RetireeRobert
Thinks s/he gets paid by the post
But using the s&p 500, it currently yields 1.3% right now (ouch). On a 100k invested, that’s 1.3k. If s&p 500 drops 50%, then the yield doubles to 2.6% and you still get 1.3k. Not a problem.
I had the same thoughts and confusion as you. Steady dividend income from a portfolio is what I would count on to help me hold a steady portfolio course and weather the storms of market downturns. Sort of an attitude of "Who really cares. My stream of bucks are still flowing in. So just hold the portfolio--and get paid to do it--and in a year or two the principal value of the portfolio is restored anyway. In the meantime I get paid to wait."