\n<\/p>\n
With the market currently focused on artificial intelligence stocks, total returns in that space have been markedly higher. A diversified portfolio can capture returns across different sectors, said Mr Cheng.<\/p>\n
\u201cWhile the idea of cashflow from your investment portfolio is enticing, do remember that cash dividends are paid out of the cash from a company\u2019s balance sheet, correspondingly reducing the share price of the company directly,\u201d he said.<\/span><\/p>\n With index funds and zero-fee investment platforms now available, retail investors can more easily convert total returns into cash streams without relying on dividend payments, he added. Income assets such as REITs and bond funds remain sensitive to interest rate fluctuations.<\/span><\/p>\n \u201cInvestors who are looking to build a dividend or income portfolio should be prepared for volatility around the market value of their investments,\u201d he said.<\/span><\/p>\n Still, there are reasons to build a dividend portfolio.<\/span><\/p>\n \u201cIn uncertain market environments, regular income acts as a valuable anchor for a diversified retail portfolio,\u201d said Mr Ritesh Ganeriwal, head of investment and advisory at investment platform Syfe.<\/span><\/p>\n He described it as a steady, tangible source of returns that does not rely on markets continuing to rise.<\/span><\/p>\n Underlying business fundamentals remain strong, though ongoing political tensions have been pressuring financing and energy costs, he said. Singapore banks and REITs are still paying good dividends.<\/span><\/p>\n Geography matters too \u2013 fixed-income assets in the US are generating higher yields than stocks, while in Singapore, stocks “comfortably out-compete” government bonds.<\/p>\n \u201cThese assets effectively allow retail investors to get paid to wait while we navigate near-term macro challenges,\u201d said Mr Ritesh.<\/span><\/p>\n OCBC’s Mr Anbu said regular income can also help investors avoid having to sell assets during a market downturn. He pointed to inflation as the strongest reason to build a dividend portfolio: money left in low-yielding deposits may be safe, but investors need better returns to keep pace with the rising cost of living.<\/span><\/p>\n \u201cThis makes it sensible to put part of one\u2019s savings to work in income-generating assets,\u201d he said.<\/span><\/p>\n Ultimately, investors need to weigh several factors when deciding on a strategy, the analysts said. Young investors may lean towards growth, while those approaching retirement may prioritise predictable income.<\/p>\n\u201cVALUABLE ANCHOR\u201d<\/h2>\n
LIFE STAGE, RISK APPETITE\u00a0<\/h2>\n