Getting A Little Too Exciting? Read On!
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In Praise of Boring People (and Investing)
by Mark Bloom, Cestrian Capital Research, Inc
Most people go through normal cycles in their lives. In one’s twenties it’s clubs, bars and other social activities; in the thirties and forties it’s couples, kids, house prices, work; and when in one’s sixties and seventies, my current cohort, it’s grandkids, cruises and medical procedures. Something for younger people to look forward to!
Investing also falls into cycles. Young investors have a large supply of both human and temporal capital, and they can use those to hedge against taking more risk in their investments; the long time frame lets one swing for the fences. But as one gets older the time frame shortens, so it gets harder to make up for strikeouts. In my view smart investors adjust their approach and work to reduce risk in their later decades.
Which brings up the idea of being boring. I recently had my annual checkup, and it was boring—which, for a 70 year old, is thrilling. Nothing at all wrong, so medically boring—perfect! I’m grateful to be so boring, in this way, anyway.
Boring is desirable in many fields. Take Polar exploration. Do you want to be on the doomed Scott expedition to the South Pole, or with Amundsen, the calm, matter of fact Norwegian, who planned everything out exactly and brought himself and all his men back safely? I’m sure the Scott party had far more “interesting” stories, but none made it back to tell them. I’ll take the boring, no-stories-to-tell- trip myself!
That’s how I approach my investing now. With no human capital left (I’m retired), and far less of a time frame, I focus on capital preservation and risk management. I now run a “quieter” portfolio than I used to—far less high-beta stuff than I had when in my thirties, and far more income-generating holdings. If I can earn a “boring” 10% return every year on average I will do just fine, so that’s my goal.
Investing like this is well-matched to one’s views on life in general. When young most of us have hopes and dreams for the future; and what is equity investing but just that, a hope that a company will dominate its field and grow to be the size of Nvidia or Microsoft? If Microsoft could do it why not my company x? But fixed income investing is more hard-headed: I’ll lend you money at x percentage, and you HAVE to pay me back with interest; no dream there! So the only risk in fixed income is defaults, and even in those cases there’s usually some recovery of assets. So simply put, equity investing may or may not work out, but fixed income almost always does over time—just at a lower expected return compared to the “fun”, big-up years.
The tradeoff, of course, is that one gives up the chance for home runs—no doubling your money in one year! Which gets back to the “boring” concept. I’m willing to give up on flashy gains if I can collect solid, dividend-based returns instead. As a side benefit I get to spend far less time watching a screen than if I was managing a high-beta group of stocks. Which for me is a different kind of “boring”, the bad, dull kind.
This approach can also work for younger investors that want to have some portfolio ballast to balance their equity holdings. 20-30% in income investments will provide some comfort when the markets go red; it’s a lot easier to deal with market downturns when you know you’re getting a steady dividend stream while you get through the price drops. And of course income investing is the staple for older, retired investors who need the monthly and quarterly “paycheck” that dividends provide.
All that is great, but how does one successfully invest for dividend income? There are many different approaches. Maybe the simplest way is to just buy a general dividend stock ETF like $SCHD or $VYM or any number of bond funds and forget about them—you’ll get a sleeve of the biggest and safest dividend payers, but unfortunately you won’t get much in the way of yield. A different way, and the one that works for me, is to find good managers of bundles of loans, since that is all BDCs, mREITS, CLO CEFs and bond ETFs are, and build a balanced portfolio of high-yield payers, trying to capture a good return without taking on more risk than is necessary. Then sit back, collect dividends, and keep an eye on things; when prices get too frothy trim or exit positions and perhaps move up the quality ladder, and when things go on sale start new positions or add to existing ones. The difference is that with dividend investing there’s a lot more calm periods and a lot less running around buying and selling.
That’s all I try to do in my investment service, Convivo Income Opportunities. Nothing fancy; I’m just a normal investor running my own money. A quiet portfolio like mine looks rather “boring” when the market is making new daily highs, but it will seem pretty attractive if and when things take a different direction. If you’re someone who wants more “boring” in your investment life maybe Convivo is right for you.
You can sign up for Convivo Income Opportunities at the low launch price of just $1499/yr (independent investors) or $2999/yr (investment professionals). Monthly subscriptions are also available.
You can learn more right here:
Alex King
Cestrian Capital Research, Inc - 5 Jan 2026