06-07-2014, 02:07 PM
I have started thinking about some of the possible transition phases, all of which involve me not being actively involved. We - my wife and I - invest primarily for high current income and secondarily for income growth. This is a natural consequence of an ever shortening time over which income is needed. The older you become, future income growth naturally declines in importance. We own a number of high yield stocks, and these require regular due diligence. It would not be realistic to expect my wife to continue with the due diligence that I perform, but if either or both of us were to continue to need investment income, we could reduce it somewhat.
What I would ideally like is a combination of relatively stable high current yield and a bit of true income growth, both of which someone else would manage professionally, i.e. as a fiduciary.
This could be an investment professional who understands and endorses dividend growth. I know of one commenter on Seeking Alpha who qualifies, Doug Meeks. David Van Knapp wrote an article several years ago that identified several others.
The high current yield component could be a fund or ETF that generates high current income, and the income growth component could be a fund or ETF that truly does dividend growth investing. There are a number of the latter that claim dividend growth, but I have not seen any that actually qualifies as dividend growth. They all reduced dividends during the financial crisis, and they all have a puny current yield.
As for high current income, there are many candidates and I certainly don't know all of them. Some I can think of:
> DVHL, a 2x leveraged ETN linked to the price and income performance of the NYSE Diversified High Income Index
> DVHI, similar to DVHL but not leveraged
> CEFL, a 2x leveraged ETN linked to the price and income performance of the ISE High Income Index
> BDCL, a 2x leveraged ETN linked to the price and performance of the Wells Fargo BDC Index
> BDCS, similar to BDCL but not leveraged
> AMU, Alerian MLP Index ETN
> MLPL, a 2x leveraged ETN linked to the price and performance of the Alerian MLP Infrastructure Index
> MLPI, similar to MLPL but not leveraged
> DVYL, a 2x leveraged ETN linked to the price and performance of the Dow Jones Select Dividend Index
> HYG and JNK, junk bond ETFs
> PFF, a preferred stock ETF (and part of DVHI and DVHL)
What I would ideally like is a combination of relatively stable high current yield and a bit of true income growth, both of which someone else would manage professionally, i.e. as a fiduciary.
This could be an investment professional who understands and endorses dividend growth. I know of one commenter on Seeking Alpha who qualifies, Doug Meeks. David Van Knapp wrote an article several years ago that identified several others.
The high current yield component could be a fund or ETF that generates high current income, and the income growth component could be a fund or ETF that truly does dividend growth investing. There are a number of the latter that claim dividend growth, but I have not seen any that actually qualifies as dividend growth. They all reduced dividends during the financial crisis, and they all have a puny current yield.
As for high current income, there are many candidates and I certainly don't know all of them. Some I can think of:
> DVHL, a 2x leveraged ETN linked to the price and income performance of the NYSE Diversified High Income Index
> DVHI, similar to DVHL but not leveraged
> CEFL, a 2x leveraged ETN linked to the price and income performance of the ISE High Income Index
> BDCL, a 2x leveraged ETN linked to the price and performance of the Wells Fargo BDC Index
> BDCS, similar to BDCL but not leveraged
> AMU, Alerian MLP Index ETN
> MLPL, a 2x leveraged ETN linked to the price and performance of the Alerian MLP Infrastructure Index
> MLPI, similar to MLPL but not leveraged
> DVYL, a 2x leveraged ETN linked to the price and performance of the Dow Jones Select Dividend Index
> HYG and JNK, junk bond ETFs
> PFF, a preferred stock ETF (and part of DVHI and DVHL)