I think in Singapore, one of the most popular investing styles is income investing, mostly through dividend paying stocks and REITs, supplemented with retail bonds.

To be honest, it is a strategy that I myself is quite fond of.

Kyith wrote an excellent piece about HY dividend stocks and some ways to think about them. I think it’s a great read, especially for people whose analysis consists of only looking at the headline dividend yield number.

Business profits could drop.
Dividend payouts could drop.
Demand for higher yield could increase, price would drop.

Some people might think that fixed income investments might be better, since the payouts can’t drop. That is true – to an extent. Payouts could just be cancelled and stopped altogether, ala Hyflux style. Worst still, the principal could just be defaulted on. So are bonds are safe? It really depends which one. This is an example …