If you are wondering what the S&P 500 dividend yield is? It is 1.83 %. I think it takes care of the inflation on a long term. One needs to compare this yield to the bond yield to find which one is beneficial and to distribute the portfolio.
http://www.indexarb.com/dividendYieldSortedsp.html
I found some very high dividend giving shares at this site. For example FTR right now gives 12.5 % and it is listed in the S&P. Verizon is at 6.8%. Of course one also has to look at the stock price before one invests. FTR also has a low stock price now and it has been stable all along the last year.
These utility companies have a lot of cash in hand and distribute as dividends. They are natural monopolies. These are the companies to invest at the low stock price and high dividend rates. They are stable companies too.
It is a good idea to have some of them in the portfolio for a long term investment. Certainly, 12.5 % interest for doing nothing is great.
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