RCS - Strategies For Growing Income In 2025: Part 1

2025-01-29 12:59:11 ET

Summary

• Growing income is key for successful income investing, but many common strategies are unsustainable and can lead to underperformance and disappointment.
• Unsustainable strategies include buying the highest NAV yields, highest leveraged funds, riskier assets, and ignoring the differential between yield and total return.
• These strategies often result in lower long-term income, forced deleveraging, larger drawdowns with the associated behavioral biases and unrealistic expectations of wealth growth.
• In Part 2, we discuss more sustainable strategies for achieving income goals.

Growing income remains one of the hallmarks of successful income investing. There are any number of obvious ways investors can increase the income level of their portfolios. However, it's important to highlight that many of these strategies are not sustainable and can actually lead to a drop in income as well as underperformance and disappointment....

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