aluxum While I have written a lot about high-yield investing covering many value plays, I have not elaborated so much on the portfolio construction, my investing objectives, and strategy. So, the goal of this article is to elaborate on 3 specific aspects that characterize my overall investment allocation process, where, hopefully, some of this will seem interesting and beneficial in the context of your investment approach: What are the objectives? What asset classes fulfill these objectives? What is the key risk? Let's now dissect each of these themes separately. 1.
The objectives The overarching objective is to retire early (in ~ 10 years) before the official State pension kicks in without sacrificing the living standards and without being forced to tap into portfolio holdings to fund the retirement. While I live in a European country and have an official job, where consistent contributions to a defined benefit plan are made, I leave the potential income streams from this component out of the "retirement" equation. In other words, I consider this a favorable optionality that could at some point in time complement the income streams coming from my core retirement portfolio.
It is also critical to have the retirement income correlated to the inflation dynamics so that the living standards can be maintained over the long run. Otherwise, income growth is welcomed but not as important as having maximum yield stability and predictability. All in all, it boils down to determining m.