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12 Oct 2016 (AFR) – Preferred funds in yield search – Why investors seeking asset diversification head for yield stocks

(12 October 2016, AFR, p20, by Chris Wright)

‘Investment – In the first of a series on the different types of asset classes professionals target, Chris Wright takes a look at the equity income category, where shares are picked based on the dividends generated.’

‘It’s a hard time to make a buck. You can’t make a decent return sitting in cash any more; bonds are delivering historically low rewards – with government bonds in much of the world generating a negative yield for the first time in living memory – and the outlook for stocks is uncertain.’

‘But diversifying from the mainstream is challenging, and for most of us requires professional assistance. In this series we will look at four interesting asset classes, and ask financial planners which fund managers they trust with their clients’ money, and why.’

‘We start with equity income, also known as yield stocks: an equity portfolio, but one selected chiefly for the dividend income it generates. “Retired clients like the concept of franking credits and high income-paying stocks,” says Darren Johns, financial planner at Align Financial on Sydney’s Northern Beaches.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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Brainy's Share Market Toolbox. Read the honest truth about the sharemarket. Develop or fine tune your investing/trading strategies using share price charts (technical analysis), or learn about the investment strategies of others. Melbourne (Australia) based - supporting share market investors and traders to build wealth through smarter investing using my Share Market Toolbox arsenal of weapons to tackle the market.

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