About Conservative Income Investing
According to a recent Barron's article, "If you put all your money in the S&P 500, you made 15.1% in the 10-year period
ending Dec. 31, 2010. If you had put 50% in the S&P 500 and 50% in the US Aggregate Bond Index, you would have made 48.9% over
that same 10-year period. Now, if instead of putting 50% in the S&P 500 you chose a diversified portfolio of large value and
growth, mid-value and growth, small companies, international, emerging markets, all that, then walked away . . . you would
have made 72.2%. If you had reallocated at the beginning of every year, your return would have been 82.6%. So, in a decade
where the market basically did nothing, a diversified conservative portfolio that was rebalanced annually would have made
This is a more "modern" example, but the same pattern holds true: according to Professor Jeremy Siegel at The Wharton School,
until the early 1990's, roughly three quarters of the real return from the stock market came from its dividend history, and
the other one quarter from capital gains.
The Portfolio Strategy
The Retiree Income Portfolio is geared for the individual in retirement or approaching
retirement. It is designed to be a portfolio that needs minimal attention and rebalancing. It has a heavy
focus on income and dividends, especially monthly and quarterly income. The Retiree Income
Portfolio is designed to replicate moderate risk of the Balanced Total Return Funds of the past and the Asset
Allocation Funds of the present, but with a dividend yield 100-200% greater. It is expected that the income yield of the
portfolio will be 200% greater than the S&P 500 with a market risk (beta) of approximately 0.5 or 50% of the S&P 500.
The Retiree Income Portfolio will utilize a mix of dividend-paying stocks and bond funds to
acheive a conservative mix of securities suitable for most income-oriented investors. The sectors this portfolio will focus
on include Agency Mortgate REITs, Master Limited Partnerships (MLPs), ex-Canadian Royalty Trusts (CRTs), Business Development
Companies (BDCs), blue chip energy companies and consumer staples.
The creator and proprietor of the Cash Flow Replacement Ratio used in retirement and investment planning, Frank
M. Bifulco is a Chartered Financial Analyst and Certified Financial Planner who has spent over two decades managing high-net
worth individual and institutional accounts. In addition to his various certifications, Mr. Bifulco has passed all exams
pertaining to the Series 7, 63, and 65 exams on his initial attempts. His commentaries and investment analysis have appeared
on CNBC and Bloomberg Television, as well as print journals such as Forbes.com, TheStreet.com, RealMoney.com, and
The Retiree Income Portfolio makes retirement investing easier to manage with its
conservative, income-oriented approach and at just $29.99/month, more dividends end up in your pocket!
The analysis and information in this report and on our website is for informational purposes only. No part of the
material presented in this model portfolio and/or report or on our websites is intended as an investment recommendation or
investment advice. Neither the information nor any opinion expressed nor any Model Portfolio constitutes a solicitation to
purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the PUBLISHERS
contributing to Portfolio Channel and may not actually come to pass. The opinions and viewpoints regarding the future of the
markets should not be construed as recommendations of any specific security nor specific investment advice. Investors should
always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any
security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come
to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their
affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided ''as is'' without warranty of any
kind, either expressed or implied. Although the information contained is derived from sources which are believed to be
reliable, they cannot be guaranteed.
The information contained in the Model Portfolios is provided by Frank Bifulco. Employees and affiliates of Frank Bifulco may
at times have positions in the securities referred to and may make purchases or sales of these securities while publications
are in circulation. Frank will indicate whether he has a position in stocks or other securities mentioned in any publication.
The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Index returns are price only and do not include the reinvestment of dividends. The S&P 500 is a stock market index containing
the stocks of 500 large-cap corporations, most of which are US companies. The index is the most notable of the many indices
owned and maintained by Standard & Poor's, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but
also to the 500 companies that have their common stock included in the index.
All returns assume reinvestment of dividends unless otherwise indicated. Investments in equities carry an inherent element of
risk including the potential for significant loss of principal. Past performance is not an indication of future results.