Income vs. Total Return Strategies: Why Take Sides?

Income producers are an important component of every investor's toolkit but ignore capital growth at your peril, particularly in a low-yield environment

Christine Benz 9 September, 2013 | 7:00AM

Just as partisan bickering can stall legislators' effectiveness, so do investment absolutists have the potential to derail productive investment debate.

Morningstar's president of fund research, Don Phillips, has discussed this phenomenon in the realm of indexing versus active fund management, writing that extremists on either side of the debate routinely ignore legitimate data simply because it doesn't support their views.

Income and Total Return: Not as Different as You Think

Lately, I've seen signs of the same absolutism in the realm of another great investing debate: whether to manage a portfolio for income or total return. Even a hint of an endorsement for the total-return approach, as in this article, seems to set off the income absolutists.

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About Author

Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.

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