Hopefully approaching retirement...

[24601NoMore]

OP - I understand your strategy, but as someone who at one point in time made a lot of my decisions based on projected yield to cost would suggest some caution also..there have been plenty of examples (GE, CTL, Enron, KMI, the list goes on) of companies that paid high dividends for a very long time - and then either went splat (eg: Chp 11) completely or significantly cut their divvy (CTL).

CTL was the one that really hit me hard and cost me over $7K a year in expected RE income. And that's after management swore up one side and down the other that they were "comfortable with the dividend" going forward. Less than 60 days later, they cut from ~$2.16 a share divvy to $1 / share. Learned a hard lesson there, as it appeared based on past payment history for a very long time (decades) that the divvy was at no risk. Wrong!

Capping each investment at no more than 2% certainly reduces your risk, but I can't imagine what it must take to track and administrate a portfolio with that many moving pieces. I have < a dozen CDs and similar number of funds, and even that is one heck of a bear to manage, especially at tax time..

Good luck with the approach.

 

[WyomingLife]

I'm not sure how much I can share on these forums, but will share some thoughts around my strategy which has been a combination of timing, luck and research.

In the recent past, Altria was a stock that people absolutely hated because of the vaping scare and the fact that it's a "sin" stock. I was thinking here is a stock that paid +50 yrs of consistent dividends and I could just hold forever and get close to a 7.5% yield at the time of purchase. Even if people gave up vaping, they are probably going to go back to cigarettes and this company is probably one of the better run smoke shops in the US.

Same thing on mall REIT's. Lots of people think that they only own those old enclosed multi story buildings that are anchored by failing retail chains (Sears, Macy's, JCP). Every time one of these big retail chains announce store closings, people dump these funds. They don't realize that a lot of mall REIT's now own open retail space now and are growing. If you go out and look at mall REIT's you can find bargains with good yields in Macerich, Tanger Outlets and Simon Property.

Energy stocks and related funds have been hit by the recent Coronavirus scare. Some of the stocks in this sector have double digit yields. I just read an article on motley fool yesterday describing a "solid" 12% stock (MPLX). I'm sure there are others in this space that are bargains now.

Again, I like to spread my risk and cap my investments at 2% of my portfolio, but when events like the above appear I'll hit the buy button.

Thank you very much; great to have your input. Best wishes.