Hi Johnny,
WELL SAID.
I've been investing my savings since 1973.
So many of the great historical market sell offs caught me being young and aggressive with margin.
It prevented me from making big positional changes.
I have always thought:
If only I had bought semis in 2003 to 2005 - I did buy COHU and BRKS
If only I had bought banks in 2008 to 2010
If only I had bought energy in 2014 to 2020 - WHICH I DID - KMI, CVX, XOM
A margin free portfolio with a substantial dividend flow that exceeds one's real estate taxes, utility bills, and insurance payments, along with being debt free, allows anyone to reposition their portfolio when the next general market sell off occurs.
They are not to be feared, they are to be taken advantage of.
I track my expenses every year when I do my taxes. Those bills that will always continue, I reposition my portfolio into fixed income instruments (primarily preferred common stocks). If something does happen to me, my wife will never be pressed to sell shares during a decline in the market. Qualified preferred dividends get low taxation rates and are usually good for 6 years at least. We do rely on Social Security for our food and entertainment expenses - which are minimal. I hunt and fish and we have 7 large raised garden beds which we enjoy, including the preserving and canning of what we grow.
Now is a very good time to buy preferred commons as they move down in price as inflation and interest rates go up. It is a conservative nice addition to one's portfolio. I started when rates were in the ZIRP time.
So their prices have declined below my initial purchase prices, but I have added on. It is a "peace of mind" position that I embrace with comfort.
Pretty simple plan really.
The one thing all people need to understand is it always takes longer to happen - so living into the later years is part of the plan! Ask Warren Buffet! LOL
Bob |
