three pillars of retirement

The Three Pillars of Investing for Retirement

You’ve worked a lifetime to accumulate a retirement nest egg. Those assets now must support you for what could easily be another thirty or forty years. Preserving the principal value of those assets, receiving a regular and generous income, and keeping that income growing at least as fast as inflation are, or should be, the goals of most anyone trying to live off their assets in retirement. For clients of Donaldson Capital Management, these goals become reality by a straightforward investment philosophy. It goes like this:

The value of any asset can be determined by the cash flow it generates for its owners over time. Therefore, if the cash generated by a portfolio increases over time, so too, will its value. Investing in only high-quality bonds and equities of financially strong companies that pay ever-increasing dividends can create an endowment that pays generous income to its owners. Better yet, the total income from a portfolio managed in this fashion increases virtually every year. As the income (dividends and interest) grows, it invariably pushes the value of the portfolio higher, even while its owner withdrawals all of the income being generated.

At Donaldson Capital Management, we call this strategy our Endowment style of management. Since we started tracking its performance in 1995 through December 31, 2009, the Endowment strategy has produced a 8.4% annual compounded rate of return after fees, while subjecting our clients to far less risk than the stock markets in general. If you’d like to know more, please contact Randy Alsman at 800-321-7442 or ralsman@dcmol.com.