What is the best way to calculate the total
yield of a stock portfolio?
Not exact matches
There are a multitude
of reasons as to why this occurs but it's a powerful enough force that many investors have done quite well for themselves over an investing lifetime by focusing on dividend
stocks, specifically one
of two strategies - dividend growth, which focuses on acquiring a diversified
portfolio of companies that have raised their dividends at rates considerably above average and high dividend
yield, which focuses on
stocks that offer significantly above - average dividend
yields as measured by the dividend rate compared to the
stock market price.
Historically, someone in my situation would have constructed a «balanced»
portfolio of fixed income investments and
stocks, with the fixed income portion likely making up at least half
of the
portfolio and
yielding five percent or so.
November 2014 Quick Hits: November marked the beginning
of me focusing on raising the overall
yield of my
portfolio to provide a larger base
of slower growing, high
yielding stocks.
For
stocks, it's important to have
stocks in your
portfolio from a large variety
of companies, including companies in different sectors or industries, such as consumer staples or materials; from companies
of different sizes, such as large - cap or small - cap
stocks; from companies in different countries and from companies that either have growth potential or good dividend
yields.
The methodology provides a well - screened group
of stocks that also delivers
yields greater than the market (S&P 500
yields ~ 2 % while the
stocks in our
portfolio have an average
yield of 6.5 %), safety in the sustainability
of the
yield because
of strong free cash flow, and the potential for capital gains as each
stock is currently undervalued.
As you can see in the chart below, one
of the
portfolio's strengths is the freedom it has to go beyond traditional sources
of income and pursue nontraditional income sources — such as ETF exposure to bank loans, preferred
stock, and emerging market debt — in order to seek
yield.
The High
Yield Dividend Champion Portfolio attempts to capture the best high yield, low payout stocks with a history of raising divid
Yield Dividend Champion
Portfolio attempts to capture the best high
yield, low payout stocks with a history of raising divid
yield, low payout
stocks with a history
of raising dividends.
Kimberly - Clark Corp (KMB), a global manufacturer
of personal care products, is the featured
stock in April's Safest Dividend
Yields Model
Portfolio.
The High
Yield Dividend Newsletter
portfolio seeks to find some
of the highest -
yielding stocks supported by strong credit profiles and solid business models, but not always robust traditional free cash flow.
If you need income from your
portfolio and want some
of the favorable attributes that dividend
stocks have, then the Vanguard High Dividend
Yield ETF is a smart choice for you.
In 2016, we added two new Model
Portfolios, Exec Comp Aligned With ROIC and Safest Dividend
Yields, to go along with our longstanding Most Attractive & Most Dangerous
Stocks Model
Portfolio, which has a long history
of outperformance.
«A conservative investment
portfolio comprised
of 60 % fixed income, 35 % equity investment or
stocks, and 5 % in a high
yield savings account (cash equivalent).»
While some investors choose to go it alone and select individual
stocks for the income portion
of their
portfolio, the beauty
of high
yield ETFs is that they spread the individual company risk across several issues, often across sectors, and sometimes, even across countries.
Although decades
of history have conclusively proved it is more profitable to be an owner
of corporate America (viz.,
stocks), rather than a lender to it (viz., bonds), there are times when equities are unattractive compared to other asset classes (think late - 1999 when
stock prices had risen so high the earnings
yields were almost non-existent) or they do not fit with the particular goals or needs
of the
portfolio owner.
Gray and Vogel say that, «regardless
of the
yield metric chosen, the predictive power
of separating
stocks into high and low
yield portfolios has lost considerable power in the last twenty years.»
If you have a huge portion
of your
portfolio in high dividend
stocks or high -
yield bonds, you should diversify.
The lowest 20 percent
of stocks ranked by shareholder
yield are placed in the first quintile and the next 20 percent in the second quintile and so forth until we have five
portfolios of stocks.
I've used John Hussman's method
of estimating expected returns for
stocks (using a simplified version the model that relies on just the CAPE ratio) and the beginning bond
yield for the expected return for the bond portion
of the
portfolio.
But in the last few episodes
of sharp
stock market drops, bonds went up (US government bonds are a safe haven asset and appreciate in crisis periods) so the only thing better than 3 months worth
of expenses in a money market fund is having 3 + x months worth
of expenses in the bond
portfolio due to higher bond
yields and negative correlation between bonds and
stocks.
- retirement savings and income - Pre-59 1/2 72t Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model
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portfolio illustrations - asset allocation and
portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio optimization -
portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio management and value tracking - 401 (k) retirement savings - Cost
of waiting to save - Effect
of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical
Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Performance - Impact
of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types
of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation
of Employer
Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates -
Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Allocation Rebalancing -
Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Optimization and «Advice» -
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free
Yield calculations
- retirement savings and income - Pre-59 1/2 72t Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model
portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio illustrations - asset allocation and
portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio optimization -
portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio management and value tracking - 401 (k) retirement savings - Cost
of waiting to save - Effect
of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical
Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Performance - Impact
of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types
of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation
of Employer
Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates -
Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Allocation Rebalancing -
Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Optimization and «Advice» -
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free
Yield calculations
So while low and negative interest rates across the globe has inspired flows into
stocks, emerging market bonds and corporate credit in search
of higher
yields, keep in mind the high correlations
of these assets to oil prices and the advantages
of holding actual diversifiers in your
portfolio to smooth the ride.
For those new to the site, I track a high
yield / low payout
portfolio using Dividend Champion
stocks (
stocks with a history
of raising dividends 25 + years).
... In terms
of its peers, Consolidated Water generates a
yield of 2.62 %, which is on the low - side for Water Utilities stocks.Next Steps: With this in mind, I definitely rank Consolidated Water as a strong dividend
stock, and makes it worth further research for anyone who likes steady income generation from their
portfolio.
Given the huge opportunity cost
of allocating to cash or bonds at current
yield levels, even generally optimistic return assumptions for
stocks are enough to keep
portfolio level returns near 0 % real.
Add in a high -
yield stock dividend fund and you'll create a diversified
portfolio of income - producing ETFs.
With the current low -
yielding fixed income environment, I'm sure that a lot
of retired investors are looking to dividend
stocks as a way to increase their overall
portfolio yield.
If you were to place an equal weight (20 %) into each
of these
stocks, you would have a
portfolio with a
yield of 4.26 %, better than any
of the other solutions we've discussed so far.
Dianne invests the money in a
portfolio of Canadian dividend paying
stocks with a current
yield of 4 %.
The fund started out with the idea
of giving investors access to a diversified
portfolio of high
yield bonds on the
stock market.
In the case
of SYLD, the manager chooses what he considers to be the top 100
stocks based on shareholder
yield, as well as the
portfolio weights.
Indeed, Dow Theory Forecasts put
stocks yielding at least 8 % in its theoretic
portfolio, raising the odds
of a dividend cut, Hulbert adds.
Continuously declining long - term rates created two tailwinds for his
portfolio: 1) It continuously reduced borrowing costs for highly leveraged companies; and 2) Drove up values
of high
yielding stocks (look at what utilities, MLPs and REITs have done over the same time period).
Initially, we used eight characteristics to evaluate ETFs: expense ratio, average market cap, price - to - book, number
of stocks, bid - ask spread, turnover, impact on overall
portfolio expected returns and
yield as reported by Morningstar X-Ray.
More importantly, this is providing an example
of how bonds often are not correlated with
stocks (they don't move up and down together), thus giving us the diversification benefits
of including the fixed - income asset class in our
portfolios, while providing a higher
yield and higher expected return than cash.
The fund invests in a
portfolio of 412
stocks in all sectors except real estate, all
of which pay higher - than - average dividend
yields.
That is, the retiree may over-invest in dividend -
yielding stocks, losing the benefits
of portfolio diversification.
Consistently with the
stock holdings
of the analyzed
portfolio, the reference portfolio comprised large - cap equity ETFs, such as the Guggenheim S&P 500 ® Top 50 ETF (XLG), PowerShares High Yield Equity Dividend Achievers Portfolio (PEY), PowerShares Dividend Achievers Portfolio (PFM), and iShares Morningstar Large - Cap Value E
portfolio, the reference
portfolio comprised large - cap equity ETFs, such as the Guggenheim S&P 500 ® Top 50 ETF (XLG), PowerShares High Yield Equity Dividend Achievers Portfolio (PEY), PowerShares Dividend Achievers Portfolio (PFM), and iShares Morningstar Large - Cap Value E
portfolio comprised large - cap equity ETFs, such as the Guggenheim S&P 500 ® Top 50 ETF (XLG), PowerShares High
Yield Equity Dividend Achievers
Portfolio (PEY), PowerShares Dividend Achievers Portfolio (PFM), and iShares Morningstar Large - Cap Value E
Portfolio (PEY), PowerShares Dividend Achievers
Portfolio (PFM), and iShares Morningstar Large - Cap Value E
Portfolio (PFM), and iShares Morningstar Large - Cap Value ETF (JKF).
... has been designed to provide exposure to a
yield weighted
portfolio of Canadian dividend paying
stocks.
Municipal bonds can play an important role in an investor's
portfolio, offering a higher tax - equivalent
yield than many taxable fixed income alternatives, and the potential for
portfolio diversification to
stocks and other types
of bonds.
Though the periodic payments do add to overall
portfolio performance, dividend -
yielding stocks are not immune from the volatility
of the overall market.
Although most investors diversified beyond this model and incorporated small caps, foreign
stocks, high
yield bonds, and perhaps something more exotic like REITs or commodities, a simple mix
of 60 % S&P 500 and 40 % Barclays U.S. Aggregate Bond is often the shorthand definition
of a balanced
portfolio.
Ryan @ CML presents How to Calculate the
Yield on Cost of a Dividend Stock posted at Cash Money Life, saying, «Tips on calculating the yield on cost of a dividend stock, an important indicator of how your dividend portfolio is performing.&r
Yield on Cost
of a Dividend
Stock posted at Cash Money Life, saying, «Tips on calculating the yield on cost of a dividend stock, an important indicator of how your dividend portfolio is performing.&r
Stock posted at Cash Money Life, saying, «Tips on calculating the
yield on cost of a dividend stock, an important indicator of how your dividend portfolio is performing.&r
yield on cost
of a dividend
stock, an important indicator of how your dividend portfolio is performing.&r
stock, an important indicator
of how your dividend
portfolio is performing.»
The BMO Monthly Income ETF (ZMI) is a
portfolio of 10 other high -
yield exchange - traded funds, covering real estate investment trusts (REITs), corporate bonds (both investment grade and junk), emerging market bonds, and dividend - paying
stocks.
The orange line tracks a
portfolio of stocks that don't pay dividends at all, the purple line tracks
stocks that pay the lowest 30 %
of dividend
yields, and the green line tracks
stocks in the highest 30 %
yield group.
The dividend
yield of the S&P / TSX Composite Index is about a point lower than that, but it's easy enough to build a
stock portfolio that pays 4 % or more.
A
portfolio made up
of the 10 %
of stocks with the highest buyback
yields, rebalanced each year, was the best performer over the long term.
The
portfolio is comprised
of the high
yielding stocks in the S&P 500 with high price momentum.
If all you wanted was a 3.6 % per year income stream, you could just buy a
portfolio of stocks that had an average dividend
yield of 3.6 % per year or more (such as those above).