Franklin Income Fund (FKINX)

I mean its nice that its got a 5.84% yield but it has a .64% annual fee so a final yield of 5.2% is nice but here's my question why not just get a list of the top holdings and just buy those and save the fee?

I mean if he's seeking high yields why not buy a basket of MLP's that he will basically earn a tax free dividend on if he doesnt sell till he dies

A basket of KMP,LINE,EPD those are some of the top high yield MLP's and throw in some high yield dividend stocks like MO,PM,CVX,INTC,MSFT

All those have a yield over 3.3% and the MLP's are 5.5-8% mostly. Those yields are pretty safe and grow and you don't pay the management fee. I know the fee doesn't sound high, but man if you have a $3M nest egg which isn't too crazy for someone who say earned $100K+ and invested for many years you're looking at .64% of $3M coming in at $20k/year

A basket of solid dividend yielders would do the trick without the fee.......as for the safety of the dividend thats on you to read the balance sheets, check the payout ratios,etc but you can use dividata.com so see how long these companies have paid dividends. I own all the ones I listed and personally would never own a mutual fund or ETF but thats just me. I don't wanna pay $10K+ annually in management fees on my portfolio.

I don't really like that the top 10 holdings of that fund are all up huge this year, but then again most stocks are up big time haha.If I ever did have to buy a fund the one you listed sounds great fwiw. I also like the companies in QQQ. Congrats to your dad on retiring, im jealous!

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However, the fund can be volatile for a retiree because it's investing primarily in stocks and junk bonds

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The advisor told him it usually trades between 1.50-2.30. Kind of scary that it is above that now, but he should be able to live off the dividends for a while.

Thanks for the advice all!

ETA: I believe he will be reinvesting the divi's for about a year, then aim to live off of them until SS, etc...

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The advisor told him it usually trades between 1.50-2.30. Kind of scary that it is above that now, but he should be able to live off the dividends for a while.

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If he would be happy with a fund that declined 47.3% from 5/2007 to 2/2009 tell him to go for it. I suppose if the distributions remained relatively stable that would be one thing, but I don't think many retirees would be sleeping well with a large investment in that fund. Junk bonds and almost 30% allocation to the utilities sector. If I were taking that much risk I would be seeking much better upside longer term.

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I mean its nice that its got a 5.84% yield but it has a .64% annual fee so a final yield of 5.2% is nice but here's my question why not just get a list of the top holdings and just buy those and save the fee?

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That's basically every mutual fund ever.

You are paying for convinance and "expert" opinion on when and where to divest in holdings and where to put them as time goes on.

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maatthew25 and tirebiter, anything you two would recommend looking into?

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Whatever he does he shouldn't go all in on one thing if he is not well informed. Have no idea as to his assets and comfort with volatility. Numbers show that 20% equity added to fixed income improves long term returns and IMO unless someone has more money than they can spend over the rest of their estimated life then they should have some equity exposure. SCHD could be worth considering as some part of a portfolio, Schwab US equity dividend etf, .07% annual cost (aka dirt cheap), ~ 2.65% dividend yield in large companies that should have less volatility than the S&P 500. From Morningstar:

Suitability
In contrast to most dividend strategy funds, Schwab U.S. Dividend Equity has a strong quality bent. This focus on quality tends to depress the fund's dividend yield relative to its peers because high-quality companies tend to be more expensive than companies that most dividend funds track. Yet, the fund's holdings are also better positioned to weather economic uncertainty and have greater capacity to raise their dividends in the future. Consequently, this fund is a suitable core holding for investors looking for income growth and less volatility than funds that focus more narrowly on dividend yield.

Fixed income is really tough right now, if he has a stable value option in his existing retirement account might hang out in that until better "safe" options are available. I bought something today at a 12.47% discount to NAV but I am not getting into it on here.