Tracker fund yield - is higher better?

Audaxer

Linton wrote: »

1) I dont drawdown anything other than dividends from the income portfolio, I drawdown some capital from the Growth portfolio.

Sorry, I know you don't drawdown capital from your income portfolio. I just thought you were saying that was an option. I agree it's an option but it is not my intention to do so either, unless it was a substantial capital gain.

bostonerimus

Linton wrote: »

1) I dont drawdown anything other than dividends from the income portfolio, I drawdown some capital from the Growth portfolio.

2) One year nearer death so a slightly smaller chance of a crashes in the meantime so you need less contingency money

Such a "bucket" approach can be a useful tool. Sometimes it's done chronologically too. But I like to be more holistic and take dividends, capital gains and rebalance across my entire portfolio and with just 3 funds that's very easy.

Eco_Miser

Thrugelmir wrote: »

The long term average (of equities) is inclusive of the reinvestment of dividend income.

Not if the dividend is being taken, not invested. I wasn't talking about a published figure.

Thrugelmir wrote: »

Not a question of income or growth. The cake cannot be eaten twice.

Obviously. But my portfolio provides both income (the declared dividends/interest) and growth (any retained profits and other changes in valuation).

pip895

Very crudely High Yield = High Risk.

The link in bonds is obvious but in equities, it flows in part from yield hungry bond investors piling into high yielding equities.

Linton

pip895 wrote: »

Very crudely High Yield = High Risk.

The link in bonds is obvious but in equities, it flows in part from yield hungry bond investors piling into high yielding equities.

Very high yield (eg >8%) does generally mean high risk. But yields of say 5%-6% generally dont. Look at boring, solid, highly cash generative companies with limited opportunities for growth such as the utilities and insurance companies which often have yields in this area. Private investors are a relatively small part of the market and so their actions wont normally have a major impact. Large institutional investors would generally have less freedom to switch between bonds and equity, even if they were more interested in dividend income more than capital value which I doubt most are.