NorthStar Portfolios: A Tactical Approach to Income Investing

Investors seeking steady income while managing risk know that a well-structured portfolio can make all the difference. The key is to follow an asset allocation model while remaining flexible to adjust for changing economic conditions. By carefully selecting income-generating assets and employing tactical shifts, NorthStar looks to create a resilient portfolio that maximizes returns while mitigating risks.

The Role of Cash in an Income Portfolio

In today’s environment, holding a higher cash position is a prudent move. With favorable money market and treasury bills rates, cash and cash equivalents offer a stable income stream while providing flexibility to take advantage of market opportunities. Additionally, a strong cash position helps buffer against volatility, reducing the impact of stock market fluctuations.

Real Estate Investment Trusts (REITs) and Master Limited Partnerships (MLPs): Enhancing Income & Hedging Against Inflation

REITs and MLPs play a vital role in an income portfolio by delivering attractive yields and serving as a hedge against inflation. REITs provide exposure to real estate, an asset class that tends to appreciate in inflationary environments while generating consistent rental income. MLPs, which focus on energy infrastructure and other essential services, offer high dividend yields and benefit from rising commodity prices. Together, these asset classes provide a solid income stream while offering inflation protection.

20-Year Bonds: A Hedge Against Stock Market Risk

Long-term bonds, particularly 20-year Treasuries, serve as a key risk management tool. These bonds typically perform well during periods of stock market stress, offering stability when equities experience downturns. By including 20-year bonds, investors can counterbalance volatility, ensuring that their income portfolio remains resilient during economic uncertainty.

Preferred Stocks of Large Banks: Stability & Attractive Yields

Preferred stocks, especially those issued by well-capitalized banks, present a compelling opportunity for income-focused investors. These securities provide higher yields than common stocks while benefiting from the stability of major financial institutions. With many large banks maintaining strong balance sheets and favorable regulatory oversight, preferred stocks serve as a core source of income with potentially lower volatility than common equities.

NorthStar's Dynamic Approach to Income Investing

By strategically allocating assets and adjusting for economic trends, investors can build an income portfolio that is both resilient and adaptable. NorthStar is available to utilize these strategies for you in both our Private Client portfolio management AND a cash-management account. Contact us to chat about putting these strategies to work for you at nwm.info@nwm.financial.