Well, let's talk about it. IGD cut it's dividend by 20% (3.1 cents) to .125 cents per share.
I know this is particularly bad news for my father, retired, for whom a significant percentage of his income is derived from IGD.
And it's certainly unfortunate for me. This makes the fund far less attractive. After paying the full dividend for so long, through the worst of the economy, why cut the dividend now, when the market is recovering?
If you are a high-wealth individual - meaning you have more money than you need to meet your lifestyle expectations - I can understand placing a large portion of your capital in the stock market among other higher-than-average risk investments, i.e. higher risk than fixed income, tips, ETC.
As for me, when I have $2 million in capital and I am 55, I will be placing no more than $250,000 in equities. At some point you have to know when cash it all in and thus never worry about having enough for yourself or having too little left for your heirs.
To each his own.
>>> No where did I say that you should stop investing in stocks altogether. I said that someone close to or in retirement shouldn't have a SIGNFICANT portion of their portfolio in the equities market. It's all about respecting the risk/reward profile. As I am sure many retired folks learned in 2001 and 2008, FIXED INCOME INVESTMENTS EXIST FOR A REASON. <<<
Metro, I respectfully disagree. There are years (like 2009) when even a retiree should have a significant portion of their portfolio in equities. The addage of averting risk and being in bonds because you are old and need to protect yourself is just nonsense. My IRA was up almost 300% in 09 and has afforded me the opportunity to retire at least 5 years earlier than planned. Coming out of the biggest economic crisis of my lifetime also created the biggest opportunity of my lifetime and it would have mostly been missed if I didn't have a "significant" portion of my investments in equities.
Beware of common jargon bandied about by the pundits. You'll miss a lot of opportunities if you follow the herd.
Two words: capital preservation
If you're looking for income and unwilling to accept the stock market risk, there are still some great investments out there. Off the top of my head, try AAA rated muni bonds -- the interest is TAX FREE! A strong portfolio of staggered (staggered=not all mautring at the same date and that pay inetrest at different points in the year) is an excellent way to shield yourself from violent stock market fluctuations.
If the past two years have taught us anything, it is the appreciation for capital preservation and how that appreciation is 100% tied to risk/reward.
*Anyone that thinks you should pick up your marbles and go home because you are close to retirement is either insanely stupid or a very young man with a lot to learn. I'll give you the benefit of the doubt, sonny, and guess it's the latter.*
No where did I say that you should stop investing in stocks altogether. I said that someone close to or in retirement shouldn't have a SIGNFICANT portion of their portfolio in the equities market. It's all about respecting the risk/reward profile. As I am sure many retired folks learned in 2001 and 2008, FIXED INCOME INVESTMENTS EXIST FOR A REASON.
I feel sorry for you for having such a negative attitude and for thinking you know what is appropriate investments for others. We are retired and do have IGD among our holdings. We also have no intent on selling. If you don't invest in the market, what do you invest in? It's the only game in town. If you consider CDs at 1% for 1 year a good return, then, by all means go for it.