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Good morning,
When we buy every day products and services, we buy what we need. Your investment portfolio should be no different.
Broadly speaking, there are two investing phases:
- The accumulation phase
When you aren’t actively drawing on or using money from your portfolio, the primary function of your portfolio is to grow to a level that will support you when needed.
- The distribution phase
When the time comes, the purpose of your portfolio shifts from growth to supporting you by generating income.
Different investing phases often require different approaches.
Total returns are what matters most during the accumulation phase.
In some cases, that may mean high yielding investments. But the point remains, when in the accumulation phase, the focus is on total returns, not necessarily income.
When in the distribution phase, income is king. If you can live off the income your portfolio generates, you are completely free of worrying about stock price fluctuations.
After all, it doesn’t really matter what a stock’s price does if you have no need to sell it because it’s providing you the income you need.
Assets that don’t produce income are less suitable for those in the distribution phase because they only create cash when sold – and you can’t control market prices when you need to sell.
This puts you at the whim of the market. Relying on stocks to be ‘up’ when you need them to be is not a well-thought out strategy.
Your investments should match your needs. Simply put, a higher yielding portfolio will generate more income per dollar invested.
This means a smaller portfolio in dollar terms is needed for a given level of income.
Additionally, if your portfolio income exceeds your needs, the extra proceeds can be reinvested into more high yielding stocks, REITs, and/or MLPs.
This creates a positive cycle of rising income.
Investing in companies likely to increase their payments over time only strengthens this cycle.
To your high and compounding dividend income,
Ben Reynolds
Founder, Sure Dividend
P.S. We just published the new July 2025 edition of the Sure Retirement Newsletter this morning (7/13/25)! And we are offering a deep discount until 6:00 PM CDT tomorrow (7/14/25) only, reducing your price from $199/year to just $80/year. Click here to start your risk-free 7 day trial with the deep discount price locked in.
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