Income matters in 2023

“Income matters and always contributes to returns, but capital doesn’t actually contribute every decade. In fact, in the S&P 500, there’s been three — the 1910s, 1930s and more recently, the 2000s — where investors had no return from capital appreciation,” Hugh said.

“The importance of income usually increases after a period where capital gains have been very strong. The most recent period is certainly one of those environments.

“This leads us to believe that the 2020s is very likely to be a decade where capital gains will be a far lower contribution of return, highlighting the importance of income.”