CHOICE Equity Income Portfolio
If you appreciate the value of a growing stream of income over time, you may find the Equity Income Portfolio appealing. Only stocks that pay a dividend exceeding the market rate and that have increased that dividend three consecutive years or six of the last ten are considered candidates for Equity Income. The result is a portfolio that should be more conservative than our Leaders and Special Opportunities portfolios, with a beta that is usually less than 2/3 of the market. Dividends have comprised about 40% of the S&P’s total return over the last 75 years, and recent changes in the tax law have made dividend income even more attractive for recipients.

On occasion, convertible preferreds or bonds may be included for current yield and growth from the underlying common. The convertible asset class over the last 30 years has participated in 70% of the upward equity market movements, but only 52% of the downside movements, yielding annual returns nearly in line with the market with much lower volatility.

Stock selection is equally as important as dividend history in building this portfolio. Turnover typically has been less than 40%, although there can be no assurance that that will remain constant in the future. The portfolio may be less diversified by industry group than others, because the universe of dividend-paying securities tends to be concentrated in certain sectors, but most sectors usually are represented.

 CHOICE Asset Management View of the Current Market

Past performance is no guarantee of future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. Diversifying investments does not ensure against market loss. Yields will vary. The actual characteristics with respect to any individual client account portfolio may vary, but the information shown is generally representative of a typical account portfolio. Information herein may be from outside sources that are believed to be reliable and accurate, but no verification of the information has been performed.

Individual investors cannot directly purchase an index. The S&P 500 is an unmanaged, weighted index of 500 stocks providing a broad indicator of price movements. Scott & Stringfellow and its representatives do not provide tax advice. You should consult your professional tax advisor before taking any action that may have tax consequences.