Income & Growth Without High-Yield

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I still get emails and comments about high-yield.

And it still scares people to death.

The investing tropes that are passed down from expert to novice (and novice to novice) are deeply ingrained -- and it's hard to break out.

Further, the stakes are very high.

This is our money we're talking about!

So, it's not about rushing in to do something we don't understand and it's not about risking it all on a Newsletter or YouTube video.

It's perfectly okay to take baby steps.

Or to do a "safer" version.

For example, maybe we want income but are petrified of falling stock charts. We've been trained to only want growth and we're not ready to consider anything else.

At the same time, we see the benefits of getting income through dividends and see the huge problems with paper profits and extended drawdowns.

Again, we can't pay the mortgage unless we sell our winning stocks (yikes) and we can't pay the mortgage at all if our stocks and/or trading systems are going through a long drawdown.

In short, what if we want income...but we want to see the stock charts go up, too?

Is there anything we can do to get that?

Of course.

We can buy lower-yielding stocks, BDCs, REITs, or ETFs.

The low yields come from something other than option premiums, so the instrument has a chance to pay out and go up.

And there are plenty of people on the internet who like this sort of investing.

Today, we'll look at one such portfolio.

In this example, we'll use stocks from Dividend Bull. He doesn't give away his whole portfolio, but this is what I've gleaned from his videos. It's a close approximation (and I've taken out all the silly covered call ETFs -- except for JEPI which is "super safe").

His goal is growth and about an 8-10% yield.

Does it work?

Here are the results since 2021, which includes a Bear Market (and assumes a sample $10k portfolio):

Not too bad. It doesn't beat the market but it does seem to go up and give some growth.

Here is the comparison to SPY in that time:

It had its moments of outperformance, but it can't quite keep up.

Last, here's the income if we reinvested the whole time:

Now that's pretty nice. Income goes up every year (as long as we don't take money out), and by the end of 4 years of patient investing, we'd be sitting at around a 13% yield.

Granted, 2025 looks like it's a bit behind but it should get there in the end.

So, what's in it? Here's what I plugged in:

Could it be better? Of course.

But does it solve the growth and income problem for this particular mindset?

Definitely.

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