If you are an investor who's retired and hopes to live off the income that your portfolio is generating, then we would focus just on the dividend yield.
Sentiment: NEGATIVE
You've always got to think about having some fixed income in your portfolio as well as equities.
When you look at dividend returns on equities versus bond yields, to me it's a pretty easy decision to be heavily in equities.
If you're an investor who wants a little bit more from the capital-appreciation side of things, but still likes this concept of getting 'paid by the company,' then we would tell that investor to pursue shareholder yield.
Income-producing unit trusts are brilliant because if you can accept capital values will be volatile for a while, your dividend income will always be higher than what you get in the bank.
An investor in Duke Energy is expecting a dividend payment. That's roughly 70 to 75 percent of the earnings I produce. The business that goes with that level of dividend is a business that has more predictability, more stability.
Yes, prudently invested contributions to the Social Security fund may bring greater dividends, but those contributions would also face a greater risk. It would be like gambling. We should not gamble with the investments and the future of the citizens of this land.
I do not own a single security anywhere that doesn't pay a dividend, and I formed a mutual-fund company with that very simple philosophy.
The bottom line is this: Cash, in modest increments, has a role in any portfolio. But unless you are Warren Buffett, you should limit it to 2 or 3 percent.
Both from the standpoint of stocks and bonds, an investor wants to go where the growth is.
I will promote savings and investment by maintaining the 15% rate on capital gains and dividends. I will eliminate the tax entirely for those with annual income below $200,000.