Maybe I’m not doing anything wrong, but I wanted to hear other perspectives because I may be missing something about the big picture, so I’m looking for constructive criticism on what I could do better or what I’m doing wrong.
My investment philosophy:
I am a contrarian income investor. I look for dividend equities (mostly CEFs) the market has mispriced, collect the 6-12% dividend and if the stock goes up its icing on the cake. I like the philosophy because it’s similar to how I purchase(d) rental property. My equities portfolio is about 15% of my net worth and I am 45 years old. I have about 50% in rental properties, 20% in secured mortgage notes, and 15% in cash.
**Things I look for:**
**Discount** — at least 5%, preferably 10%+, to NAV (CEFs, BDCs) or to fair value (REITs, stocks)
**Yield** — generally 6-15%, flexible if the discount is compelling enough
**Dividend safety** — covered by actual income, not funded by return of capital
**Fundamentals** — solid underlying businesses, proven management, no distribution cuts
**Sector comparison** — the sector itself must be reasonably valued, not just less overpriced than the rest
**Other** — reasonable leverage, fees that justify themselves, adequate liquidity
**Fit** — right account for tax efficiency, and no doubling down on real estate since i already have 50%+ of net worth in real estate (income producing) and well secured mortgage notes.
I do hold a lot of positions, but I like the diversification. I use paid AI research models to check up on current market conditions and update the situations with each stock so that I don’t go crazy trying to keep up with every position.
Sorry for the long list. The dividend is next to the ticker, and there are a few positions that are more about growth than about dividends, like Apple, obviously, for me that’s a forever hold.
AMGN — 3.2% — Amgen
AAPL — 0.5% — Apple
ARCC — 10.3% — Ares Capital
BXSL — 11.5% — Blackstone Secured Lending Fund
BR — 2.5% — Broadridge Financial Solutions
D — 4.3% — Dominion Energy
EPD — 7.0% — Enterprise Products Partners
DOC — 5.6% — Healthpeak Properties
MAIN — 7.5% — Main Street Capital
MDT — 3.5% — Medtronic
MSFT — 0.8% — Microsoft
NKE — 3.6% — Nike
SRE — 3.0% — Sempra
HQL — 11.3% — abrdn Life Sciences Investors
ADX — 7.6% — Adams Diversified Equity Fund
AMLP — 7.5% — Alerian MLP ETF
HYT — 9.5% — BlackRock Corporate High Yield Fund
BMEZ — 8.5% — BlackRock Health Sciences Term Trust II
BST — 7.3% — BlackRock Science & Technology Trust (residual 3 shares)
RA — 10.9% — Brookfield Real Assets Income Fund
RFI — 8.6% — Cohen & Steers Total Return Realty Fund
UTF — 7.3% — Cohen & Steers Infrastructure Fund
RLTY — 8.5% — Cohen & Steers Real Estate Opportunities & Income Fund
DSL — 11.0% — DoubleLine Income Solutions Fund
DLY — 10.0% — DoubleLine Yield Opportunities Fund
ETO — 7.9% — Eaton Vance Tax-Advantaged Global Dividend Opportunities
ETB — 8.5% — Eaton Vance Tax-Managed Buy-Write Income Fund
XYLD — 9.5% — Global X S&P 500 Covered Call ETF
BTO — 7.0% — John Hancock Financial Opportunities Fund
JEPI — 9.7% — JPMorgan Equity Premium Income ETF
ASG — 8.5% — Liberty All-Star Growth Fund
NBXG — 9.3% — Neuberger Berman Next Generation Connectivity Fund
NEA — 5.5% — Nuveen AMT-Free Quality Municipal Income Fund
NPCT — 10.9% — Nuveen Core Plus Impact Fund
NZF — 5.5% — Nuveen Municipal Credit Income Fund
QQQX — 7.0% — Nuveen Nasdaq 100 Dynamic Overwrite Fund
NAD — 5.5% — Nuveen Quality Municipal Income Fund
JRI — 12.7% — Nuveen Real Asset Income & Growth Fund
JRS — 9.0% — Nuveen Real Estate Income Fund
PDI — 15.9% — PIMCO Dynamic Income Fund
PDX — 10.0% — PIMCO Dynamic Income Strategy Fund
RMM — 7.5% — RiverNorth Managed Duration Municipal Income Fund II
I checked my actual return for the last couple years and it averages about 12% and I guess that includes the dividends as well as the growth on the positions, and of course I’ve sold off many when they’ve grown, or sometimes at a loss if it seems like it’s headed in the wrong direction
Admittedly, I don’t have a lot of growth positions. I really like this stability of dividends. But I definitely have the risk tolerance for what I guess you’d call a growth sleeve? As I sell off houses from a rental portfolio, I will be adding to the brokerage account and as it grows, I need to make sure that I’m not missing something at the macro level, in the big picture. The Equity portfolio will probably grow to 50% of my net worth over the next 5 years, so I have to start giving it more serious consideration.
Anyway, if you took the time to read all that I really appreciate it. I know it’s a lot to take in and I’d love to hear feedback good or bad, I’m open to criticism, and I won’t get offended at anything.
Thanks :)