06-22-2014, 03:44 PM
(06-21-2014, 08:11 PM)Ok Red Wrote: I recently subscribed to F.A.S.T. Graphs and the results were eye opening. I'm 55 and my window to retirement is 4.5 years minimum and 9.5 years maximum. It was clear that my carefully constructed portfolio of relatively low yielding high DGR stocks would be great if I was 30, but was obviously not going to get me where I would have the flexibility to retire when I wanted (really would like to have 10% return on cost). As a result, I had been branching out to REITs and BDCs to start with yields that are much closer to my desired return on cost. So far I've picked up O, OHI, STAG and DLR in the REIT area, and MAIN and PFLT in the BDC area. This thread, and Be Here Now's post above, really drives home that fact that I need to be looking harder at higher yielding lower DGR equities. I'll keep the positions I already have (UNP, WAG, CMI etc) but will be investing more of my cash stash in equities that get me a head start on my desired return on cost. I have lots of work to do, as I've not spent a lot of time in this end of the market...
There has been lengthy and heated discussion on Seeking Alpha about the need, or lack thereof, to get some experience under your belt when transitioning from total return investing during the accumulation phase, to dividend investing during the retirement phase. Some think that because the mindsets are so different, that it is not possible to quickly convert your TR portfolio into a well thought out dividend income portfolio. Others think that, with so many publicly published dividend portfolios that all one has to do is pick one and use it as a guide.
I think it can be similarly argued that either a) you need to take time to learn how to convert from a low yield high growth (LYHG) portfolio to a high yield low growth (HYLG) portfolio, or b) you can pick and choose from the many publicly published HYLG portfolios and get up to speed quickly.
I have been feeling (blundering) my way into the HYLG phase for 3+ years, the length of time I have been retired. I am still learning, and I spend more time doing this than anything else. I have found that there are so many high yield alternatives, with so many details to be grasped and owned, that a quick conversion has not been possible. I think your decision to start on your learning curve with plenty of time to get up to speed, make mistakes, and learn from them, is a prudent approach.