Dividend Income Investing
Successful investors understand that dividends are a key component of a portfolio’s total return. This is particularly true during periods when the stock market is either stagnant or declining. As rates rise to more normal levels, bond prices will be pressured thereby making dividends a good alternative or complement to interest earned on fixed income securities. Furthermore, dividends may be taxed at a lower rate than interest income, increasing your overall portfolio return.
Who Should Invest for Dividend Income?
You are a long-term stock market investor but want to have a portfolio which tends to be less volatile than the general market.
You are still working but want to generate additional current income.
You are retired or close to retirement and want a regular, fairly dependable income stream to live on without having to liquidate your principal investment.
Dividends or Interest – What’s the Difference?
Interest is paid on debt securities/bonds. Typically, the holder of the debt security receives the same amount of interest every month or quarter. This can present a problem when rates rise as the bond holder’s interest payment may not keep pace with inflation.
A dividend is a payment made to shareholders from the profits of a corporation. While companies are not required to pay dividends, management will often choose to do so as an incentive to purchase shares in the company. Over time, many successful companies periodically increase their dividend payout to shareholders as the profits of the company rise. As a result, a well-structured dividend portfolio can actually provide a rising stream of income over time.
Why Choose Borthwick?
Investors can take comfort in knowing that their assets are being professionally managed by a firm which has guided investors for over forty years. Our staff has access to an extensive database which provides timely information regarding corporate earnings and dividends. We strive to identify companies which will not only maintain but also increase their future dividend payout.
How Will My Dividend Income Portfolio Be Structured?
Borthwick will design a portfolio which consists of approximately fifteen to twenty-five dividend stocks. In order to keep the portfolio diversified we will have representation from several different industry sectors. Your portfolio will be closely monitored and re-balanced as needed. Through active management, our professional staff can quickly respond to changing market dynamics.
Clients can choose to have their portfolio income reinvested in the account or we can set-up a program to have your dividend income paid out to you on an annual, quarterly or monthly basis.
Fidelity Investments is the preferred custodian for our client accounts. Clients will receive monthly statements and transaction confirmations directly from Fidelity. Additionally, you will receive a detailed quarterly performance report from Borthwick Associates.
