Trustnet Magazine 95 May 2023 | Page 8


Yield of dreams

Most experienced private investors fortunately take heed of advice about committing money for the long term . However , one area in which their outlook becomes comparatively myopic is income , where they tend to show a preference for the sectors and markets paying the highest yields . On one hand this makes perfect sense : income investors , such as those in retirement , need their dividends today , so why wouldn ’ t they hold the companies that are paying them the most ? On the other hand , it could be argued that this is just storing up trouble – with the average adult in the UK expected to live beyond the age of 80 , and those that take care of themselves likely to live for even
longer , they will need their income to keep pace with inflation for at least a decade , and most probably longer . So what exactly will the dividend market look like in 10 or 20 years from now ?
Back to the future For clues as to what the income market will look like 10 or 20 years into the future , it is worth casting an eye back to how it looked 10 and 20 years in the past . Neil Denman , manager of the Sarasin Global Dividend fund , says it is easy to forget how much the world has changed over this time . “ In 2003 , the Human Genome Project was completed , Myspace had just launched and Greta Thunberg was born ,” he notes . “ Ten years ago , scientists had started using 3D printers to create lab-grown ears from collagen .” In terms of measurable progress , he says that in 2003 , BT announced a 1 megabyte per second broadband service ; by 2013 , it had jumped to 16 megabytes ; and today we are in a “ gigabyte-capable economy ”. So what impact have advances such as these had on the income market ? The answer is none whatsoever .
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