Individual Bonds or Bond Funds or Dividends?

dividendsMost people think income can come only from income sources like dividends or bonds.

For a discussion about dividends:  The Dividend Income Illusion and Should You Just Focus on Dividends?

This blog briefly summarizes considerations between individual bonds and bond funds, should provide a brief summary of how each compares to the other, when combined with the below comparison of bonds with a Total Return perspective, .

I believe in a total return strategy, looking to accumulate gains from all pieces of the portfolio, not just the bond assets. At the end of the day a dollar is a dollar, whether it came from capital gains on stocks or coupons from bonds, or dividends paid on behalf of stock ownership.

When you focus on just one source of investment income, your portfolio allocation is not as diversified as it should be – thus you inadvertently take on more risk than you bargained for.

 

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

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2 Responses to Individual Bonds or Bond Funds or Dividends?

  1. Larry Frank, Sr. December 5, 2014 at 2:13 pm #

    Why the Risk-Reduction Benefits of Bond Ladders Have Been Overstated, November 18, 2014 by Joe Tomlinson:
    http://www.advisorperspectives.com/newsletters14/Why_the_Risk-Reduction_Benefits_of_Bond_Ladders_Have_Been_Overstated.php

  2. Larry Frank, Sr. February 8, 2017 at 8:51 am #

    Research in 1961 has suggested long ago that dividends are part of the total story and total return should be the focus to have proper diversification

    https://advisorinsightsblog.com/2017/02/07/the-folly-of-chasing-dividend-yield/

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