Plummeting share prices cause pain to portfolios. But for investors with long-term horizons, reinvesting the regular income provided by company dividends usually serves as protection against short-term storms while a stock’s value recovers. And even if shareholder returns are cut or rebased, a balanced share portfolio (or dividend-focused investment trusts or tracker funds) should still provide some yield, especially for those in retirement and reliant on dividend income. With yield comes that most precious commodity in today’s financial markets: cash.
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