January maybe coming to a close, but we still have 11 months ahead in the new year. There is still time to set our paths straight and align our portfolios with our long-term financial goals. For me, as an income-focused investor, this is a great time to evaluate opportunities that can deliver reliable income while preserving capital over time.
Using the principles we teach in High Dividend Opportunities, I prioritize building a portfolio that generates steady, livable yields, whose income remains resilient during market fluctuations. Even with you are starting with something like a $100,000 investment, careful planning and selection can set you up for recurring dividends for years.
My goals remain clear:
Generate consistent, recurrent income through diversified investments.
Ensure capital preservation over the long term, even amid short-term market volatility.
Leverage opportunities where the market misjudges a company’s value, capturing higher yields and rewarding patience as these investments mature.
While the journey requires discipline, the result—a stable and growing income stream—makes it worthwhile. In this article, I’ll share two focus areas that can set you on the path toward achieving these objectives in 2025. Let’s dive in.
Focus Area #1: Small Businesses
Small and mid-sized businesses form the heartbeat of the American economy, representing 99.9% of all registered businesses in the country. This represents over 33.2 million companies employing 61.6 million, nearly half of the American private sector workforce. Small enterprises constitute 43.5% of America’s GDP, making them a critical part of the economic ecosystem in the form of suppliers, vendors, employees, partners, and customers of larger corporations.
However, these enterprises can’t easily get loans from banks or private equity firms, nor can they tap into the public markets to issue equity or debt. This puts them at risk of not having essential capital for survival and growth. BDCs, or Business Development Companies were created by an act of the U.S. Congress to provide small and growing companies access to capital.
BIZD – Yield 7.8%
VanEck BDC Income ETF (NYSEARCA:BIZD) is an ETF that holds 28 publicly traded BDCs. BIZD has $1.3 billion in total net assets with its portfolio composition dictated by the market cap of the BDC. The ETF’s top 10 positions represent ~73% of the invested assets, housing the largest public BDCs in the market.
Over the past decade, BIZD has consistently delivered income to shareholders, underscoring the strength of diversification and the vital role middle-market companies play in the U.S. economy. A $10,000 investment in BIZD made ten years ago would have paid you $841.8 annually, reflecting an 8.4% annualized yield.
Today, BIZD offers a 10.6% yield, making it a strong opportunity to collect steady income from the backbone of the American economy.
Focus Area #2: General Market Exposure
In its brief 232 years of existence ... there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America. – Warren Buffett
The U.S. stock market has and will be a tremendous source of wealth for millions of market participants. As such, having exposure to the general market can be incredibly beneficial and doing it right can let you have consistent income too. Let us look at three funds:
Royce Small-Cap Trust (RVT) – Yield 7.8%
Adams Diversified Equity Fund (ADX) – Yield 8.9%
Liberty All-Star Equity (USA) – Yield 9.5%
Three wonderful funds can provide you with a variety of exposure to the market without having to sacrifice your income. All three funds have long track records of providing great income to their holders. They maintain a variable distribution pattern where a set percentage of their NAV is paid out every single quarter. This often leaves them with a large special distribution at the end of the year if the portfolio provides more returns than they've paid out, and also serves as a way to prevent the fund from overpaying and cannibalizing its portfolio if there is NAV drop due to market downturns.
The market has had a fantastic last two years, and we expect that this will continue. We also want to make sure that we have exposure to Value stocks that will benefit from the onshoring of American production driven by tariffs and America-first policies. These funds help give the best of both worlds as far as general market exposure and income production.
Conclusion
Looking ahead into 2025, we see that a focus on income remains a powerful strategy for building financial resilience. By prioritizing consistent, reliable income and a disciplined approach to capital preservation, you can weather market fluctuations and stay aligned with your long-term goals. Moreover, with regular cash inclows into your account, you can position yourself to be a buyer when markets present opportunities.
This article only discusses a few of our favorite picks. At High Dividend Opportunities, we maintain a deeply diversified portfolio of over 45 securities, targeting an overall yield of +9%. The key is to remain focused, patient, and intentional in your choices.
Time is your greatest ally. With discipline, focus, and the right strategies, the decisions you make today can lay the foundation for a lifetime of financial security and freedom.
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