2 Big Dividends To Buy And Hold Forever

Retirement savings targets have steadily increased—from $500K–$750K in the 1990s to $1M–$2 million today. Yet these figures often ignore key realities: inflation, market volatility, and longer life expectancies. Many retirees now plan for 30+ years of expenses, yet traditional strategies assume steady market growth.

The real risk? A prolonged downturn forcing retirees to sell assets at a loss. That’s why I believe retirement readiness should be measured by cash flow, not portfolio size. If you spend $5,000 a month, steady income of $6,500 from dividends and interest provides security—regardless of market conditions.

At High Dividend Opportunities, we focus on sustainable income through a diversified portfolio of high-yield investments. Let’s explore two of our top picks that offer both reliability and strong yields.

Pick #1: PFFA – Yield 9.6%

For investors looking for a high current yield, relatively predictable income, and attractive prices, preferred equity is a fantastic opportunity with interest rates at 15+ year highs and the outlook being “higher for longer”.

Virtus InfraCap US Preferred Stock ETF (PFFA) is an Exchange-Traded Fund, but happens to be a new breed of "actively managed" ETFs. PFFA's management actively selects investments, determines when to buy or sell, and adjusts trading strategies. The fund also employs moderate leverage, typically ranging from 20-30%, based on what management deems suitable for prevailing market conditions.

PFFA has consistently outperformed its passively managed fixed-income counterparts.

• iShares Preferred and Income Securities ETF (PFF), a more traditional preferred ETF

• iShares iBoxx $ High Yield Corporate Bond ETF (HYG), an ETF that invests in high-yield corporate bonds.

Preferred equity rallied strongly in 2024, but since October 2024, we've seen prices drifting back down due to uncertainty over future rate cuts. The combination of lower prices and a recent distribution hike has caused PFFA's current yield to rise to over 9.6%, paid monthly to shareholders. We are happy to buy more of this sector that is higher up in the capital structure, more insulated from the daily noise that surrounds the global markets.

Pick #2: BIZD – Yield 10.9%

The effects of tariffs on reshoring manufacturing to the U.S. remain untested and unproven. However, some companies may adjust their supply chains, reconsider sourcing strategies, or redirect new investments, potentially creating some level of boost for domestic industrial activity. Companies, specifically small and medium-sized ones will seek capital to make adjustments to their business to capture and grow their footprint. This means that Business Development Companies are likely beneficiaries of the trade war.

VanEck BDC Income ETF (BIZD) operates with $1.5 billion in net assets, maintaining a market-cap weighted portfolio across 28 public BDCs. The broader BDC sector is operating at a lower level of leverage, providing room to scale up should there be a need for increased liquidity in a slowing economy.

BIZD has paid steady quarterly dividends since its inception while maintaining a steady price level over time. The ETF’s current dividend annualizes to a 10.8% yield, higher than historic payout levels.

A weakening economy presents opportunities for BDCs to support small and middle market businesses, while collecting attractive interest income in the process. With BIZD, you buy the haystack and profit from the powerhouses fueling the growth of small businesses, embodying the spirit of the American Dream.

Conclusion

Retirement should be about peace of mind, not financial stress. Rising costs and market swings are inevitable, but a steady income stream can help you stay secure. My income method focuses on consistent cash flow. With the two carefully chosen picks discussed above, a $750,000 portfolio can generate ~$76,500 annually (~6.4K/mo), producing cash flow in excess of the figure discussed in the beginning; all without selling assets or compromising your lifestyle.

It’s time to retire with confidence. A common-sense retirement plan provides certainty, not chaos. You worked hard to earn your portfolio; it's time to let your portfolio work for you. This is the beauty of the income method.

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