I am a retired investor with market experience going back to the 1960s. I was a software engineer for 42 years, retired in 2010, and did some part-time consulting from then through 2017. I am not an accountant and not a financial professional. My wife and I have established a set of guiding principles for our investment life: • Change is the only constant in life. Everything in this plan is subject to change. • Never touch your principal. Wealth is built and maintained by not spending it. Wealth is the primary buffer between ourselves and blind chance. • Exploit folly, do not participate in it (thank you, Chuck Carnevale). Do not follow the crowd, which is more often than not wrong. • A portfolio is like a bar of soap – the more you touch it, the more it shrinks. Do not be a trader. • Own assets, avoid liabilities. Assets generate income. Liabilities generate expenses. Based on these principles, we have established two investing goals: 1) sufficient current income with a comfortable buffer, and 2) increasing future income to maintain our buffer. Our primary investing goal is to generate sufficient current income to cover that part of our living expenses not covered by pensions, with a comfortable buffer. We are retired and depend on investment income to meet the majority of our living expenses. As we age and get closer to the end, current income becomes ever more valuable, and future income becomes ever less valuable. This reality informs all of our investing decisions. However, we know that inflation will cause our income needs to rise, so we also plan for increased future income, which is our second investing goal. To meet our current and future income needs, we rely on 2 Social Security pensions, 1 private pension, income generated by investments, and fully paid up long term care insurance. It is common to allocate a retirement investment portfolio with some percentage in stocks and the balance in fixed income, such as 60/40. We look upon our pension income as the equivalent of fixed income, with the added benefit that Social Security is indexed to the CPI. In the past we owned no fixed income and had no plans to do so in the future. The future has arrived along with a need for more investment income than pure DGI provides. After an extensive search for alternatives, we discovered baby bonds and preferred stocks, and we like the higher current income we can get from these investments. We have therefore redirected some of our investment capital into these investments, and as a result our investment income is now significantly greater than it would have been otherwise. We categorize dividends and interest as income, and capital gains as return of capital, not income. Therefore, our goals are to be met from dividends and interest only. Investment income currently meets our primary investing goal. We invest in a blend of mostly medium yield (3%-6%) stocks with high dividend growth, and fixed income securities with yields in the range of 5%-8% with no growth. We expect our medium yield stocks to provide the income growth needed for the future, our second investing goal. We currently own common stocks, preferred stocks, and bonds. Our portfolio requires regular attention to avoid possible dividend cuts and deletions. As we age, our mental faculties are in decline, and we will become increasingly less able to perform portfolio monitoring intelligently. There will come a time when we may need to use some form of income oriented index ETFs to carry the income generating burden. We want to behave like landlords and collect rents, but without the risks and demands of owning real estate directly. Dividends and interest are our rental income, and as once-removed landlords we own real estate investment trusts (REITs). We want our non REIT income to be generated by long-lived, steady companies that provide products and services that we all need regardless of the economy, and thus can be relied upon to provide steady, and steadily growing, income. This requirement points primarily at consumer staples stocks. We own the best consumer staples stock, and in fact the best stock, mighty MO. Our preferred shares are mostly in the REIT sector, with the major exception of the CHS preferreds (CHSCL etc). • Some of my investing history During much of my working years I used technical analysis (TA) to invest in individual stocks (I was an early fan of Joseph Granville and I bought an Apple II in 1980 because Granville brought out OBV software for the Apple at that time), and I speculated with short selling and commodity trading. Those were not the best investing decisions I ever made. Later I invested in stock mutual funds and ETFs for total return, with inconsistent results, and no comprehensive plan. As a software engineer / system architect in a lead position I had little time or energy for serious investing skills development. In 2005 I had pretty much given up on getting market beating results, and felt that I was getting too old and too close to retirement to continue swinging for the fences, so I decided to buy a variable annuity that guaranteed a minimum return of 6% per year, compounded, with the upside limited only by the performance of the mutual funds offered for investment. I decided to let the insurance company bear the market risk for me. I also had a 401k plan at work to which I contributed the maximum and got the company match. A year or so before 2008 I used a retirement investing projection tool provided by Fidelity, which said the worst returns I could expect in retirement were positive but not spectacular, and the best were indeed spectacular. At that time I was invested in mutual funds and ETFs through my 401k and the variable annuity and had not directly owned stocks since shortly before the start of the great bull market in 1982 (Granville famously missed the whole thing). I thought, with a bit of skepticism but not nearly enough, that I was set. We all know what happened in 2008-09. That experience put me off Monte Carlo simulations and Modern Portfolio Theory for life. When I retired I converted my 401k to a rollover IRA brokerage account and invested in ETFs. I thought I was being appropriately conservative but also ready to capture capital gains by investing in VIG and VCSH. Then I found Seeking Alpha, and then - thank my lucky stars - David Van Knapp, and the DGI light went on. I had spent most of my adult life thinking I was smarter than most people by relying on TA, and then later letting the insurance company assume market risk. I remember learning about the 200 DMA when I was in my 20s, which is a long time ago, and thinking how revolutionary this idea was and how I should be able to use it to my advantage. Fortunately for me and my family, I also was pretty good at software engineering, so I had a reasonable retirement nest egg accumulated when the time came. With the concepts and methodology of dividend growth investing, and more recently REITs and preferreds, I now have sleep well at night investments that just keep on churning out increasing income, something that could never be said about using TA. I started with DGI too late in life to commit totally to low yield, high growth stocks. I hope to capture the double compounding of DRiP investing with that part of my portfolio that is not fixed income. We have recently (Nov 2014) rolled over all of the variable annuities into brokerage accounts. We now believe that we can get sufficient income from our dividend investing strategy, and we want to retain ownership of the annuity capital. Even more recently I found this article by Bruce Miller. Using this as a starting point, I immersed myself in the world of preferred stocks, and as a result about half of our capital is invested in preferreds and baby bonds. I used my software engineering skills to write VBA code in Excel that automates the calculation of stripped price, stripped yield, IRR to call, duration, and many other data points for preferreds and baby bonds. • Tools and Teachers Tools I use include the CCC list, F.A.S.T. Graphs, Morningstar Premium, the EDGAR web site, and Excel. I get ideas from the many informative articles by (among others) the following (in no particular order): Bill Stoller, Chuck Carnevale, Brad Thomas, Ron Hiram, David Van Knapp, David Fish, Robert Allan Schwartz, Dividend Growth Investor, Dividends4Life, David Crosetti, Tim McAleenan Jr., Reel Ken, Bret Jensen, Alan Brochstein, Chowder, Dane Bowler, Bob Wells, BDC Buzz, Scott Kennedy, Bill Maurer, Richard Shaw, Bruce Miller, Preferred Stock Trader, Jussi Askola, Arbitrage Trader. Favorite commentators who are not yet authors include Elliot Miller, Paul Leibowitz, mbkelly75, surfgeezer. I use FAST Graphs heavily for valuation research. Since my pivot toward REITs, FAST Graphs has done a similar pivot. I never consider an investment before first consulting FAST Graphs. Thank you Chuck. The best investment advice outside of Seeking Alpha have been 'The Intelligent Investor', ‘Securities Analysis’, and 'The Single Best Investment'. • Some historical portfolio stuff My DGI portfolio was started on 2011/4/20 with CTL, which I have since sold. It was a beginner's mistake. Subsequent mistakes were MLPs, and to a lesser extent, mortgage REIT common. I did not allow for any circumstance that could cause WTI to fall as far and as fast as it has, so I lost money on MLPs. The prolonged flattening of the yield curve, plus the persistent markdown from NAV for the mortgage REIT commons, has made these unappealing as long term investments. Now I keep my distance from anything that is dependent on commodity pricing, and I invest very carefully in the carry trade. A glaring mistake was selling JNJ when it languished for several years. Subsequent to my disenchantment with mortgage REIT common, I discovered mortgage REIT preferreds, along with preferreds and baby bonds in general. I have decided that agency mREIT preferreds are a reliable source of steady income and I own some. • Some ongoing portfolio stuff The target dividend growth rate for our entire portfolio was formerly 5%. With our pivot to higher current income at the expense of higher future income, this target is not realistic, and I now hope for 3-4% growth. I attempt to use current yield to allocate our investments so that each position in aggregate generates approximately the same amount of income. I learned the basic methodology from a comment on a SA article. SA is a wonderful resource! I have published an SA Instablog that describes the method: http://seekingalpha.com/instablog/902946-be-here-now/4581516-portfolio-allocation-for-equal-income-from-each-position-using-excel I say 'attempt' because Mr Market rarely gives me what I want when I want it. More often than not it is a matter of taking what is available at a price I am willing to pay. • Current portfolio: Equity REIT: DLR, NSA, O Consumer staples: MO BDC: GBDC, GSBD, MAIN, MRCC, PFLT, TCPC, TSLX cumulative preferred: AGNCB, AGNCN, AHT-I, ANH-C, CHSCL, CHSCO, CLNS-J, CMO-E, CYS-A, CYS-B, DS-B, DS-C. EPR-E, GAB-G, GGZ-A, HT-D, MNR-C, NLY-F, QTS-A, RLJ-A, STAG-B, VER-F DRiPs: DLR, EQIX, MO, NSA  https://seekingalpha.com/article/3958900-portfolio-preferred-stock-will-provide-life-income-superior-equivalent-life-annuity
Researching and writing at the corner of Main St. & Wall St. where real estate often intersects with trends in: technology, ecommerce, office/industrial, healthcare, cloud computing, energy infrastructure & green initiatives.
Data Center Knowledge - I cover business and investing news in a weekly column: DCK Investor Edge. Sr Contributor writing about data centers REITs -- a new and growing asset class -- attempting to bridge the gap between technology & traditional REIT investors.
In Q4 2015, it became clear to me that public cloud "friend or foe," was going to be a positive catalyst for Data Center REITs. The global public cloud giants follow a bifurcated strategy of owning and leasing space. Another paradigm shift involved Amazon Landlords, industrial REITs which own fulfillment, warehouse/distribution, and smaller "last mile" urban infill properties, and the DC REITs which support exponential growth of the AWS public cloud (as well as MSFT Azure, Google Cloud Platform, IBM Cloud, Oracle Cloud, Salesforce, and others).
Many SA readers have followed my work over the past few years to profit from my expertise, research and analysis. The majority of my insights and analysis are now published on REITs 4 Alpha, an SA Marketplace service where members get real-time access on Live Chat each day the market is open.
I have over 25 years of experience as a: developer of institutional quality office and industrial facilities, general contractor, homebuilder, managing general partner for private limited partnerships, and have performed consulting and transactional real estate services for others, including entitlements for planned commercial/office/industrial developments.
Past job experience included: V.P. of Energy Services for a Florida based Mechanical Contracting company, which subsequently was acquired by EMCOR (NYSE: EME). Responsibilities included development and "financial engineering" of projects to reduce energy consumption and total cost of ownership solutions, partnered with the two major Florida electric utilities, and private companies, (including Enron Energy Services!).
Education: UCLA - BA Economics, including graduate coursework in Real Estate Finance.
Masters Degree from St. Thomas University - Miami, FL