Other investment considerations

There are a number of other issues that you need to consider in relation to your investment strategy and these include:

  • the impact of dividends on investment returns
  • the impact of regular withdrawals from your portfolio
  • the importance of rebalancing your portfolio
  • the use of debt and investing.

Impact of dividends on overall investment returns

It is regularly stated that reinvested dividends make a big difference to overall equity investment returns over the medium to long term. This is well illustrated by Figure 10.1 that shows the FTSE All-Share Index with and without net dividends reinvested over the past 30 years.

I’ve heard some investment ‘experts’ suggest that high dividend-paying shares are better ...

Get FT Guide to Wealth Management now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.