Hi Johnny,
Like you, as I reached and achieved retirement. I chose to take a portion of what was an all tech portfolio into dividend aristocrats.
That transition has taken me 5-8 years. It becomes a buy the dip strategy, when the dividend yield is what you find acceptable. Then there are black swan events which are opportunistic, when you have cash - a long term event that requires huge patience.
After I repositioned that, I had dividends coming in and yet valuations were high, so I bought preferreds. I was not so much concerned about the valuation of the preferreds as I was setting up a 6 year minimum of steady income to our account, with the idea if something happened to me, my wife would not have to time anything (she's not involved in my interest in markets). I just wanted a solid revenue stream that would allow her to cover: taxes, insurance, utilities,food, without being concerned on timing. So far, since I chose a low interest time period to buy the preferreds, it represents a loser if I sold today. That being said, the yield I'm getting is what I was and am happy with receiving.
Note to file, now is a really good time to do that! In fact I have doubled down on T/A and TDS V and U as their yields are now more than acceptable. Blending the 5 and 6 % with 8 - 11 % yields has set her up to be more than comfortable if I go to the happy hunting grounds. <smile>
If liquidation occurred it would be a small percent of the portfolio and I chose that approach vs the annuities or deferred income approaches out there. I viewed it as a wholesale cost of security.
Lastly, my last positioning has been CD's with JPM and Treasury's (none longer than 13 months in duration) with the higher rates available now. If the market rates available implodes, I can't envision having my money tied up for longer than that - just me and I'm OK missing a 5 to 10 year 1%- 2 % differential, again just me.
I think your realization that retirement is near and is shocking to a degree is almost universal.
I waited for a passion to surface, and it was a no show <LOL>.
I got up each morning and watched the market.
I'm a slow adopter, but found dividend investing where I wanted to go. Take it slow and be opportunistic.
I found selling put premiums on my cash to teach me patience. Strike price assignment less put premium taught me to be enjoy time decay on put premium. I found it lucky to be assigned stocks with my cash allocated for retirement income. It taught me patience without trading frequently on a speculative basis.
In time decay I trust.
I still think it is what annuity sellers do. And they make big money with that!
Retirement took me a while to enjoy. After you get revenue such that you still are increasing your net asset value, you'll slowly enjoy spending more vs. saving.
Then after a while the bigDshocker hits you as your friends of similar age begin to pass.
You realize your savings may well out last you. That's a bit of a paradigm shift.
I hesitantly ponder that now.
It is not to be feared, it is very comforting after a life of fearing market downswings. <smile>
I know you'll morph into conservative thinking and handle it well. I suspect you were well on that approach already.
Buying preferreds for the first time, I think is on the money for today.
do a budget, and cover your families needs. In today's market they are as good as treasuries but at half the tax rate - not bad. (not sure in Canada tho).
I've enjoyed recapping my thoughts on retirement. If you have further issues, feel free to discuss!
Bob |
