A Portfolio Designed for Reliable Cash Flows and Capital Preservation
The Income Stability Stream portfolio is designed to generate regular cash flows by investing in assets such as bonds, treasuries, real estate, and dividend-paying stocks, often using ETFs and mutual funds that focus on these types of assets. While this portfolio may not provide as much growth potential as a portfolio focused on capital appreciation, it can provide a steady stream of income, making it useful for retirees or investors seeking a reliable source of cash flow, with income generated by this type of portfolio fluctuating depending on the underlying assets performance and interest rate changes.
The main decision behind where to invest within the portfolio comes from analyzing 3 components. First we look at whether interest rates are rising, falling, or staying within a range. We include different parts of the bond market in order to stay well diversified and the weighting is determined by interest rates. Next we look at yield-to-duration scores. Third we look at including dividends and real estate.
Each part will be explained, the goal is to try and protect the value of your investment as much as possible, capital preservation, while still providing the highest income possible. Balancing the two can be tricky, but our main goal is to stick the right balance and that is how we arrived at the name Income Stability Stream.
Let's take a closer look to see how we do it.
