The dirt-cheap stocks from around the world hand-picked by experts and tipped to

Diversification is key to successful long-term investing. In other words, don’t put all your eggs in one basket, be it equities, bonds, precious metals, specific markets or, for that matter, individual shares or funds. Spread your money around.

The same applies to investment income. Get it from several sources – bonds and equities in particular – and in the case of dividend income, from numerous companies and stock markets.

The UK equity market, currently enjoying new highs, remains a super source of dividends for income-hungry investors – and there is no reason to suggest this will change any time soon.

Equity analysts say dividends from the 100 largest listed companies in the UK will total £86 billion this year – a 6.5 per cent increase on last year’s sum.

Next year they forecast that payouts should rise again to £92.6 billion.

With inflation (at 3.2 per cent) and interest rates (3.75 per cent) edging down, the opportunity to enjoy growing dividend payments from the UK stock market remains compelling.

Yet, while UK income stocks (even better, funds) should form the foundation stone of any long-term investment portfolio (you can reinvest any dividends you don’t need to draw on), don’t forget diversification.

There are plenty of stock markets around the world made up of companies that also deliver an attractive stream of income, year in, year out. They deserve your attention, whether they are listed in the US (yes, there are plenty of American companies that have been growing their dividends for donkey’s years), Europe, or out east in increasingly income-friendly markets such as Japan and South Korea.

Recently, investment manager Capital Group published its latest data on global dividends, growth in which it reported, is running in excess of 6 per cent a year, with the US, Asia and Europe leading the way.

David Coombs, head of muti-asset investments at Rathbones Asset Management, is a big fan of Coca-Cola (3 per cent dividend yield) which is approaching its 64th consecutive year of dividend increases

HOW TO GET A SLICE OF GLOBAL INCOME

The best route for most investors to access this goldmine of global equity income is via an investment fund or investment trust. There are funds in abundance that go trawling for this income, whether globally or in regions such as the US, Europe and Asia.

Last week, I mentioned ten income-seeking investment trusts that provide investors with a winning mix of growing income, low annual charges and value for money. Half of these reap most of their income from overseas: Aberdeen Asian Income, Brunner, Fidelity China Special Situations, Scottish Mortgage and The Global Smaller Companies Trust.

Other well regarded income-orientated trusts that invest overseas can be found in the list of ‘dividend heroes’ published by the Association of Investment Companies. These are funds that have grown their annual income for at least ten years – you can see the list at: theaic.co.uk/income-finder/dividend-heroes.

Investing platforms such as AJ Bell, Hargreaves Lansdown and Interactive Investor also provide top fund lists that include equity income funds. In addition, scrutineer Fund Calibre includes many equity income funds among its ‘elite’ rated choices. See fundcalibre.com/elite-funds.

An alternative or complementary approach for the daring is to buy shares in overseas companies that are focused on paying dividends to shareholders.

FOR THE DARING INCOME INVESTOR

All the big platforms now allow investors to buy international shares and hold them in a self-invested personal pension (SIPP), an Isa or investment account.

For example, AJ Bell provides access to 23 stock markets beyond the UK, including the US, Germany and Switzerland while Interactive Investor offers 17.

Hargreaves Lansdown allows investors to invest in more than 6,000 overseas shares.

‘Shares in US companies are the most popular overseas ones with our do-it-yourself investors,’ says Dan Coatsworth, head of markets at AJ Bell.

Interactive says that in recent months US tech stocks such as Meta, Nvidia and Tesla have featured among the most bought equities (including UK shares) on its platform.

Although Meta and Nvidia pay dividends, they are minuscule and are not the reason why investors are buying shares in these artificial intelligence-focused businesses. They are primarily looking for strong share price gains.

While income opportunities from buying selected overseas shares abound, investors need to be aware that they come with extra costs and complications.

Coatsworth explains: ‘Completing a W-8BEN form allows you to deal in US shares and pay a 15 per cent withholding tax – it is 30 per cent without the form – on any divi income before it is paid to you. So, you need to factor that charge into the income equation when looking at…