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'Income Growth' Vs. 'Dividend Growth' - The Re-Match

Recently I wrote an article comparing and contrasting my investment style, which I call "Income Growth," to the traditional "Dividend Growth" investment strategy. Both strategies assume that you need a long-term "equity return" of 10% or so if you want to be able to extract (either currently or in the future) a reasonable income stream (say 4% or 5%) and continue to have your income stream grow over time (by another 4% or 5%) in order to match or exceed future inflation.

The difference is in how you go about trying to achieve this. Traditional dividend growth ("DG") portfolios seek out stocks that will both pay a generous dividend (4%-5%) and also have the prospect of growing that dividend by another 4%-5% (or more) into the future. So with a DG portfolio, a retiree, for example, could spend the 4%-5% dividend income and know (or at least feel confident, if… Read More …