Welcome to the new my.morningstar.com! Learn more about the changes and how our new features help your investing success.

3 Ways to Boost Equity Income (Part 2)

In part 1 of this article, we looked at the first way to boost equity income by dividend income. In this part of the article, we will look at the remaining two ways.

Alex Bryan 25.09.2019

Create Your Own Dividend

It isn't necessary to target high-dividend-paying stocks to earn higher income distributions than the market. Sometimes it can be more effective to simply own the market portfolio, with a fund like Vanguard Total Stock Market ETF (VTI, listed in the U.S.), and sell a small percentage of the position each year to generate cash to supplement the market's dividends. Withdrawals of 2% or lower each year should be sustainable, as there's a good chance that earnings per share can grow at that rate (above inflation) over the long term.

This approach yields better diversification than dividend funds, and it avoids the value style risk common to most of those strategies.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Member.

Register For Free

About Author

Alex Bryan

Alex Bryan  Alex Bryan, CFA is the Director of Passive Fund Research with Morningstar.

Audience Confirmation


By clicking "accept" I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See "Cookie Consent" for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All Rights Reserved.      Terms of Useund      Privacy Policy.
© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy        Cookies