Investing purely for dividends is a fool's game. Capital losses in a bear market will vastly outweigh the 5% dividend yield. Long term performance figures keep telling me that the vast majority, if not all, Equity income funds underperform the index. Capital growth prospects should always be the first priority to consider. Dividends are icing on the cake, not the cake itself.

Retirees concentrate on dividend payments for income and those companies with consistently low debt, consistent return on equity and fully franked dividends are favourable. High capital growth is not more important than dividend yield because retirees are forced to drawdown pensions based on a percentage of portfolio market value as determined on 30 June each financial year - the more capital gain the bigger the drawdown and not of much use if dividends are too low.