Skip to Content
Investing Specialists

Income Investing With a Dash of Total Return

Even dedicated income investors can employ best practices from the total-return world.

During the past few years, we've spent a lot of time discussing the income versus total-return approaches to managing assets during retirement. We've had healthy debates in Morningstar's Discuss forum, and several of you have emailed me to share your points of view.

But the more I hear from you and think about this topic, the more I've realized that the two camps are not that far apart. Total-return investors should absolutely incorporate income-producing securities into their portfolios, as bonds and dividend-paying stocks can confer an invaluable level of stability. Furthermore, income-focused investors, just like the totalniks, wouldn't mind increasing their principal even as they hope to live off their portfolios' current income.