It's generally accepted that "income (dividends) and growth (capital gains) are perfect substitutes (tax and transaction costs aside)". i.e. "In financial theory, there is no reason for a difference in investor return to exist between dividend paying and non-dividend paying stocks, except for tax consequences."
How well does this hold up in market downturns and/or high volatility? A friend makes the point that you'd rather receive a $100 dividend than sell $100 worth of a security at a potentially low price due to transient market conditions. I can understand this for weakly-traded securities. To what extent does this affect my holdings of index funds tracking well-traded securities (FTSE Global All Cap Index and Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index)? Should I divesify to hold some "high-income" securities such that during downturns I have some income without needing to sell securities at potentially bad prices?