For years (going back to at least 2013) I have posted model portfolios simply to see what happens to various quality portfolios of income securities over long periods of time–by long periods of time I mean 5 or 10 years.
I started the initial portfolios back in 2013 (I think) and kept tracks of a number of them until 2 years ago and then lost track of them as they were part of the original ‘Yield Hunter’ website which was sold about 5 years ago.
I always set these up to be ‘held’ – not traded – really ‘buy and hold’. I really wanted to see the results from portfolios that were held through thick and thin–through the big ups and downs. I know I had an ‘investment grade’ portfolio, another was ‘short duration’ and I think another was ‘high yield’.
So with the Innovative Income Investor I did the same–set up a couple of portfolios. 1 is ‘High Yield‘ which is all preferreds and baby bonds. I chose issues that at the time of initiation were high yield issues I would be comfortable holding–and in fact I did hold many of them at various times.
The issues in the High Yield Model were mREITs, many energy related issues (midstream, shipping, LNG etc) and some financial issues (BDCs, asset managers etc).
On the portfolio page I make short notes to look at as time goes by. I see the original goal on 1/25/2018 for the annual return was 8.25% and then I see on 9/30/2019 I lowered the goal to a more realistic goal of 7.50% given the direction of interest rates.
On 3/19/2020 I wrote that the model was down 43% earlier in the week. and on 8/20/20 I wrote that the model was up 7.75% since inception.
Currently–just adding in recent dividends the model is up 18.83% with a month to go until the 3rd anniversary–so let’s say the model is likely to end around 19.50% for the 1st 3 years–an average of 6.5%/year.
And that is how a blind monkey earns a pretty good return without babysitting their pretty junky portfolio.
PS–no blind monkeys were actually used for this model–nor were any monkeys with sight.