bonds operate on a similar principle but, being in theory less
secure than government bonds, the return on them tends to be
higher. Needless to say some issuing companies will be more
dependable than others and so they are each rated by specialist
ratings agencies. When investing for income it is of crucial
importance that some note is taken of how a particular corporation
is rated. Those with poor ratings should possibly be avoided,
regardless of their promise.
way of avoiding too much uncertainty when investing for income
is to spread one’s risk by holding a basket of equities
or assets. As the standing of some companies declines so others
will grow, and by holding a wide portfolio of stocks any losses
sustained due to bad investments are likely to be negated or
at least offset by those that have demonstrated more success.
The other essential
factor involved when seriously investing for income is the necessity
to reinvest. According to the Barclays Equity Gilt Study £100
invested in the UK Stock Market in 1945 would have returned
£227 by the end of 2011 without dividends having been
reinvested, or £4,027 with – a quite dramatic difference.
it is always good to be cautious, a little research into the
various methods and means available to those considering investing
for income will show that making a reasonable return on one’s
starting capital is not tremendously difficult, and usually
If you are
considering investing for income, check out the offers from
companies such as those above to see what investment for income
opportunities are available to you. Also seek financial advice
prior to investing to fully understand the risks involved.