Creating an Income Portfolio

The Small Investor

This is a continuation on the series on retirement investing.  See the first post here.

The goal of investing in a traditional retirement portfolio is to generate enough income to pay for expenses so the principle can be left intact.  There must also be a growth aspect to the account to preserve the account value as it is ravaged by inflation and to keep the income level rising enough to keep up with inflation.  Ideally one would like enough cash to be generated from income and dividends to meet monthly expenses such that the sale of securities would not be needed.  When interest rates are sufficiently high this can be accomplished easily using bonds, high yielding stocks, and perhaps real estate assets.

If interest rates do move back up, the typical retirement investments — those that pay a good dividend — are:

1.  Utilities – Because utilities are typically…

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