How to Invest for Income

“Sell in May” would have been terrible advice for stock investors in 2013. The S&P 500 tacked on about 4% in the month, even if the last week and a half was a little rough. Utilities, telecoms and other “widows-and-orphans-appropriate” stocks have also taken heavy losses. For stocks that were purchased precisely for their low-volatility and high-income properties, it’s frustrating to see that much value evaporate overnight, particularly when the broader market is holding up well. But as investors, it doesn’t do us a lot of good to dwell on our frustrations. We have to look forward and allocate our capital based on the options in front of us.

So, what are our options? For the remainder of 2013, I see these stocks being in a sweet spot for income investors: Daimler (DDAIF) and Cummins (CMI), two industrial stocks held in some of my more aggressive portfolios, have been performing well, as have my Big Tech dividend payers Intel (INTC), Microsoft (MSFT) and Cisco Systems (CSCO). All pay respectable dividends, yet all should also benefit from a rotation from defensive sectors to growth sectors.

Source: Guru Focus

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