Retirement: The Safest High Yield In 2020

Published Sat, 23 May 2020 09:00:00 -0400 on Seeking Alpha

Retirees and other income investors have suffered large losses over the past few months.
MLPs, BDCs, mREITs, CEFs and other high-yielding asset classes are down very significantly.
Our Retirement Portfolio aims to generate maximum safe income by investing in blue-chip common shares, preferred shares, and property backed loans.
Over the past decade, retirees and other income investors have been pushed out of Treasuries due to insufficient yields. For most of the 2010-2020 period, interest rates were hovering around 1%-3%, which after inflation and taxes, isn’t sustainable for most retirees:
Data by YChartsIt forced retirees to invest into higher-yielding instruments that carry greater risks. Good examples include MLPs, BDCs, utilities, and REITs.
Unfortunately, those were some of the worst performers in the last market crash:
MLPs (AMLP) are down 42%. BDCs (BIZD) are down 36%. Utilities (XLU) are down 21%. mREITs (REM) are down 57%. eREITs (VNQ) are down 29%. Data by YChartsA lot of dividend cuts already have been announced. More will follow. And unfortunately, some of these higher-yielding companies may never recover.
Think for instance about lower quality mall REITs, which are closed down and quickly losing market share to Amazon (AMZN). Maybe they will recover, but "maybe" is not good enough for retirees who rely on steady income to fuel their retirement.
We believe that most of these higher-yielding companies are uninvestable for retirees in this uncertain environment. Risks are high and you need to be more selective than ever before to sustain maximum income in this crisis.
You shouldn’t shy away from taking risks, but these risks should be carefully vetted and diversified with other income sources. At High Yield Landlord, common equity investments such as REITs are just one component of our Retirement Portfolio.
Below we discuss the three core asset classes that allow us to generate safe maximum yield in retirement:
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