Our Approach

Investing for Income

"Income seekers in recent years have experienced frozen interest rates at historic lows which have resulted in real losses for many savers in bank and building society deposits which have failed to match inflation."

Fixed interest

The most popular forms of income investment are bonds (which are also known as 'fixed interest' investments) and cash, both of which pay a regular, consistent rate of interest either annually, twice a year or four times a year. You can also obtain an income from shares in the form of dividends, and many equity funds are set up solely with the aim of generating a stable income. Importantly equity income funds often aim to achieve not only stability, but an increasing income in the long term.

Good cash flow

Income stocks are most usually found in solid industries with established companies that generate good cash flow. They have little need to reinvest their profits to help grow the business or fund research and development of new products and are therefore able to pay sizeable dividends back to their investors. Examples of traditional income-generating companies would include utilities such as oil and gas, telephone companies, banks and insurance companies. You should remember that these investments do not include the same security of capital which is afforded with a deposit account.

Income Investing Tips

1. Sustain able long –term dividend growth
Investing in businesses when the growth potential is not reflected in the valuation of their shares not only reduces the risk of losing money, it increases the upside opportunity.

2. Inflation matters
Always bear in mind the detrimental effect of inflation. Corporate and Government bonds offer higher yields than cash but returns can be eroded by inflation. Investment in property or equities provides a vehicle to help achieve an income that rises to keep pace with inflation.

Contact Us: Generating an income from your investments will be an important requirement especially if you've retired or are approaching retirement, or if you need to supplement your salary, or have a relatively short investment timeframe. To discuss how we could help you, please contact us for further information.

The value of investments and income from them may go down. You may not get back the original amount invested.

Investment Planning

"Balancing the risks you are
comfortable with alongside
the potential rewards."

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ISAs

"One of the most tax-efficient
savings vehicles available."

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Get in touch

CFS Independent Financial Advisers
Lower Blyth Suite, Kirkley Hall,
Ponteland, Newcastle upon Tyne NE20 0AQ

Telephone: 01661 821110
Fax: 01661 824296
Email: enquiries@cfs-ifa.co.uk

 

 

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