Talking Point  

Guide to equity income and dividend investing

  • To be able to describe how the economic outlook could affect equity income
  • To be able to explain how tech stock dividends are changing income investing
  • To be able to explain how to build a diversified income portfolio
CPD
Approx.60min
Guide to equity income and dividend investing
(Reuters/Dado Ruvic/FT Adviser montage)

Introduction

Equity income protected investors during the high inflationary environment following the pandemic and "mini"-Budget fiasco.

The inflation surge from mid-2021 through the whole of 2022 saw interest rates rise substantially from low levels, and global equity markets struggled.

But global equity income funds held up well during 2022, declining far less.

In an inflationary period such as 2022, when market returns were highly concentrated in energy, mining and defence sectors, this turned out to be a successful strategy for many income funds in the short term.

But does the economic outlook leave equity income portfolios facing headwinds?

Also, with a growing number of tech companies paying out dividends, will this change income investing strategies as well as how investors can build a diversified income portfolio?

This guide is worth 60 minutes of CPD.

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Why does Moore say the best environment for UK equity income would be one where we had stable or improving economy?

  2. According to Plant, how can investors bridge the gap between forecast and realised yields, to ensure a more dependable income stream?

  3. True or false. During periods of economic growth or recovery, dividend-paying shares can provide both income and potential capital appreciation, unlike bonds or cash.

  4. According to Uru, how can income investors capitalise on the AI opportunity to drive both income growth and capital appreciation?

  5. Why does Clay say that a global approach to income is a very good way to achieve a diversified equity income portfolio?

  6. According to Chand, how does yield act as a diversifier in an income portfolio?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • To be able to describe how the economic outlook could affect equity income
  • To be able to explain how tech stock dividends are changing income investing
  • To be able to explain how to build a diversified income portfolio

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