Bonds, TINA and Alice

All statements made in this article are opinions of the writer(s) and are not to be constituted as advice. Please refer to our full Risk Warning at the end of the article. Bonds The yield of the UK 10 year gilt has risen from under 1% at the start of the year to nearer 4%

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Love me two times

There are two reasons to love equity Income funds. The first is the power of re-investing the income. Most market indices, such as the FTSE, the Dow-Jones or the Nikkei, are capital only, so ignore the income investors would receive from owning those equity markets. Ignoring the income is to ignore a major plank of

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Mr Cover Lover

Dividend cover is a simple calculation to provide investors with an idea of whether companies are paying dividends that they can afford. The calculation looks at the ratio of a company’s net income to the total dividend paid to shareholders. Put simply, if a company has a net income of £10m and they pay out

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What would you rather….? Part II

Last time DividendWatch discussed how investors might weigh up the competing claims of immediate yield versus future growth in dividends. We asked, what would you rather…   Company A: yielding 6%, growing its dividend at 2%   or Company B: yielding 2% but growing its dividend at 6%?   We demonstrated that it would take 30

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What would you rather….?

“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in”. Most modern income fund managers, whilst quietly agreeing with these words attributed to John D Rockefeller, would perhaps add that a growing dividend is especially pleasurable. To that end, most income investors seek out companies that provide a

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Do UK income investors have anything to fear from rising rates?

Baby steps The Bank of England has now increased interest rates in both of its last two meetings, taking base rates to 0.5%. The 10 year gilt yield has also moved up and is now over 1.0%. These are still vanishingly thin levels of interest by any standard. The UK equity market yields much more

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