JEPQ - If We Could Only Buy 5 Funds Today For Next 5 Years
2024-06-29 09:00:00 ET
Summary
- Income investors should focus on decent income and total returns exceeding inflation by at least 4%, not necessarily matching S&P500 returns.
- Investing in funds like ETFs and CEFs can offer diversification, ease of trading, and potential for active management.
- We present a five-fund portfolio for the next five years, providing exposure to dividends stocks, MLPs, utilities, real estate, and high-growth stocks with 7% income.
Introduction
This article is mainly for passive income investors who would rather invest for the medium or long term and not have to worry about them too frequently. Also, we assume that income is the primary criterion for income investors, even though we all like to have decent overall returns.
Recently, it has been increasingly difficult to match the S&P 500 (SP500) returns because the allocations in the S&P 500 have become skewed. Just the top 7 or 8 technology companies in the S&P 500 represent roughly 30% of its assets and have captured over 60% of the gains this year. This trend can obviously continue as markets are always unpredictable, but it is not likely to last forever. So, especially income investors should not always expect to match the returns of the S&P 500, as they can't afford to allocate 30% of their portfolio to technology stocks, which pay close to nothing in dividends....
If We Could Only Buy 5 Funds Today For Next 5 Years