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Income

varmint
in Fund Discussions
I have $300k to invest for generating income. The money will be income invested for 3 years and at that point pension kicks in so the money can be reinvested less for income and more for growth at that time. I was looking at TRPrice Spectrum Income as a convenient income vehicle with some diversification of income sources. I am open to other suggestions and possibilities of mutual funds or even ETFs, individual securities. Any comments are welcome and appreciated.

Comments

  • scott
    Risk tolerance? Personally, the first thing that comes to mind are the CHS preferreds, which come in a number of different flavors. Those were quite stable in 2008. Again though, all depends on what you're looking for.
  • Edmond
    My mind too went straight to preferreds (individual or CEFs of pfds).
    dividendyieldhunter.com does a nice job of presenting sundry lists of pfds. Quantumonline.com is great for researching them. -- Generally pfds from C-corps (i.e. NOT REITS) receive the qualified divd taxation rate (if your monies are taxable).

    You might google "Richard lehman Forbes" -- to pick up some prior recos on income ideas too.

    In a "lower, longer" rate environment, where the threat of inflation is meager, some of these preferred yields are pretty good. Some even offer "fixed-to-floating" options.

    The big US banks (now well-capitalized) seem like a safe bet. BOA, Wells, COF, JPM all have any number of pfd offerings.


    Just my opinion.
  • hank
    edited September 2015
    RPSIX is a fine fund. I keep a modest allocation in it - which replaced a similar allocation I kept in high yield bonds at an earlier stage of investing. The .67% ER Price lists on its website is a trite higher than I'd have guessed. It is, of course, based on the cost of the underlying funds, some of which have expenses in the 1% range.

    When I want a "best guess" estimate how a find might perform over near-term time horizons, I look at Fund Max. Their calls aren't always right, but are interesting. For PRSIX they see a worst case of -15% over the next year and a best case of +11%. I'd say they are close - but erring on the cautious side. Keep in mind these are Best and Worst Case projections. Neither seems likely. (And I'll take exception to their overall score of "70". It's a better fund than that.) http://www.maxfunds.com/funds/data.php?ticker=RPSIX&pg=d

    Price lists the fund's holdings in its annual and semi-annual reports available for download at T. Rowe. Notable are a potential weighting of as much as 25% in PRFDX (an equity fund) as well as substantial allocations to high yield and EM bond funds. Likely, it's these rather aggressive holdings which Fund Max thinks could pull the fund down in some sort of worst-case financial environment.
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