Lux Investing

Is it best to invest for income or growth ?

Given a imaginary lump sum - say £200k - if you choose to invest in unit trusts over the long term and want to live off what it could produce. Would you be better investing in income trusts and taking the income or investing all in growth and selling lumps as its needed (and maybe when the market is high).

Public Comments

1. In the long term, value stocks out-perform growth stocks. But if you do some research on growth stocks, I believe you can weed out the losers and pick the winners. Also, it is better to buy growth stocks when you are young but go with value stocks when you get old.
2. Your best option is to invest in some of each. There is great uncertainty in investments and no one knows what the future holds. Consequently, to give yourself the very best opportunity of meeting your goals, you need to have a diversified porfolio of investments. Some growth and some income. Some domestic and some foreign. Some large cap and some small cap. Some short term and some long term. Most importantly, you do not want inflation to get the best of you and growth is the best option to guard against that happening.
3. I think to the income. Because from income you can take more money. $_$ ^_^
4. It would depend on the funds you choose (and the markets they follow) Income funds are designed to pay regular amounts and would automatically pay you the cash each period. If you invested in a growth fund you would have to manage the repurchases yourself which may suit you better, for example if you need different amounts at different times. I would suggest you sit down and work out what you need or go and see an adviser to work through your finances. You can locate an adviser here http://www.unbiased.co.uk/landg/index.asp or pop into your bank and ask there. hope this helps
5. It depends on the individual. If you are retired, then income is important. If you are young and investing for the future, then growth is often better.
6. Both just be careful of capital gains
7. If you are working and had that kind of money I'd invest for growth and take a partial withdrawal as and when needed. You can withdraw 5% or !0% per annum, depending on the kind of investment and funds chosen, without penalty. Your money would still grow, and you could add additional investment sums if you wished whilst still working. Could name a good company but obviously can't. You could also change to a regular income withdrawal at a later date upon retirement. xx