Why Income Matters in Your Investment Strategy

Jun 3, 2024 | Investment Management

Investors often get caught up in the thrill of watching their investments grow in value. It’s like riding a wave during a booming market—it feels fantastic.

But while we’re fixated on growth, we might overlook something equally important: income. Let’s take a closer look at why income should be a crucial part of your investment plan.

1. Financial Strength

Imagine investing in companies that consistently rake in revenue and profits. These are the ones that often reward investors with regular dividends. Essentially, they’re the rock-stars of financial stability. By putting your money into these steady performers, you’re aligning yourself with businesses that know how to weather storms and keep growing.

2. Protection Against Inflation

Keeping up with rising prices can be tough, especially when you’re relying solely on investments. But here’s where income comes to the rescue. When you invest in companies that regularly increase their dividends, you’re essentially building a shield against inflation. As those dividends grow over time, they help you maintain your purchasing power, even as prices rise.

3. Tax Benefits

Even if you’re all about growth, you can still reap the rewards of dividend income. Just reinvest those dividend payments, and you’ll see your investment snowballing. Plus, there’s a sweet tax advantage to be had with qualified dividends—they’re taxed at a lower rate than other types of income. It’s like getting a bonus for being a savvy investor.

4. Peace of Mind

Ever heard of “dividend aristocrats”? These are top-tier companies that have increased their dividends for at least 25 years straight. They’re like the wise elders of the investment world, weathering every financial storm imaginable. Investing in these stalwarts isn’t just about making money; it’s also about sleeping soundly knowing your investments are in safe hands.

5. Stability in Stormy Seas

Picture your investment portfolio as a ship sailing through choppy waters. Market downturns can feel like giant waves crashing against you. But if you’ve got a steady stream of dividend income, it’s like having a sturdy lifeboat. It cushions the impact of market turbulence, keeping your portfolio afloat even when others are sinking.

Investing for income might not have the same thrill as chasing explosive growth, but it’s a tried-and-tested strategy.

Over time, the combination of stock price appreciation and growing dividends has consistently outperformed other assets like bonds and savings accounts. And let’s not forget, quality dividend-paying stocks have a knack for beating inflation in the long run. So, if you want a well-rounded investment portfolio, make sure to consider income as part of the picture.

Learn how our unique approach and personalized advice can help you grow the value of your financial portfolio.

DISCLOSURES: Pring Turner Capital Group (“Advisor”) is an investment adviser registered with the U.S. Securities and Exchange Commission. The views expressed herein represent the opinions of Advisor, are provided for informational purposes only and are not intended as investment advice or to predict or depict the performance of any investment. These views are presented as of the date hereof and are subject to change based on subsequent developments. In addition, this document contains certain forward-looking statements which involve risks and uncertainties. Actual results and conditions may differ from the opinions expressed herein. Statements regarding portfolio positioning are intended to reflect our general investment philosophy and not the performance or composition of any individual client account. Individual client performance will vary based on their own risk objectives; please see your individual statement for your specific return calculations and performance. Forward-looking commentary, including references to the economy, interest rates, or portfolio outcomes, is based on information believed to be reliable at the time of writing but cannot be guaranteed. All external data, including the information used to develop the opinions herein, was gathered from sources we consider reliable and believe to be accurate; however, no independent verification has been made and accuracy is not guaranteed. Neither Advisor, nor any person connected with it, accepts any liability arising from the use of this information. Recipients of the information contained herein should exercise due care and caution prior to making any decision or acting or omitting to act on the basis of the information contained herein. Past Performance is no guarantee of future results. ©2026 Pring Turner Capital Group. All rights reserved.