Retire In Peace (RIP) Portfolio Update
This is another post in a continuing series as I evolve toward Bruce Millerís Income-Only portfolio. The strategy was adapted in an attempt to reduce trading and promote safer and more durable income oriented holdings. The RIP portfolio is part of a larger strategy which includes real estate (the physical kind) and a separate account dedicated to TAA (not discussed in this post).
This post covers our 4 accounts following Millerís strategy (with some legacy & spec positions). Separate posts cover Millerís screening methodology and results:
See my last post to pick up the Bruce Miller thread: (https://www.valueforum.com/forums/show.mpl?keywords=1478033257.8.765&so=201611)
Go to this link (https://www.valueforum.com/forums/show.mpl?keywords=1462315789.9.686&so=201605) to see a summary of Millerís methodology.
The RIP screening spreadsheet has undergone some minor changes to gracefully handle missing Morningstar data. I have played with Income Risk Group classifications and finally have things where I think they belong. Note that exact categorization isnít all that important except as a way to enforce diversification. Some stuff defies classification, such as DIV, SDIV, GDV-PG, SHAIX and THQ - so they end up in the ďOtherĒ group. I lumped all the Hybrid mREITS into the REITProperty group and AgREITs under FinBank.
Changes since my last Miller post:
Positions Initiated or Added
Positions Closed or Reduced
Added to CMOpE @ 24.50
Closed short TSLA 12/16 $170 Puts (profitably)
Added to DX @ 6.50
Initiated Short GBT 15.00 12/15 Puts @ 2.00 during selloff when ASH abstracts released
Added to NRZ @ 14.50
Added to CYSpB @ 23.30, 22.98, 22.93
This table shows exactly where current positions lie within Millerís Income Groups (top portion of the table) and also shows legacy, speculative and trading positions (bottom portion) which are in the accounts, but not part of Millerís strategy. Holdings are spread between 2 taxable and 2 Roth accounts which explains why you may see a ticker more than once. Green Potential tickers are stocks I am watching and thinking about (this could include common or preferred positions).
We remain overweight in the MLPMid Group because I expect this sector to gradually grow as energy markets stabilize. Most holdings were purchased long before I had heard of Miller and would not meet his criteria, but I plan to hold these legacies because they either continue to pay distributions or I have some small hope of recovery. (In other words, I overpaid)
These accounts are not 100% into Millerís strategy. I continue to write deep OTM puts and occasional covered calls to generate cash or to get rid of stuff I am not comfortable with (GLOP).
In short, Millerís strategy has given us some much needed structure and discipline. The 4 accounts now generate enough income to support our retirement, with some leftover to slowly increase the nest egg. We have 16.6% cash and are adding as opportunities arise, which isnít very often.
I plan to re-run Millerís screens for each of the 19 income groups during the next month and will post this separately.
In other news: I finally found a golf coach who knew how to teach newbies. Broke 100 for the first time the other day, a round with 3 pars (including one near-miss birdie on a par 4!). Thatís a nearly 50% improvement. The other pros kept trying to video my swing to show me what I was doing wrong. The translation from watching to executing did not work for me. Iím getting to the point that I almost like the game.