What is the best way to increase my high income, large cap growth and risk allocation stocks?
My grandfather created a large cap growth, risk allocation and a high income fund stock accounts for me. I am looking to do something with the stocks to increase the amount but I am very hesitant since it is all I have.
Answers | 5
You have several options to focus on increasing your income without giving up some growth. Before you make a move, consideration regarding the taxability of a move should be considered. A gifted portfolio may have retained the original tax basis of any transferred securities into it.
Assuming you are ready to make a move your age will have an impact on some tools to consider, such as a guaranteed income rider that can be attached to a modern variable annuity contract. The amount of liquidity you need for emergencies and opportunities is also important.
The potential for rising interest rates creates a problem for the traditional income solution which is bonds (the value of bonds decrease when interest rates rise). Alternatives such as senior notes or REITS may be viable depending on your risk and time horizon.
Bottom line, this is not as easy as just buying a CD to create higher income.
I would recommend sitting down with a fee-only advisor locally and having them review your investments.
One thing that is important is ensuring you have a good level of diversification and that it is based on your personal risk tolerance. I know this sounds very generic, but believe me it is one of the most essential things to understand when investing.
A local fee-only advisor should be able to help you identify what your risk tolerance is, map out your financial goals and help you also determine the optimal diversified investment mix in your portfolio.