Retirement Portfolio Update: Risks, Opportunities, And Best Buys Today
Here at High Yield Landlord, we care deeply about our retirees and conservative income investors.
We want to serve you well and help you reach your financial goals as effectively as possible.
That is exactly why we created the Retirement Portfolio.
It sometimes seems that the Core and International Portfolios get more of our attention, which is understandable given their broader opportunity set and often more dynamic developments. But the Retirement Portfolio remains very important to us, and for that reason, I wanted to write an article sharing some thoughts on it from a few different angles.
As a reminder, the Retirement Portfolio aims to maximize safe income by focusing on high-yielding, lower-risk opportunities. It is centered on larger, well-capitalized blue-chip REITs trading below NAV and also selectively includes preferred shares to enhance yield.
The objective of the Retirement Portfolio is to maximize safe long-term income rather than total return performance. Whether income is used for reinvestment or to fund living expenses, we take seriously the desire for a reliable and consistent income stream. Therefore, our focus in this portfolio is on generating high, safe, predictable, and growing dividend income.
Overall, the Retirement Portfolio has accomplished this goal pretty well, but we acknowledge that some of our picks have missed the mark in the past.
We know how frustrating dividend cuts can be, especially for retirees who rely on the income for living expenses, but eliminating all risks in investing is not possible, and often, these dividend reductions are a surprise even to us.
For example, no one predicted that W.P Carey (WPC) would choose to spin off its office properties all at once (rather than selling them slowly over time). This pulled forward a lot of future pain and necessitated a 25% dividend cut that surprised and embittered lots of shareholders, including us.
However, as we’ve explained in the past, we are ultimately supportive of management’s decision to rip the band-aid off quickly instead of slowly. The portfolio and balance sheet improved dramatically, and the dividend reduction ultimately made the dividend stronger by lowering the payout ratio.
That is why we kept WPC as our largest position in the Retirement Portfolio, and we are glad that we did, as it has strongly recovered since then:
Going forward, we are renewing our efforts to provide as much value to our retirees and income investors as possible.
That’s the purpose of this update, in which we will go over our current Retirement Portfolio before briefly discussing our preferred stock holdings, some risks we are monitoring, potential portfolio additions, and the best buys today within the portfolio.
Portfolio Overview
Our Retirement Portfolio is heavily weighted toward large-cap REITs with long track records, skilled management teams, and strong balance sheets.
All common stock holdings in the portfolio boast investment-grade credit ratings.
Roughly 3/4ths of the portfolio is invested in common equity shares, while 1/4th is currently invested in preferred stocks.
To quote our recent Q1 2026 Portfolio Review:
“The blue-chip REITs offer consistent dividend growth and help preserve purchasing power over time, while the preferred shares enhance the portfolio’s yield and reduce volatility. Combined, they provide an optimal mix of income, growth, and downside protection.”
Here’s an overview of the portfolio organized by position weighting, ascending from largest to smallest holding.
