Investing Advice

Income Stock Funds

This is a category that represents companies that pay a high, regular dividend.

Many investors like these companies because of the dependable income, and are not too concerned with the fluctuation of the stock's price.

A mutual fund that is classified as an Income Fund or a Growth and Income Fund, will usually also invest heavily in bonds, not only dividend paying stocks.

Income stocks historically under-perform the average stock fund. What you receive in dividends doesn’t make up for the loss in overall returns.

Growth funds carry more risk in the short-term. But income stocks can hit the skids just as fast and just as hard. Even if you want to generate income from your fund, growth funds have proven to be a better way to go about it.

Here is an illustration from the Investor’s Business Daily:

Invest $100,000 in the American Century Growth Fund on 12-31-71. Take out ½% per month of last years balance, the first year $688 / month. In 1999, would be receiving $9,787 / month and have fund shares worth $2.5 million, after taking out $1.2 million over the 18 years.

Other Stock Market Basics Topics:

  1. Mutual Fund Advantages
  2. History of Mutual Funds
  3. NAV
  4. Dollar Cost Averaging
  5. General advice about choosing a fund
  6. Mutual Fund Ratings
  7. Evaluating Mutual Fund Investment Risk
  8. Mutual Fund Share Classes
  9. Mutual Fund Fees
  10. The Mutual Fund Prospectus
  11. How important is the manager's length of experience?
  12. Why is the prospectus hard to understand?
  13. Mutual Fund Annual Report
  14. Comparing your fund to the competition
  15. Comparing funds on an after-tax basis
  16. Average Return on Investment
  17. How Not to Pick a Mutual Fund
  18. Cashing in Your Fund
  19. When to Sell Your Fund
  20. Mutual Funds and Asset Allocation
  21. When to get started with a mutual fund
  22. Types of Mutual Funds
  23. Value Stock Funds
  24. Growth Stock Funds
  25. Small and Micro-cap Stocks
  26. Mid Cap
  27. Large Cap Companies
  28. Income Stock Funds
  29. Mutual Fund Index
  30. Enhanced Index Funds
  31. Sector Mutual Funds
  32. Stock Market Sectors
  33. Defensive Stocks
  34. International Funds
  35. Real Estate Mutual Funds
  36. Socially Responsible Funds
  37. Balanced Funds
  38. Tax-Efficient Funds
  39. Bond Convertible Funds
  40. Junk Bond Funds
  41. Mixtures of stock types
  42. Closed End Funds
  43. Exchange Traded Funds (ETF’s)
  44. Stock Picking Strategy - Picking your own stocks?
  45. Fund names, and what they really invest in
  46. How to get started
  47. Where can I start investing with no money?

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