10 Wonderful Blue-Chips My Retirement Portfolio Will Be Buying Aggressively During The Next Correction

10 Wonderful Blue-Chips My Retirement Portfolio Will Be Buying Aggressively During The Next Correction

Posted On August 13, 2020 3:46 am

No one knows when the next correction will happen but there is no question one is coming at some point.

“Markets always, without exception, revert to the mean. The only question is the “timing” of the event.” –┬áLance Roberts

I have 10 world-class blue-chips on my retirement portfolio’s correction watchlist that include both

  • 5 safe ultra-yield dividend stocks who average almost 8% yield today (and might yield 9% or 10% in a correction)
  • 5 hyper-growth stocks whose average long-term growth consensus is 25% and whose expected 5-year total returns in a correction could hit 20% CAGR

Rather than curse the current bubble, I’m being disciplined, methodical, and preparing for the potentially sensational buying opportunities that today’s overvaluation is creating in the future when the music finally stops and the current euphoria turns back into short-term market fear.

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About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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  1. Randall August 16, 2020 at 5:25 pm

    You have written in high praise of Enterprise Products Partners (EPD) as an important component of your retirement portfolio. However, it is an MLP and I am under the impression that holding this in an IRA or Roth IRA has complicated tax implications. Am I wrong in this impression and/or how do you address this issue in your retirement portfolio?
    Thanks very much for your thoughts!

    • Dividend Sensei August 25, 2020 at 3:33 am

      It’s not as complicated as most people think. MLPs like EPD generally generate negative UBTI each year.

      If they generate more than $1K in UBTI in any given year, then the previous year’s UBTI losses carry forward and reduce it. If the number is still over $1k then you have to report that to IRS and pay taxes on it.

      In 60 K1s I’ve had over the years, just 3 have ever generated positive UBTI. Normally due to a major asset sale.

      Unless your retirement portfolio is extremely concentrated in EPD you are unlikely to ever have this issue.

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