JEPI - Warning: Don't Be Lazy With Your Retirement Portfolio
2024-02-19 09:15:00 ET
Summary
- Creating a "lazy" dividend portfolio with just a few picks is not recommended, as it lacks diversification and exposes the portfolio to significant risk.
- Funds that provide stable dividends may not always deliver consistent returns, as the underlying assets and market conditions can change.
- The top-performing stocks in the market tend to change over time - difficult to predict which stocks will continue to outperform in the future. Diversification is key to managing risk.
Co-authored with Beyond Saving.
Today, I want to address a question I have received before, one that I've seen recent articles purporting to provide. Can you create a "safe" dividend portfolio with just a handful of picks?
When I suggest that you have at least 42 different holdings in your portfolio, some readers are overwhelmed. It sounds like a lot. And it is, that's the point. Having small allocations protects your portfolio. Naturally, people want an easy answer.
You've probably seen some articles that will have something along these lines:
You can have a portfolio that yields X% of "safe passive income"! Just buy these 6 holdings! ...
Warning: Don't Be Lazy With Your Retirement Portfolio