Market Correction Management: Stop The Suffering

Most investors focus exclusively on the market value of their portfolios. With high quality, well diversified, income focused portfolios, market value directional changes are always more of an opportunity than a problem.

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Here’s an illustration of income growth during the 2022 piece of the correction that began in the Fall of 2021 and was still going strong in March 2023. The data is derived from an analysis of 90 different portfolios, with a total market value of just over $40 million. The Total Equity Index line is the average of the three major stock market indices; the columns show the realized base income produced by the portfolios.

As you can see, base income grew each quarter during the year, and nearly $600,000 for the entire year. That’s an income growth for the correction year of nearly 15 percent, and annual income of over 9 percent on working capital (quite a bit higher on mv). The portfolios contain both income focused and equity CEFS.  

Total working capital grew by 7% in 2022.

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Yes, you can do this. or even better with advanced profit taking techniques.

The piece between the dotted lines, and the chart itself, are from my upcoming book “Income Focused Retirement Investing: Financial Independence Safer and Sooner.”

Members of the Financial Independence Safer Using CEFs have participated in the development of this book. Please join us.