Dorothy ….. realised early on into her retirement that she and her husband, Alan, did not have enough income to live the sort of life they had anticipated. Despite having a workplace pension and the state pension, the 75-year-old was concerned that the standard of life they were used to would not be achievable with the amount coming in. She said: “In my fifties, I was the sole income earner for our family of four, with a mortgage and two teenagers to put through university. I’d had a chequered work history and thought my tiny pension pots might add up to a pension large enough to enable me to retire. I’d set up an appointment with a pension adviser and after he reviewed the information, he shook his head and informed me that they didn’t add up to much. Definitely not what we wanted. He said that I needed to keep working and I’d be able to retire at 85.”

Dividends can be more reliable than share prices as they’re driven by the companies performance itself and not by the whim of investors.

As part of a total return / reinvestment strategy, this income could be reinvested into income assets or back into the equity market depending on the relative valuations.

The emotional benefits of dividend re-investment.
In fact, with this investment strategy you can actually welcome falling share prices.