retirement

5 sound investment strategies for retirees

Dividends offer income, growth potential
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PNC Wealth Management's Jennings likes dividend-paying stocks because "cash flow is important to many investors right now." They can provide a steady flow of income with potential for growth as well. You can buy individual stocks that pay dividends or mutual funds, or purchase exchange-traded funds that invest in dividend-paying stocks.

The only potential problem with buying individual stocks that pay dividends is that the company paying the dividend could decide to cut the dividend, as BP recently did. In that case, "you want to be very well diversified," Jennings says, "so if you're unfortunate enough to experience a dividend cut, it won't impact you too significantly." Buying a dividend-oriented mutual fund or exchange-traded fund, instead of individual stocks, helps to diversify a conservative investment portfolio.


 

 

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