A Growing Dividend Portfolio That Will Survive Rising Interest Rates

Recently I decided I wanted to come up with a high income, dividend growth portfolio that can survive rising interest rates. Many high income industries have been hit fairly hard over the last year or two from rising interest rates. The damage rising interest rates bring is two-fold for many of these industries- 1) rising interest rates means rising cost of capital due to large amounts of debt that will need to be refinanced at higher rates and 2) people see these high-income names as bond like substitutes, so as the return on basically risk free treasuries rise, the yield demanded by other income sources increases.
While there is no doubt that many high income stocks will struggle with higher interest rates, others will thrive. Times like these allow us opportunities to pick out babies that have been thrown out with the bathwater so to speak. Not every high income name will struggle and having a diversified portfolio can also take care of part of the risk. I've researched stocks in a lot of different industries and I've come up with my favorites. My allocations come from Real Estate Investment Trusts (REITs), Business Development Companies (BDCs), oil and gas, tobacco, healthcare, and tech. There are definitely ways you could diversify even further, but for now I'll just share what I've come up with.

Source: Morningstar
My current allocations are still a little biased toward equity REITs as you can see. While I see most REITs continuing to struggle... Read more