Are my dividends likely to sustain? Part I

Recently, there were some interesting discussion on dividend in InvestingNote. ThumbTackInvestor nailed it with the following phrase “buying future cashflow”.

While he was referring to REITs (which he does not invest in as he is in another investing realm), the same can be applied to income investing. When we invest for income, we are buying future cashflow to fund our expenses. So long as the REITs or companies can sustain the payout, then the share price which is a function of a lot more variables, does not really matter.

Over the past few weeks, I have shared two posts/videos on my thinking about the above, “Invest for Capital Gain or Dividend? and “Why Invest? Do you know your destination?”. It is important to answer these questions so that we can deploy the right strategies and measures.

What is as important is the execution. So for this post and next, I decided to review the likelihood the my dividends will sustain in the foreseeable future. For Part I, I reviewed the seven REITs in my portfolio. I will review the non-REIT income counters in Part II.

In short, I am confident that the dividends from the REITs in my portfolio is likely to sustain for the next few years. While it never feels good to have capital loss (even for unrealised), it really does not matter if the intent of this investment is for future income.

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