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This Isn't Your Father's Market: Long Live Income

Dec. 02, 2021 9:10 AM ETAMD, AMZN, CVS, HOOD, INTC, TSLA, VZ, WBA, WMT118 Comments


  • U.S. retirement savings today are heavily dependent on the stock market.
  • Technology has transformed investor's understanding and access to the system and has unleashed the era of impatience.
  • “Buy and forget” is dying - the average company lifetime has shrunk to ~10 years now, down from 60 years in the 1950s.
  • Now more than ever, you need a healthy income portfolio.
  • Looking for a portfolio of ideas like this one? Members of High Dividend Opportunities get exclusive access to our model portfolio. Learn More »

Two brass keys on an equity market fundamental document.

William_Potter/iStock via Getty Images

Co-produced with “Hidden Opportunities”


Medical advancements have been coming at a rapid rate, many of which are credited for expanding the expected lifespan of adults all over the world. There was a time when reaching 50

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This article was written by

Rida Morwa profile picture

Rida Morwa is a former investment and commercial Banker, with over 35 years of experience. He has been advising individual and institutional clients on high-yield investment strategies since 1991.

Rida Morwa leads the investing group High Dividend Opportunities where he teams up with some of Seeking Alpha's top income investing analysts. The service focuses on sustainable income through a variety of high yield investments with a targeted safe +9% yield. Features include: model portfolio with buy/sell alerts, preferred and baby bond portfolios for more conservative investors, vibrant and active chat with access to the service’s leaders, dividend and portfolio trackers, and regular market updates. The service philosophy focuses on community, education, and the belief that nobody should invest alone. Lean More.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Treading Softly, Beyond Saving, PendragonY, Preferred Stock Trader, and Hidden Opportunities all are supporting contributors for High Dividend Opportunities. Any recommendation posted in this article is not indefinite. We closely monitor all of our positions. We issue Buy and Sell alerts on our recommendations, which are exclusive to our members.

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Comments (118)

Phil in OKC profile picture
I enjoy reminiscing about what my father told me about investing during my youthful at home years, and what I know and am doing now. We have it so much more simple and cheaper to invest.
Thought provoking for sure. One of the reasons I come to SA is articles like this that help me think about my own decisions and actions.
Hidden Opportunities profile picture
@ubkwts Glad you liked the article. Thanks for your readership.
To me the strategies of constant trading is not compatible with the strategy of an income portfolio. Unless you are trying to replicate a fund that does that for income. Too complicated for me to keep up with that constantly. Losing patience is a recipe to get burned a lot. Almost every stock I ever bought went down after I bought. Without patience all real losses not temporary on paper.
Hidden Opportunities profile picture
@JayPar I fully support the idea of buying and cost-averaging the purchase if the security drops in value due to short term concerns (you are right, they are just paper loses and can transform with patience)
This is true for both sides of the portfolio (Value-Growth & Dividend-Growth)

However, if the drop is due to the fact that the company no longer serves the purpose of generating income (in the Dividend Portfolio), then I would actively look to replace that stream of income with another pick.

All the best!
ButscherDoug profile picture
@JayPar I recently heard that dead people have the best portfolios.
@ButscherDoug I think it was Buffet who said never sell any stock so dead people may indeed have better portfolios. And actually if I look back at many of the things I sold I would have been better off if kept them. Then again I've had a few that were up high and I would have been better off selling. But timing is never easy. If the 'new way' is better I think it has yet to be demonstrated. I don't know what kind of companies he is talking about that only last 10 years, not the kind I've invested in. I did have a couple bought or merged, nothing going under completely.
crrj profile picture
great info rida
Rida Morwa profile picture
@crrj you are very welcome!
Boy are you right about “not your fathers stock market”. There are no safe havens, even with legacy companies. Just months ago commenters flocked to AT&T articles to proclaim the stock a “bond alternative”, not sexy, but steady. What a fantasy that turned out to be. And how about that XOM? It’s divi has been on shakey ground for a while. When I invested in these companies three years ago I cold have never imagined how they would look today.
Rida Morwa profile picture
@GreenguyMN Yes times have changed, but the goal of making great income from the market remains the same!
@GreenguyMN you are going to need slot of patience with T to recover your money but I don’t see communications as an industry in jeopardy. XOM has a questionable long term future due to technological and policy trends.
Oldcarguy profile picture
Great Article!

I got FOMO a few years back, when my stable dividend companies suddenly started imploding because of techicaly advanced competion. So I started looking into the chrystal ball for companies with a future and started picking up small positions. Overall, it boosted the value of my holdings, but not my retirement income.

Since I have enough retirement income, I am investing now half in dividend companies and half in "future" companies. I have a short list of about 50 companies that interest me now, so by the time I get to invest in them they will either be too expensive or have faded away.

I'm having a ball!
@Oldcarguy I love the joy you bring to this game! You're absolutely right, I try to do the same, MLP land for tax sheltered income now, the future stuff to ease my FOMO, and the penny stocks, which, often have future companies, some of which blasted this past year or so!!
I hope everybody has as much fun as we do!
Rida Morwa profile picture
@Oldcarguy Thank you, I'm glad you enjoyed it!
MWRKY profile picture
02 Dec. 2021
Another great article and spot on as usual. I used to be a buy and hold forever investor but learned a hard lesson with GE, losing all of my gains thinking they will come back. Gone are the days of buy and hold forever; investors must watch companies closely as technology changes ever more rapidly.
@MWRKY I agree with you, this is why I'd rather copy and use a portfolio managed by experienced analysts.
@MWRKY I've been there too, and I had GE in the 90s. My broker at that time calls me up and asks "are you married to GE?" I had this funny feeling that I'd better tell him no.
I made a lot of mistakes back then. I was a little smarter with my 401(k). Not by much! I jumped up and down to get the most aggressive mutual funds they had. And promptly lost my butt!!!
I wouldnt even look at my statement anymore it was so bad, but I was stuck!
A few years later, I was on layover opening up my mail and, for a change, that 401(k) statement.
WOW!!! Did my eyes pop out!!!!
My piddling 20 bucks a paycheck turned into over 5k, and it ripped hard all the way into the turn of the millennium! Big contributor to my being able to retire!😜 I dont get any credit for that one either!
Rida Morwa profile picture
@MWRKY Thank you for your kind note! Holding a company with declining fundamentals can be a game of chicken. GE was blackbox-ish which did not help investors see the issues as clearly.
I have done well with growth stocks over the years. I am 57 and wife and I have a total of $2m in trust and retirement accounts. Have $1m total in trust account with 700K in growth stocks ( FAANG, MSFT, NVDA) and index funds and $100k in value dividend stocks and one etf. ( ABBV,BMY,GILD, SCHD ) and $200k in cash. Looking to invest the $200k cash from trust into income producing vehicles over the next year. I am not fearful of volatility but more rising rates and that good dividend stocks appear to be overvalued. I am open to any suggestions.
@aliveinsurance For income investments, Rida Morwa is your guy!!! I'm a believer.
edaskew profile picture
@aliveinsurance there are still under valued income producing investments out there. Rida et al can put you on them.
Rida Morwa profile picture
@aliveinsurance We actively find opportunities in the market and present them to our robust community of income investors. The best part is that they often help eachother find great opportunities as well.
Good overview. I must admit being a little skeptical of your articles early on, but over time they have won me over.
Hidden Opportunities profile picture
@autumnal Glad you hear you like the article. Thank you for your readership.
All the best!
craftbrewinfo profile picture
Excellent and timely article @Rida Morwa !
Things that I have been thinking about for my portfolio
Rida Morwa profile picture
@craftbrewinfo You are very welcome! I'm glad you've been mulling such things over.
SkiTheGoodStuff profile picture
Thanks, Rida. You bring up salient points especially regarding interest rates and bonds. Are bonds still relevant/necessary in a modern portfolio? I'm not talking about high risk junk bonds. My bonds are predictably losing money daily in real terms. Sure, they aren't susceptible to big corrections like even the best stocks are, but they can't really be called an "investment" anymore, can they?
Rida Morwa profile picture
@SkiTheGoodStuff I do not like low yield bonds, as inflation and thus interest rates climb, low yield bonds will take the hits the hardest. I do invest in fixed income securities - preferreds, baby bonds, and bonds - but I am selective and like to pick up "pass thru" entities debt primarily.
SkiTheGoodStuff profile picture
@Rida Morwa Thanks, Rida.
Moats and Income profile picture
@Rida Morwa agree….bonds are still just as valid…but the last time I purchased was 4-5 years ago when great companies were offering bonds as 4+%, sometimes at a coupon discount to boot..

Not much available in today’s market for those type traditional investment grade bonds…
Phil in OKC profile picture
This article makes the case, for near retirees trying to formulate a retirement portfolio plan, for the HDO income method. I went through this same mental exercise, about two years before I retired, as to what to do with my investing capital nest egg, which was made up mostly of mutual funds inside my 401K. I remember reading one of Bill O'Neal's books (How to Make Money in the Stock Market) where he said, "Never sell a mutual fund." He was not a proponent of using mutual funds as investments, but certainly discouraged "trading" mutual funds as one would common stocks. I was guilty of that, in my early ignorance of investing, and hence came to the realization that the more you handle your bar of soap, the smaller it gets.
Rida Morwa profile picture
@Phil in OKC Thank you for sharing your personal experience
@Phil in OKC bar of soap...🤣
No, I dont sell my mutual funds either, I'm trying to keep them around 50% of the account.
I only have the nerve when I have good backup. That's what they represent to me.
buying growth mutual funds and ETF's has helped protect myself from myself in that I don't expose myself excessively to single stock risk. Funds are my core and I do some individual stock investing, sometimes short term trades and some long term holds. After losing most of my money in 2000 I was able to rebuild to 1 million in the past 20 yrs. It's interesting watching Cathy Woods and ARK funds as I believe she is repeating the same mistakes of the late 90's investors, buying super high multiple stocks that can't maintain those valuations over the long term. Not realizing the difference between speculating and investing is illustrated here novelinvestor.com/...
Moats and Income profile picture
One must put as much DD into SWOT analysis of value/dividend stocks as growth stocks.

I have a hybrid portfolio of both…using the divvy/interest side for steady income and the growth side for cap gains.

This is beneficial under the US tax code as divvy/interest is treated as income vs cap gains - both have their own tax tables.

I find you can maximize after-tax overall income better in retirement years (w/o paycheck income) with a mix.

I do appreciate your articles and have selected several value/divvy stocks from your recos
Rida Morwa profile picture
@Moats and Income Thank you for your readership, I'm glad we can help you at times with ideas.
Bikerron1 profile picture
Great article, so true.
Rida Morwa profile picture
@Bikerron1 I'm glad you enjoyed it!
Actionable Conclusion profile picture
I posit that the 2020s is a poor environment for income investing.

I was primarily a value and income investor since the mid 90s.

In 2019 I jettisoned all my REITs, in early 2020 I jettisoned the little remaining income stocks I had.

The Fed printing, the low interest rates, the many industries being disrupted, the debt, the inflation, ... all combine for a market that penalizes income investors in ways I have never seen in prior decades.

Most investors have goals, as do I, but when the market dictates... its best to adapt.

In 2019 and 2020 I did just that. I now own Tesla, BYD of China, Rocketlab, and GBTC (bitcoin). If I need income, I can always sell some bitcoin. I def ain't selling Tesla.
Rida Morwa profile picture
@Actionable Conclusion That is quite the posit. I look forward to your full-length article defending that outlook with supporting evidence.
Actionable Conclusion profile picture
@Rida Morwa


Look at the total return of income stocks from where they were five years ago. Look at the total return of growth stocks from where they were five years ago.

Look at how many dividend payers cut or suspended all together.

Of course there are exceptions, and what really counts is not growth or income but whether one owns quality stocks, or poor stocks. Its not a stock market but a market of stocks... as has been said by many men wiser than I.

But hey, if you're outperforming the market on a 3 or 5yr, if you've been avoiding the myriad dog stocks and making bank... kudos to you.

There are many ways to win in the market.
@Actionable Conclusion I really have to agree with this, last year I had some real fireworks when I had plug power, and fuel cell, which I later cashed in!! I still have something called Mandiant, the former fire eye. A complete accident I can tell you! But I do look around, while I'm building up MLP land. How about XL fleet? This is all drooley stuff to me! But, in the end I went for what I understood. The oil patch.
But my broker is a little more sympathetic to your way of looking at things. So he gets the next big blob of $$$$$ at tax time to do what he likes.
Hes never done me wrong.
I dont mind playing both sides of the fence!
Rida, I only wish online investing was around 30 years ago! The information has never been easier to get, this platform, SA, is terrific. And Robinhood, or Etrade, in my case, is the perfect way to stash your spare change, keep tabs on all your holdings, and act quickly when you need to! Still getting MLP land!
Rida Morwa profile picture
@Wanda5 The internet has definitely sped up trading and made it more accessible, but on the other side of the spectrum, it has led to more risky behavior in trading as well. I do wish commission free trading had been around 30 years ago!
@Wanda5. I have a lot of Riets and Mlps for a high yield at E-Trade and I throw in a couple high flyers to keep my interest. Recently bought VIR. Am a bit worried about higher taxes so am moving into tax exempts like PMF/PMX with my dividends. Am looking forward to year end sell offs to get into others at a good price, making their yield higher. Like the one commenter said " Its time, in not Timing". I like Financials and Oil& Gas for my main account. I enjoy Mr. Morwa's works. Pay attention to him.
@Bill Soule ok I'm afraid of REITs right now, the same way I wouldnt buy property in this overheated market. Maybe when it turns.
This other stuff that clutters my account occurs while I'm shopping; I'll see something, like plug power, I like it enough that I'll buy a few shares and forget about it until one day i open up the app and....where did that $$$ come from?
It's not life changing money since i only put down a few bucks. I had no idea it would take off.
I'm grateful for my broker, he sure hates MLP land, but hes great for everything else!
And then I go off and poke around the penny stocks again.
That's how I found plug and fuel cell and mandiant, and XL fleet, and one i just picked up, GSAT.
If GSAT ever gets off the ground, rural residents like me might be able to do live trading someday!

I think I have some tax exempt stuff in my mutual funds, I think.
There's a lot in there. I just try to respect the balance in the main account. I give the money to the broker and he puts it somewhere in there!
Clarity_Fund profile picture
I carry ~100 positions, my starting dividend yield is ~5.75-6.0%, and I am ~60% REIT's. I am happy with this as I get great current income, and growth on par or ahead of SP500 since REIT's historically outperfom SP500.
Rida Morwa profile picture
@Clarity_Fund Sounds like quite the portfolio. If you're happy with it and the income it provides, then that's the best scenario one can ask for.
Dividend Ambassador profile picture
Rida, great article and lots of great analysis. That said, my sniffer tells me your wine and roses scenario for a market collapse for your basket of high yield instruments is an extreme case of wishful thinking at best. Those instruments are high yield for a reason. The vast majority are not “accidental” high yield. They are high yield bc the principal is at greater risk not lower risk. My instincts and experience tell me that in a market collapse some of the instruments in you basket go to a small fraction of current market value AND are forced to cut dividends. I would think many of your investors in a market collapse would give anything to have had their nest egg in the likes of CVS.

If I’m wrong you are an alchemist, a genius, and a magician. And if I’m wrong everyone is insane not to copy you or have you manage their nest egg.
Rida Morwa profile picture
@killiondt When do you want to sign up for me to run your nest egg? Just Kidding. All I can do it point out my views and explains the best I can, I leave the follow up decisions to those who know you best - yourself.
Dividend Ambassador profile picture
@Rida Morwa I agree. I enjoy reading your articles too. They are very interesting and well written.
Rida Morwa profile picture
@killiondt Thank you for your readership and well-thought out comments.
Couldn’t agree more! Also because picking the right winner in a sector is hard, I like to invest mostly in ETFs or CEFs instead of single stocks to rely on them to produce income for me long term. Funds may go down in value, too but they won’t go to zero as they will sort out the losers and replace them. That’s why I prefer $RQI, $UTF, $THW or $PCI over their individual holdings. They do the stock picking for me and provide me with reliable income at the same time.
Dividend Ambassador profile picture
@domdom82 boy oh boy do you have a lot of faith in those fund managers! Wow.
Rida Morwa profile picture
@domdom82 I'm glad you agree. I like a both/and approach. I like finding excellent individual holdings as well as using CEFs to leverage the skills of others.
@killiondt Are you an expert in every sector? Neither am I but I want exposure to more sectors that I can understand in depth. So unless you work full time as an analyst there is little option to make the right decisions on stock picks. Even full time analysts usually focus on one or two sectors only. To truly understand what is going on in an industry you must have worked a lifetime there, know it inside and out. I'd rather pay 1% in fees to only the top fund managers and have some peace of mind.
Spot on. The times they are a changing - for most of us.

What you don't mention is that much of this analysis doesn't apply to the new aristocracy in world history and our nation, namely, government employees with their rich defined benefit pension plans with cost of living adjustments and 24 K gold health care.
Dividend Ambassador profile picture
@Antiquarian as an early GOVT retiree, the health care is great to have as I am not eligible for Medicare for several years but it isn’t anything at all close to 24k gold. It is more like maybe decent pewter???…I pay over $500 a month premium and tons of things aren’t covered. 0 dental. 0 eye care. 0 hearing. There are LOTS of out of pocket expenses even in areas that are “covered” you wouldn’t imagine. It is nothing close to free health care. It is not even in the ballpark of free healthcare. It is a Chevy and not the shiny new BMY you imagine it to be. It’s great vs nothing but the myths about how great it is are just nuts.

RE: The pension. It stays flat until you reach minimum SS retirement age. It is only 34% of my final annual salary.

Federal retirement is a wonderful supplement but you should also have big brokerage account and big 401k (GOVT version is Thrift Savings Plan-TSP).
@killiondt You points are well taken. But, as the article notes there are people working in the private sector who retire with no health care benefits in their future they don't purchase for themselves. Plus their pension depends on their investments skills.
Rida Morwa profile picture
@Antiquarian I'm glad you enjoyed our report!
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