Boomers should bulk up on dividends and value stocks, Jon Chevreau writes on his blog, The Wealthy Boomer. According to a report by Catherine Avery Investment Management, a value-oriented portfolio is cheaper and safer than a growth portfolio, Chevreau writes, adding, "Boomers have run out of time waiting for non-dividend paying growth stocks to give them capital gains."
According to the report, boomers need dividends to stay on top of inflation. Chevreau cites a mock portfolio in the CAIM report where a $1,000 stock investment with a 3 percent annual dividend yield growing at 5 percent per year, and with a 5 percent annual appreciation in the stock price, grew 342 percent over 20 years. "That compares to 191 percent for the S&P 500 index and just over 200 percent for Treasuries."