Keep Your Eye On The Golf Ball, Not The Share Price

Retiree investors don’t stress about money so long as those juicy franked dividends keep filling the jam jar

Did you know that many inves-tors simply don’t care about the share price? Let me say that again: in Australia there is a very large chunk of retiree investors who simply don’t care about the capital value of the shares they hold, because they are entirely focused on living off the income and the franking.

Here are the traits of the income investor that allow them to ignore share prices:

• Income investors are generally not interested in the stock market, beyond milking it for income. It might provide some intellectual stimulation once a weekend when they read the newspaper or chat about it at a dinner party but they do not wish to be watching the stock market, making decisions about the stock market or worrying about the stock market. There is tremendous value in avoiding stress and this pocket of investors has worked that out.

• Income investors are genuine investors, not traders. They are long term, not short term. They genuinely “set and forget” and are disciples of the “it’ll be all right in the end” mantra which, despite relentless criticism for its head-in-the sand approach, can work. There is something to be said for identifying long-term quality stocks and sticking with them through thick and thin. It is a lot less stress. And there are some fantastic examples but only with the benefit of hindsight. Those income stocks that are not all right in the end are conveniently forgotten.