Profile: Income investors

There's no hard and fast rule about who should use this kind of investment style. Since income is produced by typically large, stable, and profitable companies, they could help form the bedrock of almost any portfolio for almost any investor.

Asset management companies offer managed funds - also known as 'mutual funds' - as an opportunity to invest in lots of different dividend paying stocks or bonds, through a single invesment.

Your money is pooled with that of other savers and invested by a fund manager who can choose established, cash generative companies they they think will satisfy the income goals of the fund. Spreading (or diversifying) the risk across a number of companies is less risky than investing directly in individual stocks. 

These type of funds - known as equity income funds- could suit a lot of investors even if the income isn't required. Instead it can be reinvested and the accumulation of the dividend should add significant value over time. It matches what many people want: income as well as some capital growth potential.

There are many different kinds of savers that might be interested in income investing. Here are some of the circumstances in which you might explore this option. 

 

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