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I think of preferred "stocks" as bonds, not stock.
I would be pretty fine having just preferred and zero bonds.
The yield up and down, is fake math.
I buy a Preferred at $25 yielding 5%. (thats $1.25 per yr).
The market crashes.
My preferred drops to $12.50 and now yields 10% -> wow my yield doubled and I'm earning ($1.25 per yr).
That is why I call it fake math, the yield might go up and down, but you get the same amount of dollars in your pocket for the stocks you currently own.
By the way common stock yields also rise when the market crashes, and most of the companies don't cut the dividend, unless they are heading for bankruptcy (like the banks almost did).
So if you feel safe with 40 common stock and the rest what I call "bonds" , good for you.
I would be pretty fine having just preferred and zero bonds.
The yield up and down, is fake math.
I buy a Preferred at $25 yielding 5%. (thats $1.25 per yr).
The market crashes.
My preferred drops to $12.50 and now yields 10% -> wow my yield doubled and I'm earning ($1.25 per yr).
That is why I call it fake math, the yield might go up and down, but you get the same amount of dollars in your pocket for the stocks you currently own.
By the way common stock yields also rise when the market crashes, and most of the companies don't cut the dividend, unless they are heading for bankruptcy (like the banks almost did).
So if you feel safe with 40 common stock and the rest what I call "bonds" , good for you.