The Financial Independence, Retire Early (FIRE) movement continues to grow during a global coronavirus pandemic and a season of unparalleled market volatility in the midst of a contentious trade war that is provoking ongoing geopolitical tension.
Early retiree hopefuls who are interested in steady returns and predictable yields should consider a balance of high quality and high yielding bonds, laddered over an intermediate duration paired with dividend paying utility stocks. The laddered bond strategy will give you control over the price you pay and the price you receive when you sell as well as over the yield and coupon your portfolio earns. Collecting regularly paid dividends from utility companies during periods of interim share price movements are appreciated in every economic cycle and are a sustaining hedge against the trade tariffs imposed by the current administration.
A case can also be made for owning commercial real estate in your retirement account. Be selective here and use diligence to determine whether the underlying properties carry below average debt and maintain high liquidity. These are helpful attributes during seasons of price fluctuation in real estate.
These cash flow-oriented asset classes traditionally reduce exposure to volatility compared to the broad market. They also provide a handsome income stream which is especially welcome when navigating your portfolio through an economic recessionary transition.
If you’re interested in adding growth-oriented strategies that will participate in market trends which have been accelerated by Covid-19, consider investing in health care and life sciences as interests in human flourishing have made an uptick prompted by the pandemic. Also, be sure to maintain a position in information technology as the new normal prescribes the IT sector to remain an essential business for the foreseeable future.
Anthony Montenegro has been featured in: Forbes, CNBC, The Huffington Post, U.S. News and World Report, MSN Money, USA Today, and Yahoo Finance!