Portfolio is just a common way of talking about all the investments you own, so an income investment portfolio is just all the income investments you're invested in.
Sometimes I refer to your retirement portfolio. Generally, I think people should invest only for retirement.
Retirement is Your Longest Run Investing Goal
That just means that investing should be a long-term activity. When you put away money for a relatively short time, such as under ten years, you should save it, not invest it.
By that I mean you should leave it someplace safe that pays a small amount of interest, such as a passbook savings account, a certificate of deposit or a money market account.
I realize that people tend to refer to such money as "investing," and this can be confusing. However, money you plan to use in less than ten years should not be put into stocks, because they may be lower and you can lose money.
Heck, the Dow is now where it first was in the spring of 1999, so you'd have lost money for the past eleven and a half years.
If You're Saving for a Goal Under Ten Years, Stay Out of Stocks and Bonds
Some people think they can make a killing in just ten years, but trying to do so is risky. You may as well take your money to Las Vegas. At least you'll have fun while you're losing it. And there's an outside chance you'll return home with more than you started.
If you have a child under the age of eight and you wish to start saving up for their college education, it's a good idea to start. Do check out 529 plans. If you have over ten years before you'll need to write a tuition check, you can consider putting some of it into the stock market, but not all of it.
Even then, I can't advise investing in bonds, because they have a twenty year maturity and there's no long-term trend (as there is with stocks) toward their growing more valuable with age. Stick with a short term bond fund. You can lose some money with them, because of interest rate volatility, but not a lot.
You Start Out Small, But Do Start Out
In general, an income investment portfolio should be as diversified as possible, but you shouldn't let that stop you from starting out.
If you have a small amount of money to begin with (and that's where we all start if we weren't born wealthy), then buy just one dividend paying stock.
Open an account with a deep discount brokerage and buy 100 shares of a stock on the Mergent Dividend Achievers Index. If you can't afford that, open up a Dividend Re-Investing Plan at a large company on the Mergent Dividend Achievers Index. Some can be started for as little as $25. They'll automatically reinvest the dividends you're paid.
It may not seem like a lot now, but it can be the beginning of a large fortune. The more you continue to invest, the more you continue to reinvest your investing income, and the longer you continue, the more money you'll have when you retire.
Your Portfolio Starts Small, Then Grows Bigger as It Rolls Downhill
Ideally, an income investor's portfolio would include all kinds of stocks that pay high dividends and regularly raise them (consumer brand names, utilities, Real Estate Investment Trusts and Master Limited Partnerships) and all kinds of bonds (Treasuries, corporate, municipal, and Treasury Inflation Protection Securities) -- in both your native country and around the world.
However, any income investment plan is better than not investing for income at all.
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