Income Investing Tour - Know Your Options - public and non-traded REITs, muni bonds, private credit

Mar 12, 2024 11:29:18 AM

Income Investing


Who wasn't encouraged to be a well-rounded person? Growing up, you may have played multiple sports, learned a musical instrument, and participated in scouting or volunteer work, all while maintaining an above-average GPA. It was a great way to learn about yourself, and it offered some stability and variety.

Similarly, income-producing investments are an important part of a
well-rounded portfolio. They offer stability, cash flow, and wealth
preservation. When markets get volatile, income investments can offer a
cushion. You wouldn’t rely on capital appreciation alone, especially if you are close to retirement or already retired. Regular dividends from stocks and interest payments from bonds can create a steady income.

When you can balance growth-oriented assets with income-generating
ones, you’ll have a resilient portfolio that can weather market fluctuations
while still getting some returns.

Generating a consistent cash flow from your investments is a goal most
income investors strive for. It also helps your money keep up with inflation.


Here is a simple breakdown of income investing:

  1. Income Producing Assets - income investors typically invest in assets such as bonds, dividend-paying stocks, real estate investment trusts (REITs), certificates of deposit (CDs), and certain types of mutual funds or exchange traded funds (ETFs)- to name a few. Many will pay dividends or interest regularly.
  2. Regular Income - The primary aim of income investing is to generate a steady stream of income from these assets. If you invest in dividend-paying stocks, you’ll receive dividend payments periodically (usually quarterly) based on the number of shares you own. Similarly, bonds pay interest periodically, which provides income to the bondholder.
  3. Risk and Return - Income investments come with varying levels of risk. Generally, higher-risk investments may offer higher potential returns but also come with greater volatility and the possibility of losing money. Lower-risk income investments may offer more stable returns but typically have lower potential returns.
  4. Diversification - Like any investment strategy, diversification is essential in income investing. Spreading your investments across different asset classes and sectors can help in reducing risk. Instead of putting all of your money into one dividend-paying stock, you might invest in a mix of stocks, bonds, and REITs to diversify your income sources.
  5. Reinvestment - Many income investors choose to reinvest the income they receive back into their portfolios to compound their returns over time. This can accelerate the growth of your investment over the long term.

Balance opportunity and risk through time-tested principles - read more.

So, what are income-producing investments?

  • Dividend Paying Stocks - Companies that consistently pay dividends can be attractive for income investors. Look for companies with a history of stable or growing dividends, strong financials, and a
    sustainable business model.
  • Bonds - Bonds are debt securities issued by governments, municipalities, or corporations. They typically pay interest until maturity, at which point the principal is repaid. Bonds vary in risk, with government bonds generally considered safer than corporate bonds. There are interest rate risks - the market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall, and bond values move down when rates rise. There is also default risk if the company fails to make good on its promise to make the principal and interest payments, potentially leaving you with nothing on the investment. To lower default risk, investors can select high-quality bonds from large, reputable companies or buy funds that invest in a diversified portfolio of bonds.
  • Real Estate Investment Trusts (REITs) - REITs are companies that own, operate, or finance income-producing real estate across a range of property sectors. They often distribute a significant portion of their income to shareholders in the form of dividends, making them attractive for income investors seeking exposure to real estate. Their structure requires distribution of at least 90% of taxable income to shareholders. Their relationship with commercial real estate has been historically steady, thanks to rental income. This has changed since COVID-19, and with stricter regulations in the banking sector, there may be new opportunities with Private Credit for CRE.


  • Preferred Stocks - Preferred stocks are hybrid securities with characteristics of both stocks and bonds. They typically offer higher yields than common stocks and have a fixed dividend payment. Preferred shareholders have priority over common shareholders in receiving dividends and assets in the event of liquidation.
  • Master Limited Partnerships (MLPs) - MLPs are publicly traded partnerships that operate in the energy, natural resources, or real estate sectors. They often generate stable income through the transportation, processing, or storage of commodities like oil, natural gas, or minerals. MLPs typically distribute a significant portion of their income to investors in the form of distributions.
  • High-Yield Savings Accounts and CDs - While not typically considered an investment- or as high-yielding as other investments, savings accounts and CDs (Certificates of Deposit) can provide a safe and predictable income stream. These accounts are offered by banks and credit unions, providing interest payments on deposited funds. They are FDIC-insured but rely upon interest rates to be an attractive option as inflation can erode your purchasing power.

Overall, income investing is a great way to supplement an existing income or bolster a retirement fund. As always, it is essential to understand your risk tolerance, investment goals, and time horizon before implementing ANY investment strategy. Learn more about income investing and other strategies by speaking with a trusted manager.

Vineyard Global Advisors offers 12 fee-only, actively managed,
including hedged and long-only investment strategies via
separately managed accounts.

These include Income Strategies that seek to provide attractive
risk-adjusted returns:
Russell 3000 Enhanced Dividend
Dynamic Yield
Risk Managed Income

Learn more about the advantages of Separately Managed Accounts that

  • Customized investment portfolios
  • Tax smart planning
  • Insight and transparency
  • Professional management
  • Risk-managed diversity

“The way risk is handled can have a
substantial impact on an
investor’s ultimate success. Our approach
for all Vineyard strategies involves
applying layers of protection as needed in
response to changing market conditions,
with the goal of providing the most
protection during times of significant
market deterioration.”
Vineyard Global Advisors-Our philosophy


View Our Strategies Contact Us Today

Investment advisory services are provided through Integrated Advisors Network, LLC (“Integrated”) a registered investment advisor. Registration does not imply a certain level of skill or training. Vineyard Global Advisors, LLC is a practice group of Integrated.

The opinions expressed herein are those of Vineyard Global Advisors and are subject to change without notice. This material is not financial advice or an offer to sell any product. Forward-looking statements cannot be guaranteed. This document may contain certain information that constitutes “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology. No assurance, representation, or warranty is made by any person that any of Vineyard’s assumptions, expectations, objectives, and/or goals will be achieved. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. Vineyard Global Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investment advisory services offered through Integrated Advisors Network, LLC (“Integrated), a registered investment advisor. Vineyard Global Advisors is a DBA of Integrated.

Investors cannot invest directly in an index.

There is no guarantee that the investment objectives will be achieved. Moreover, past performance is not a guarantee or indicator of future results. Does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations.

Integrated is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Business is only transacted in states in which it is property registered or is excluded or exempted from registration. A copy of Integrated's and VGA's current written disclosure brochure filed with the SEC which discusses among other things, business practices, services and fees, is available through the SEC's website at:

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