Rise of the Aristocrats

Part of my retirement plan was to maintain a 7-year bond ladder. This would throw off predictable low risk income as the third leg of my stool. Over the last two years, though, I have not been able to replace the top of my ladder with reasonable yields due to the Fed's zero interest policy. To reach for yield, I would have had to buy barely or below investment grade junk. As an adaptation to this environment, I created (well, borrowed from other smart people) an income strategy based on dividend aristocrats. It is a rung higher on the risk scale, but also provides some inflation protection that standard bonds don't. In addition, if I can achieve reliable income, I won't be concerned about price fluctuations in the stock prices, just like I don't care much about interest rate fluctuations holding bonds to maturity in a ladder. You still have to monitor, garden, and prune based on performance of the underlying businesses. It's my first big change in strategy in 10 years. We'll see how it works out.