Retirement Life Growth & Income uses a base ETF allocation and dividend stocks to generate a total return for retirement living. This strategy is meant to be used for an entire portfolio.
Our mission with RLGI is to provide equity like total return with less risk than the stock market as a whole.
The Retirement Life Growth & Income will generally have a 20-40% of its positioned similarly to the Global Trends ETF portfolio. This is to offer weighted asset allocation and diversification. It generally skips including broad based market cap weighted ETFs in favor of owning dividend stocks.
Dividend paying stocks make up the majority of RLGI. We may also include companies that we feel have the potential for strategic transactions, such as, mergers and acquisitions. An example of such a non-dividend paying stock we would own is Alphabet (GOOG), which we believe is likely to spin off companies in the coming decade (baby Googles).
Retirement Life Growth & Income Model
Model portfolios are used for basis of comparison. You should not jump straight into a model asset allocation. Always check to see if assets are currently attractive to buy using the “Very Short Lists.”
|Name||Symbol||Position% Size||Position Type|
|Invesco QQQ||(QQQ)||5||Core Diversification|
|ARK Innovation||(ARKK)||5||Tactical Allocation|
|Invesco Solar||(TAN)||3||Tactical Allocation|
|iShares Clean Energy||(ICLN)||3||Tactical Allocation|
|Van Eck Gold Miners||(GDX)||4||Tactical Allocation|
|iShares MSCI Australia||(EWA)||1||Tactical Allocation|
|iShares MSCI Malaysia||(EWM)||1||Tactical Allocation|
|Cisco||(CSCO)||1||Low Vol Dividend|
|Devon Energy||(DVN)||2||Dividend Growth|
|Invesco||(IVZ)||3||Low Vol Dividend|
|Kinder Morgan||(KMI)||3||Low Vol Dividend|
|Newmont Goldcorp||(NEM)||3||Dividend Growth|
|Nutrien||(NTR)||3||Low Vol Dividend|
|Occidental Petroleum||(OXY)||3||Dividend Growth|
|Pioneer Resources||(PXD)||2||Dividend Growth|
|AT&T||(T)||3||Low Vol Dividend|
|Cash & Equivalents||$||50||Tactical|
The general risk level of Retirement Life Growth & Income is intended to be similar to a traditional 80% equity and 20% fixed income investment strategy. Evidence suggests that mix typically has an equity like total return with lower volatility and risk.
In a low interest rate environment, we will typically hold cash in place of bonds. Our main methods to reducing risk are through security selection and asset allocation.
You can choose to have more or less invested to ETFs based on your risk tolerance, comfort levels and goals. Remember, ETFs are very easy to trade, so when looking to reduce equity exposure quickly, those are the best place to start.
If you are a more aggressive investor, then proportionately adjust the asset allocations by deploying more cash into stocks. In general, I always recommend keeping about 5% in cash for flash crashes. Set a bottom fishing price buy GTC limit order on QQQ for that money.
If you are a more conservative investor, use more ETF exposure and increase your cash position to the level you are comfortable with. I do not recommend adjusting equity exposure below 25% unless a crash has already started.
If RLGI is your core portfolio and you want to also own growth stocks from the Sustainable Growth Investing strategy, I strongly suggest having a seperate account. Put into that account the amount of money you are comfortable with having growth stock volatility.
Disclosure: I am/we are long ctl, csco, dvn, eca, ivz, kmi, nem, ntr, oxy, PXD,T. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional Disclosure: I own a Registered Investment Advisor, but publish separately from that entity for self-directed investors. See relevant terms and disclaimers at the website of Bluemound Asset Management, LLC. Any information, opinions, research or thoughts presented are not specific advice as I do not have full knowledge of your circumstances. All investors ought to take special care to consider risk, as all investments carry the potential for loss. Consulting an investment advisor might be in your best interest before proceeding on any trade or investment.