Many investors are best suited to low volatility, income focused portfolios. While these may seem easier to design, they are really much more difficult. Logic would first suggest that we design these portfolios with CD’s and bond mutual funds. This works fine, but the investment returns are often not sufficient to meet the needs of the investor.
Our enhanced income strategy seeks to add several non-traditional income investments to these portfolios in order to enhance the income returns. These investments may include:
Individual stocks with 3% to 5% dividend yields
Preferred stocks with 5% to 7% yields
Corporate Bond ETFs
Exchange traded energy partnerships with 6% to 9% yields
Natural Gas Pipeline partnerships with 5% to 8% yields
Income Real Estate Investment Trusts (REIT’s) with 5% to 9% yields
Inflation Indexed
Notes and I bonds
By
using diversification techniques and portfolio
optimization strategies, limited investments
in these areas can significantly enhance the
income produced by the portfolio. We work
with our clients to determine the appropriate
balance between the demand for current income
and the increased risk to principal value.
