Current times are among the most challenging for creating a retirement portfolio or ensuring that retirees get positive returns (adjusted for inflation). Even with aggressive contractionary monetary policies, inflation has remained stubbornly high in the United States. In the current scenario, individuals will witness erosion of purchasing power by investing in risk-free assets.
It’s essential to invest in stocks. However, it would be equally suicidal to go significantly overweight on high-beta stocks or growth stocks. A good idea is to invest in high-yield dividend stocks for retirees.
Even amidst challenging macro-economic conditions, there is some good news for investors. High-yield dividend stocks for retirees are also trading at attractive valuations. Besides regular cash flows, I expect capital gains from these high-yield dividend stocks. This will help in beating inflation and increasing the purchasing power of a retirement portfolio.
This post appeared at Dividend Stocks Research.