Investment selection will always be a critical part of any investor's portfolio plan, but ask our director of fund research Scott Burns which investments you should pick, and he'll inevitably answer with, "Well, what are you trying to accomplish?"
Jason Stipp is director of Morningstar's individual investor products.
His point is, investors must sort out their objectives and clarify their strategy before they start screening for the best fund, stock, ETF, etc. Any number of great investments can be simply the wrong choice for a certain goal--whether it's long-term growth, short-term preservation or, for the coming wave of retirees, income.
We're kicking off our Income & Dividends Week at the portfolio level on purpose. Thoughtful income investing involves more than just purchasing income-producing investments. Especially in today's stubbornly low-yield environment, it's worthwhile for income investors to consider their options outside of strictly income-oriented vehicles.
This is not to say that income producers won't have a key role to play for investors today--which is why we're spending the rest of the week examining the current dynamics, best practices, and top picks in dividends, bonds, and other income payers.
Income investments have been a hot topic for a while now. This week we hope to bring some light to that heat, helping you to craft a durable plan and identify the most promising investments. We'll be adding new articles and video reports each day this week, so be sure to bookmark this page and check back often!
Income & Dividends Week: Editor's Picks
Monday, Dec. 10 | Portfolio Strategies for Income
An income-only or a total return approach to retirement income? The discussion has taken on increasing urgency as more and more investors enter retirement with fewer pensions and more 401(k)s. Turning that portfolio into a livable--and sustainable--income stream requires a thoughtful plan. We'll get you started on Monday by providing a framework for tackling the issues.
Tuesday, Dec. 11 | Dividends
In reviewing Morningstar.com's most popular content over the last year, it seems readers are paying a lot of attention to dividends--maybe too much? We'll take a close look at equity income on Thursday and offer tips on tapping dividends abroad, through mutual funds, and with ETFs.
Wednesday, Dec. 12 | Bonds
With yields on 10-year Treasuries still stuck in the basement but investors still craving fixed income, bonds are like a dilemma wrapped in a paradox. Paltry current income plus the chance of loss should rates or inflation creep up cloud the future for fixed income, yet investors continue to pour money into the asset class. On Wednesday, we'll delve into exactly what role bonds should play, and what strategies investors should consider today.
Thursday, Dec. 13 | Annuities
All annuities are contracts with an insurance company, whereby you pay in with the understanding that the company will send you a stream of income. But that's where the similarities end and an often-bewildering (and costly) parade of features and benefits begins. Despite the perplexity, however, a thoughtfully purchased annuity income stream could play a useful role in investors' portfolios.
Friday Dec. 14 | Other Income Payers
The search for yield has many investors looking further afield. On Friday, learn the basics on REITs, closed-end funds, MLPs, multiasset ETFs, and more--plus, check out some of our analysts' top picks among these other income players.