Why yield is stillimportant

Corporate profitability should be returning to the market as more companies are reporting figures ahead of market expectations but economic shocks mean a holding in higher-yielding stocks remains key

Theory suggests that a rational investor should not care about income. Instead, he should be concentrating on the total return he generates from his investments. Assuming that he buys his securities and holds them for a substantial period of time, he should not be too concerned about the gyrations of the market towards either high-yielding or low-yielding securities. However, fewer and fewer people make active investment decisions over such a long timescale which means that we do have to be concerned about the market's phases and which types of stocks are in favour, and why. As the te...