"Based on current market prices and dividend yields, this portfolio generates approximately $77,500 annually at a 3.1% weighted average yield. Johnson & Johnson yields 2.31%, Microsoft 0.74%, Procter & Gamble 2.85%, Coca-Cola 2.86%, and Verizon 6.92%. That falls short of the $100,000 a 4% withdrawal rate would provide and misses the growth component that's driven wealth creation over the past decade."
"At 70, this investor likely has a 20-year time horizon, possibly longer. The traditional "age in bonds" rule would suggest 70% bonds and 30% stocks. This portfolio is 100% equities, which sounds aggressive until you realize four of the five holdings have beta s below 0.40 (JNJ 0.33, PG 0.39, KO 0.39, VZ 0.33), meaning they're significantly less volatile than the market."
A 70-year-old investor holds $2.5 million concentrated in five blue-chip dividend payers: Johnson & Johnson, Microsoft, Procter & Gamble, Coca-Cola, and Verizon. The portfolio yields roughly 3.1%, producing about $77,500 annually, which is below a 4% withdrawal target of $100,000. Ten-year returns show wide dispersion: Microsoft surged dramatically while the other names delivered modest to strong returns and the S&P 500 rose 253%. An equal-weighted mix of the five would have grown about 285% over ten years, driven mainly by Microsoft. A 20-year time horizon and traditional age-in-bonds guidance suggest reassessing allocation and growth exposure.
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