We believe that investing to prepare for retirement and investing in retirement should be kept simple.
The more complicated something is, the more chances there are for mistakes to occur.
“Simplicity is the ultimate sophistication”
– Attributed to Leonardo Da Vinci
Retirement investing is all about creating passive income.
At Sure Dividend, we focus on dividend paying stocks (and closely related REITs, MLPs, and BDCs) to build a growing passive income stream.
The Advantage Of Investing In Stocks
Publicly traded stocks have a host of advantageous wealth-building characteristics:
- Stocks have generated the strongest returns of any major asset class over the long run – and it isn’t close.
- The cost of buying and selling individual securities is incredibly cheap now – and holding stocks after purchasing them is free (free is good).
- The stock market’s combination of transparency (readily available financials) and liquidity reduce uncertainty relative to more opaque and illiquid investments.
But everything has a catch…
The ‘big catch’ of the stock market is the price volatility caused by the market itself being so active.
When you see prices decline quickly, it can be difficult to hold for the long-run.
How To Turn The Big Disadvantage Of Stocks Into A Positive
The big drawback of the stock market is volatility… But that isn’t a real drawback with income investing.
It’s also where being a relatively conservative, long-term investor becomes an advantage.
“When an investor focuses on short-term investments, he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness.”
– Nicholas Nassim Taleb
When your portfolio produces the income you need, if stock prices fall by 10% or even 50% your income doesn’t fall (assuming you are in strong businesses likely to increase their dividend rather than reduce it).
Price declines don’t impact the reason of investing; income.
But price declines do mean that putting new money into the market from any source is invested at more attractive rates.
Note: Sources of funds may be reinvested dividends, transferring funds from overpriced stocks to underpriced stocks, or new savings.
Conservative investors will naturally be drawn to higher quality businesses less likely to reduce their dividend payments during recessions.
And when you invest conservatively for income you get to profit from market volatility by choosing when you buy and sell instead of letting the market dictate your moves.
Picking exactly what to invest in can get complicated, but it doesn’t have to.
On Investing Fees & Individual Security Selection
There are a variety of investing services out there that range in price from asset managers and active mutual funds to investing directly in individual stocks.
The average asset under management fee for financial advisors on a $1,000,000 account is 1.02% (according to AdvisoryHQ).
For a $1,000,000 portfolio, this comes to $10,200 per year that you are paying for investment management. This is money that leaves your account instead of staying invested.
Note: Fees actually go up slightly on a percentage basis for smaller accounts. A $100,000 account’s average asset under management fee is 1.12% as an example.
And this does not include any additional fees from ETFs and/or mutual funds.
The less you pay in investing fees, the more money is left in your investment account to grow and produce income for you. This is another simple concept. The less you pay the more you keep.
This means investing in individual securities. And specifically, income producing securities to generate passive income for investors in retirement or preparing for retirement.
How to find quality individual income securities to invest in is discussed below.
How To Find Quality Income Security Opportunities
There’s no way around it – the most comprehensive way to find quality income dividend stocks and related investment opportunities is to analyze as many candidates as possible.
“The person that turns over the most rocks wins the game. And that’s always been my investing philosophy.”
– Investing legend Peter Lynch
But that level of diligence is both time intensive and difficult…
That’s where the Sure Analysis Research Database comes in. We analyze more than 830 income securities every quarter in Sure Analysis. Our database is focused on dividend and income securities. The vast majority of securities in The Sure Analysis Research Database pay a dividend or distribution.
Our database includes all Dividend Aristocrats (S&P 500 securities with 25+ years of rising dividends), Dividend Kings (50+ years of rising dividend stock), many other dividend growth securities, REITs, MLPs, many securities that pay monthly income, and more.
Note: We continue to increase our database coverage universe.
The securities in the Sure Analysis Research Database are analyzed with metrics that matter so you can compare different income securities to each other. Metrics we use include:
- Dividend Yield
- Fair Value Price
- Dividend Risk Score
- Retirement Suitability Score
- 5 Year Forward Expected Growth Rate
- 5 Year Forward Expected Total Returns
Note: You can see how we calculate these metrics on our Sure Analysis Glossary page. You can also learn more about our investing framework on the Sure Dividend Investing Method page.
Each month we analyze our Top 10 high yield (4%+ yields only) securities in the Sure Retirement Newsletter.
These recommendations are powered by our thorough Sure Analysis Research Database coverage.
The Sure Retirement Newsletter gives you access to our best 4%+ yielding investment ideas each month. It always publishes on the 2nd Sunday of the month.
And the Sure Retirement Newsletter is included in our popular Dividend Pro Plan bundle.
If you would benefit from finding quality income investments to build your retirement or pre-retirement portfolio, then don’t miss this opportunity to start your 7 day free trial of the Dividend Pro Plan. You will instantly receive the newest Sure Retirement Newsletter, and much more, when you start your free trial.
Your free trial of Dividend Pro Plan is covered by our member friendly Golden Rule Commitment terms.
Please email support@suredividend.com if you have any questions. We look forward to hearing from you.