dealtn wrote:
If the aim is wealth creation (at least in an "accumulation phase"), and if, as you say, a positive feature is to have "an easy way to do what ... delivers..." why have a strategy that involves recycling of (high dividend) income back into investments, when an easier way might be to invest in shares that possess other qualities such that income may be lower, but capital growth more easily delivered?
Surely it is easier to "wealth accumulate" when you have less of the work to do yourself, with more of the work being internalised within the underlying companies invested in?
Because doing so with a single, long-term income-strategy during both phases gives good visibility of the income-stream over a much longer, confidence-building period for some investors.
That confidence can be gained by looking at the size of the long-term income stream, as well as it's long-term growth and growth-trends, and also it's reliability over the long-term, often passing through a number of market drops.
That confidence might be difficult to achieve if using a separate growth strategy initially, and then changing tack later on when wanting to move into an income-strategy phase, and that confidence might be a highly important aspect of this type of investment for some people...
I accept that there's lots of investors who might be quite happy to just 'be' confident that such income-reliability and visibility might just 'occur' once such a second 'income-strategy' phase might be started, but I think it would also be very useful for people to also understand that there's
some investors who would be quite happy and willing to
accept *some* level of lower overall 'round trip performance' if they were able to stick with the
single 'income-strategy', re-investing during what would be your 'growth phase', and then simply flicking the dividend-delivery 'switch' from re-investment to 'income-delivery' at some point where required.
It's a simple, single-strategy approach that delivers benefits that some people might be happy to accept, even in the face of lower overall 'total returns'....
The question you're asking is a valid one dealtn.
The issues generally arise when the same people keep asking the same questions, and pretending that they've not been answered in the past, and at that point I'm sorry to say that they simply look like trouble-makers persistently barging into that joggers room, and demanding to know why they don't just do marathons...
Cheers,
Itsallaguess