I'm sure that many will find fault with my investment "philosophy", but after reading some of the recent threads on bond investing, etc., I want to pitch my "concept" to you. I wouldn't call this an investment strategy, but rather a mind-set that has developed over time. DW and I have been saving and investing for 30 years (married when I was 19.) During the contribution and growing years, we had a variety of mutual funds, common stocks, preferred stocks and a few bonds. The mix changed as my (our) ideas (and understanding of the market) changed, but we always stayed focused and kept saving and watching our investments.
Skip forward to 1999 and early 2000. Our investments were at all-time highs and we were feeling pretty good. Although we had substantial $$ saved, I don't think we truly appreciated the "value" in what we had. The market downturn that followed was pretty painful to us, as it was to many investors, although, thanks to a fairly diversified portfolio, we came through it okay. The extended market downturn and slow recovery had a dramatic effect on how we viewed our savings and investing.
Over the past two years or so, we have finally seen our numbers get back to 2000 levels and beyond. Over that same period, however, we have strategically liquidated mutual funds and various common stocks and reinvested in a variety of income generating investments. Our portfolio now includes a substantial amount of preferred stocks, dividend paying common stocks and a few bond ETF's. We still have a small amount invested in a "balanced" fund and another fund that holds a fair amount of "precious metal" stocks. I do keep some "mad money" that I use for occasional trading, but for the most part, our portfolio is an income generating "machine" that works pretty darn well.
My projected return for the next 12 months is about 7.3%, but could go up a bit depending on the mix. Based on that return, our portfolio cranks out a nice pile of dividends every quarter. We tap into some of it for living, but still manage to reinvest.
We have made a "strategic" decision that our goal going forward is NOT to get as much as we can, but to enjoy what we have. We will allow it to grow through reinvesting some of the earnings and if all goes well, the total portfolio will only grow, even as we take more and more of the earnings for living. We LBYM just as we always have, but now our "means" is bigger than it's ever been and growing.
I am well aware that this is not a popular approach to investing. I also know that I would likely do better in a well chosen set of index funds/ETF's or whatever. The point is that we've got our life pretty well set (financially) and we can accomplish all our future plans with what we have. We can stay conservative, minimize risk and do pretty well.
A couple weeks ago, I had an informal conversation with a financial planner friend of mine. We began talking about investing and the thing went sour when he finally said..."I'd really like to sit down with you and show you how just the right asset allocation can get you......." I basically told him to save the sales pitch. It's just not for me...anymore.
Skip forward to 1999 and early 2000. Our investments were at all-time highs and we were feeling pretty good. Although we had substantial $$ saved, I don't think we truly appreciated the "value" in what we had. The market downturn that followed was pretty painful to us, as it was to many investors, although, thanks to a fairly diversified portfolio, we came through it okay. The extended market downturn and slow recovery had a dramatic effect on how we viewed our savings and investing.
Over the past two years or so, we have finally seen our numbers get back to 2000 levels and beyond. Over that same period, however, we have strategically liquidated mutual funds and various common stocks and reinvested in a variety of income generating investments. Our portfolio now includes a substantial amount of preferred stocks, dividend paying common stocks and a few bond ETF's. We still have a small amount invested in a "balanced" fund and another fund that holds a fair amount of "precious metal" stocks. I do keep some "mad money" that I use for occasional trading, but for the most part, our portfolio is an income generating "machine" that works pretty darn well.
My projected return for the next 12 months is about 7.3%, but could go up a bit depending on the mix. Based on that return, our portfolio cranks out a nice pile of dividends every quarter. We tap into some of it for living, but still manage to reinvest.
We have made a "strategic" decision that our goal going forward is NOT to get as much as we can, but to enjoy what we have. We will allow it to grow through reinvesting some of the earnings and if all goes well, the total portfolio will only grow, even as we take more and more of the earnings for living. We LBYM just as we always have, but now our "means" is bigger than it's ever been and growing.
I am well aware that this is not a popular approach to investing. I also know that I would likely do better in a well chosen set of index funds/ETF's or whatever. The point is that we've got our life pretty well set (financially) and we can accomplish all our future plans with what we have. We can stay conservative, minimize risk and do pretty well.
A couple weeks ago, I had an informal conversation with a financial planner friend of mine. We began talking about investing and the thing went sour when he finally said..."I'd really like to sit down with you and show you how just the right asset allocation can get you......." I basically told him to save the sales pitch. It's just not for me...anymore.
