 24.84%
05-Apr-05 2.01%
05-Apr-06 45.46%
05-Apr-07 17.49%
05-Apr-08 40.76%
05-Apr-09 -12.23%
05-Apr-10 -46.02%
05-Apr-11 41.95%
05-Apr-12 23.25%
05-Apr-13 23.68%
05-Apr-14 9.49%
05-Apr-15 11.84%
05-Apr-16 -5.51%
05-Apr-17 26.59%
05-Apr-18 21.38%
05-Apr-19 0.16%
05-Apr-20 10.58%
05-Apr-21 -23.88%
05-Apr-22 23.28%
05-Apr-23 11.03%
For most of this time there has been reinvestement of dividends and some capital additions from time to time. You can see where major falls occurred and the subsequent recovery. Were I to be living off the income, less would be reinvested, and so there would be a lower level of increases. However this is likely to be less than 5% of the change in dividends, if that.
TJH