Having just written a series of blogs on income investing, I feel like I'm part of a movement. A growing band of investors, fund managers and journalists touting income as a safe and profitable way to invest in the current market. But there's something about this story that makes my contrarian flesh creep. It's not just a band its a bandwagon.
Here's a chart that ought to get your attention. It shows the performance of SG's new Quality Income index backtested to December 1989. The index of quality income stocks is in blue, and a world index of stocks is in red. The quality index produced annualised net total returns of 11.6% compared to 5.6% for shares and 8.7% for government bonds.