Co-produced with Treading Softly
Here at High Dividend Opportunities, I try to expound, explain, and energize ideas within the hearts, minds, and souls of retirees and investors.
One area we often have to remind retirees and investors about is allocations. Not just to maintain diversity across multiple securities – The Rule of 40 – but also through how much of your portfolio you allocate to each sector.
Think of an orchard for a second. Each tree can be expected to produce a certain amount of fruit. So each tree could represent an individual security – the fruit being its income yield. The types of trees you plant, or the family of trees you plant, would be your sector allocations. Apples are REITs, pears are fixed income, cherries are energy, and so forth. As such you need to be cognizant of how many trees you plant of each type of tree. Too much of any one tree could expose your portfolio to additional risks. As an investor, being nimble means not planting too many trees but also being ready to adjust your portfolio as needed. This is where the orchard idea breaks down – it can be hard to uproot, move a tree, and replant a different one especially when compared to the three to four clicks it takes to trade a security online.
I've Got 60% of My Retirement in Two Sectors
Personally, I have 60% of my retirement in two "sectors" that I see as stable to generate income and containing many undervalued opportunities.
Members of High Dividend Opportunities were notified as I shifted my focus more heavily into these sectors. My team and I release monthly if not weekly reports on what securities we are buying up in any week from within our model portfolio as exclusive reports.
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