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Onion unless you are a old fart like myself you should consider some long term growth in your portfolio. How about 15-20 percent into ETF of Dow Jones and S&P500?
I plan on retiring in 2 yrs. So no long term growth plays for me.
My philosophy has been if I am getting enough in divis and interest on a monthly basis to live on, should I really care what the market value is?
I looking for monthly income. So I try not to let the market value swings to bother me but like I said I am very giddy about 2012. Id love to see more of that + a rise in rates over the next 2 yrs.
That would allow me to swap out of riskier divi stocks and back into less risky preffy's and bonds.
"if I am getting enough in divis and interest on a monthly basis to live on, should I really care what the market value is?"
Yes, you should care IF your dividend/interest income is barely enough to live on. Reason: when markets tank for an extended period (say, 12-18 months --- the typical bear market period), it hurts earnings. When earnings are hurt for 2 or more quarters, dividend cuts usually follow. If that happens, your income will drop below your comfort/living zone and you may need to sell some of your investments at distressed prices o augment your income for living expenses.
If possible, avoid that scenario by aiming for initial dividend/interest income in retirement that is 25%-50% above your living expense level. Then, if dividend cuts do happen, you stand a good chance to weather that storm without having to sell your investments to augment reduced income. To do that, you may need to delay retirement a couple years to grow your bank account more for greater initial dividend/interest income.
Don'tcha jus love it when a plan comes together?
Onion !! low risk appeals to me. I stay 50%-65% Preferred, 15% bonds high yield and emerging markets, 20%-25% ETF Dow Dividend and S&P 500 and the rest trading cash for opportunities. Quality Dividend stock like J&J,PG,K,KO is not risky it will go up and down but not out. Always stay in your comfort zone so you can sleep well.
To me AGNC is risky the hint by the FED of a Interest rate increase will tank MREIT's and also hurt Bonds and Preferred share price.
Onion, you're an income guy! Not a gains guy. You make your real gains with job income and commish, and then bank it vs gamble it. Probably live like a buddhist monk.
You want names? Nah, you should probably go toward ETFS and play the macro trends. Names have extra risk.
You could just keep doing what you are doing, and just watch the market and pull out when the Fed starts raising rates, wait for the resulting correction/crash, and then buy everything back, maybe with an emphsis on ETFs at a 20-50 % discount at the trough..
Its all about the Fed, and the Fed will need to start removing accomodation this year, is my guess
The market is like an apparently insane driver, if he sees danger ahead in the road, he laughs and accelerates into it to enjoy the resulting thrill of the obviously coming horrific crash. To you and I the driver appears insane! but he knows he is immortal and will rise out of the ashes of the crash to live and race again.
You learn to ride with the driver and jump out right before impact.
That is my point.
I AM an income guy, but now I am like a school girl looking at 12.50% on the CY 2012.
I think you gave the best answer, based on my portfolio structure now
As soon as I get evidence that rates are going up I will bail on all my REITS
I think MLPs have got some room to go. Right? Pipelines?
Better economies = more energy consumption + higher energy costs= more MLP earnings?
Onion do you read Barrons? Every week there are articles with Bulls and Bears,predicting ups and downs. No one knows what the future holds. You must put yourself in a position that you are comfortable with and then change and modify as it pans out. The guys that think they have the sure fire thing put their eggs in and hit it big or end up selling pencils.
I am a bond broker, I read Barrons, WSJ, NYT, I have Bloomberg Professional giving me up to the second news and info. It has all sorts of bond and stock analytics. I am sitting in front of 4 monitors all day long. Plus from my desk I can see 6 plasma TVs playing CNBC, Bloomberg TV, Fox Business Channel all day long.
I am just trying to get some opinions on the markets and why....
You dont have to be right or wrong you just have to have an opinion.