Many investors, particularly retirees, look to dividends for <a s often easier to just take the cash from the dividend than it is to sell shares in order to meet your living expenses.
Investors relying on dividends in retirement should look beyond the yield. Dividend reliability and share price stability are just as important, and the potential for price appreciation should also be taken into account. Dan Lefkovitz, strategist at Morningstar Indexes, cautions that the highest yields in the market are potentially deceptive. They are often found in the riskiest sectors, industries, and companies. For investors, this can mean less reliable income and greater share price volatility. Check our list of <a t been true in every market environment. The dividend income can act as a cushion against share price declines, and a focus on established businesses can reduce exposure to the kind of speculative companies that tend to struggle in times of tighter financial conditions.
Companies with pricing power, such as utilities, financials, energy majors, and consumer staples, are typically the ones you’ll find in high dividend portfolios. Their ability to pass on cost increases to customers is a key way of protecting earnings and sustaining returns in an inflationary environment.
