As of this moment, my portfolio's current market value is 1.27% below its total cost basis. I understand that this information alone is not that significant, because it doesn't take into account the time period involved, but it is relevant to everyone who considers themselves a capital gain investor, a total return investor, or anyone who "marks to market".
I am an income investor, so I pay far more attention to the income produced by my portfolio than I pay to its current market value. As of this moment, my yield on cost (YOC) (and by that I mean "total current yield divided by total cost basis") is 4.88%. This includes all dividend reinvestment, which adds to the cost basis.
It struck me that if the stock market closed for 3 months (1.27% / 4.88% = 0.26 year, or almost exactly 3 months), or if all share prices froze for 3 months, then the dividends I would receive over those 3 months would compensate for the 1.27% unrealized capital loss, and I would have exactly the same amount of money now as I invested in the past.
Some people would not be satisfied with "running harder and harder yet staying in the same place", but I don't see it that way, because I don't look at the market value - I look at the income. My portfolio generates more income today than it has ever done in the past. I have certainly not "stayed in the same place" income-wise.
I will be able to retire in 2 years, and live off my dividends, without ever being forced to sell anything in order to produce cash.
I won't have to worry about "withdrawing" (which is a strange euphemism for "selling") 4% of my assets every year, or 3%, or any percent.
I won't have to worry about price volatility (i.e. beta).
As an income investor, my only concern is: will the overall portfolio dividend growth over the next year exceed the inflation over the next year? That needs to happen in order for me to not lose purchasing power over time due to inflation.
My focus on income allows me to "sleep well at night" (SWAN).
I wish the same to all of my readers.