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Strategies & Market Trends : Young and Older Folk Portfolio

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To: Rarebird who wrote (999)	6/22/2022 3:39:38 AM
From: chowder	4 Recommendations Read Replies (1) of 21986

The thing to keep in mind is that even when in a secular bear market, the dividend cushion that has been built up will be reinvested selectively. As that cash is reinvested, the yields will be higher, thus making it easier to replace any dividend income caused by cuts or suspensions. Dividends perform the same job that outside cash would provide, they help to keep the portfolio cash flow rising as opposed to falling. The more the margin of income safety, the more cash there is to reinvest. If any dividend cuts do come down the line, they are not all going to hit all at once, they will be spread out over a certain time frame and this too allows time to adjust and reinvest the dividends where it's easier to replace any lost income. It's simply a matter of portfolio management.

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