10

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 O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.