Profiting from growth and income with Retirement Income Warrior

0:09Welcome back to the show, David Alton Clark. Very happy to have you back on Investing Experts. Thanks for making the time and coming back on. Hey, it's great to be here and it's always nice to see you, Rena. Likewise, David. And we have some interesting and exciting news for your subscribers. already know that you had a recent name change for your investing group. It's now known as the Retirement Income Warrior. I'm interested, are you more focused on retirement or is the name just more reflective of the content that you already had? It's more reflective of the content. It better describes the service itself.

0:50And we had kind of a marketing makeover. and the SEO for that name is way better than the Winter Warrior Investor, which really doesn't give you an idea of what we're really focused on. So it's not any change to the focus of the service, but it better reflects our objective of the service. Makes sense. So talk to us a little bit about what your focus is on and what you talk about in your service specifically and how you invest, how you're analyzing the markets. Yes. It's all about creating a stable flow of retirement income. And it's a little bit of a unique strategy that was developed by my father and it worked very well.

1:35I have three different income portfolios ranging divided by risk level from 5 % to 12%. And then I also have two growth portfolios, a quality growth portfolio and speculative growth portfolio, which I call the income gardens. And the objective is to hopefully get capital gains from the growth side of the portfolio, take profits on those, and then redeploy them into the income side of the portfolio. Over time, as you grow older and it's a long, everything's time in the market, not timing the market. So hopefully by the time you retire, you've got a majority of your funds in stocks and holdings that maybe they're 5 % to 7 % yield that are really dependable, durable yields and income for you.

2:31so you don't have to have that much risk once you're in retirement. So it's for pre-retirees and retirees. Over time, the growth side of the portfolio tends to shrink. In the very end, my father still had 10 % in his growth portfolio. And one of those stocks was Tesla. And that actually almost doubled his portfolio over the last 10 years of his life in itself because it grew so much. And so that's one of the reasons why I always have a little bit of money in stocks that are kind of like some of the people might remember the Ron Popeil, the set it and forget it guy. I don't know. You're pretty young, Rena, so you might not remember Ron Popeil.

3:16But anyway, those are kind of the ones that are those long shot type stocks. So I've got that in one portfolio. Other ones are in the quality growth portfolio, which had a lot of the AI stocks in it at one point in time. Last year was a really great year for us. We cultivated and harvested like$173 ,000 last year, taking profits on NVIDIA and several other stocks. I redeployed those across the income side of the portfolio. So I'm just continually doing that, taking profits, harvesting profits from the income garden, which are the growth portfolios, and then redeploying them into the income side of the portfolio until I get to a point where I have a set of stocks for my retirement income stream that I'm confident in that they're going to be able to provide that income but also not take a major capital loss.

4:13loss. So capital preservation is a big part of the strategy as well. What kind of stocks have you been getting out of and into these days? Let me take a look. Actually, I just sold out. When the year flips over, Rina, the losers from the previous year tend to become the winners and the winners become the losers. So the big loser last year in 2025 was the energy sector. So in December, I started loading up on certain energy stocks and I had some already that I was holding in the portfolio, always to have a certain exposure to the energy sector. But I added a few names and this year, the energy sector is leading.

5:01And I know a lot of times we talk about ExxonMobil is up 20 % this year. CVX or Chevron was the one that I had chosen and it was up like 27 % since the start of the year. So I actually took profits on that ExxonMobil. My last move I made is I took profits on ExxonMobil, Enterprise Product Partners, and MCOR, which is a infrastructure, AI infrastructure name for the grid. So those three stocks were up, both Enterprise Product Partners and Chevron were up over 20%. And then EME was up about 18%. So I went ahead and clipped off profits on those. But last year, I kind of saw the, you know, one of the things is it's not really market timing, but I go by how am I doing in this particular stock?

5:55So like Coinbase, I had Coinbase was one of my growth picks last year, we were up 40 % on that name. And it's really not about timing the market, but it's about taking those, clipping those coupons and taking those profits when you've got upside on there. And that was really, it's kind of funny because that was my mom's job. She was the one that was always having to tell my dad, you need to sell that. You're up 40 % or whatever. So once something gets up over 20 % in the gross side of the portfolio, if it's not in that speculative portfolio where it's kind of the Ron Popeil ones, which in there I have like IONQ, that's kind of a long term, that's my quantum bet.

6:40And so it's highly volatile. So I'm not really watching that. I'm in that for hopefully for 10 years from now. But Coinbase, we made 40 % on that. I sold, I'm looking down my list right here, NVIDIA. We had a 45 % gain on that. So I took profits on that. But not everything is a winner. We kind of missed out on the copper run for FCX. I actually took a loss on that one. So it's not everything is a winner. But overall, we collected$102 ,000 in capital gains. And there were$73 ,000 in dividends collected on the stocks that I had sold. What would you say in terms of, you know, we just did these live events about income investing and growth investing.

7:28What would you say about those two categories of investing that's super important to keep in mind and that maybe you see that people don't keep in mind? That's a great question. I think the biggest thing about the income side is there is a lot of talk about high yield people that their strategy is to buy all high yield stocks, 10 percent or more in order to give you that income that you need in retirement. Like you need X. So you buy 40 high yield stocks, all yielding about 10 percent because that's how much money you need to pay your bills in retirement. The problem is that with all high yield stocks is that there's a lot of risk for capital loss.

8:14And once the stock price goes down, a lot of times the next thing happens is like a dividend cut or something like that. The problem is that those companies that are giving you that high of a yield, they aren't reinvesting that money into the company or putting in reserves so that they're more secure and they're safer. they're giving their profits away you know for you that's great but that makes those that's why high yield equates to higher risk higher yield higher risk because they're not using those those profits of the company to grow the company or make an acquisition that is accreted to the stock they're giving that back to the to the investors so i do have high yield portfolios But the objective is to lessen that portfolio and get everything into what I call the super swan portfolio, which is more around 5 % that you can count on not losing your money while still getting the income.

9:17So that's the problem there. On the growth side of the portfolio, you really got to have the long-term growth story is the most important thing. When I'm doing my due diligence, I kind of go down into, you know, get into a tighter and tighter group of due diligence. But the very first part of it is what's the long-term growth story? And that's what I pay the most attention to when I start my due diligence and I dig into the fundamentals and the technicals. Finally, the technicals is when you decide to buy or sell something. But right now, we are in a market where it's highly volatile. And we're at all-time highs right now.

9:54So that's kind of why I took profits on a lot of my growth stocks right before the year clicked over. Because we're at all-time highs. And there's really a situation right now. It's kind of sold off because gold and silver were at all-time highs. The market was at all-time highs. AI was at all-time highs, and so everything can't be true at once. My article back then was, something's got to give. Either gold or silver is going to crash, or the market's going to crash, but not crash, but going to have a drawdown. I don't want to scare people. But silver did kind of crash 30%, I don't know, a couple of weeks ago.

10:35But anyway, it was a situation that There was both things couldn't be true. We kind of had the opposite of that a little bit lately because you had, you know, the SaaSpocalypse that's going on right now, like AI is supposed to be taking over all the software companies. And so there, the software companies are all down 30, 40%, 50%. And what happened at the same time was the hyperscalers were down as well because people were worried about their CapEx being$600 billion this year. So the hyperscalers were getting hit because of their high CapEx. The software stocks were being hit because AI was supposed to resupplant them.

11:20And then also the infrastructure stocks and the picks and shovels like the chips and all those were selling off and the energy side was selling off because they were saying, hey, we don't even know if the grid can handle all these things that you guys are talking about. So it was like, okay, well, which one is it going to be? You can't have the software going down because AI is going to take over. But then again, AI is not going to take over because there's not enough power in the grid to supply it. And then also you're worried about how much money they're spending and it's never going to come to fruition.

11:58So those are going down. So that's why I think we had that big pop on Friday because finally that narrative kind of got busted out. And now you see that the software sector is more diversified than a lot of babies got thrown out with the bathwater like CrowdStrike. Palo Alto is my security play, cybersecurity play. And I feel like that one was I actually added to that one on the sell off because I felt that, you know, it was it was unjustly sold off with the rest of the software stocks. Some of them deserve to be sold off. It just depends. Any other contacts or or insight that you would add about this market?

12:42The other point is probably the Fed. The Fed's kind of taken a backseat lately. You haven't really heard a lot about that. But today, one of the Fed voting members came out with a pretty, pretty hawkish statement saying that she thought that rate cuts should be done anytime in the near future. So with the CPI coming up tomorrow and then the jobs report on Thursday, those are going to be critical. And I think those have kind of been thrown by the wayside with everybody so focused in on AI and the software and everything. And now we're going to get the Fed coming into the picture with I think on March 17th is the next Fed meeting where that could affect the markets.

13:27and I think people have kind of taken their eye off the ball as far as that goes. And employment. Employment's been weakening. That's been a topic of discussion where everyone's thinking that AI is going to cause a lot of people to lose their jobs, especially at the entry level. Somewhat that seems to be happening a little bit. The employment report's going to be, you know, I think very interesting this week as well for the markets. What would you say about the bond market and getting into and out of bonds for the average investor and then for a retiree? I think that you should have some exposure to bonds.

14:07I have that myself. I am currently looking at adding some more, but I think that's good to have bonds as well as equities so that you're diversified, especially in retirement. I would probably step up to the preferred level is what I'm looking at right now. I have a preferred bond ETF that I've got for the portfolio. And then BGH, I just added a couple of months ago. So you definitely need to have some exposure to bonds as well as the equities, whether retiree or not. So I don't have to worry about trying to pick out the best bonds myself. I believe in those two companies that are handling it.

14:49That's why I bought those. And they're diversified, too. They're handling the whole thing. They're actively managed. So I don't have to worry about the bonds that much. I'm not really a super bondsman, so I kind of put my faith into the people handling that. Got it. What else would you say about investing in this day, in the middle of February in 2026? What else do you feel like investors should really be keeping in mind? Well, you know, lately it's been highly volatile. So you have to keep in mind, keep a long-term perspective and don't get caught up in the noise. What I've been telling my people is you should only have your highest conviction holdings in your portfolio.

15:34So constantly be reviewing your portfolio to make sure you still believe in the long-term growth story of the holdings that you have. Because with the level of volatility, and it's just started, I don't think it's over. So we're kind of following the same trend as last year. There was a big, in the last couple of years, with the service, we're up 87 % right now in total return, which is great. but over the last three and a half years, we've endured like two or three 20 % drawdowns and they're usually in the March, April timeframe both of the last two years. So we're kind of heading into that zone right now.

16:18Like what I've done is trimmed all of those stocks last year that I was way up on in the growth portfolios and I took profits on a couple of ones in the income side as well. Really, you gotta look through the noise and focus on the long-term and be sure you're holding on to only the holdings that you have, the highest conviction that you have in those, and double-check on those because you're going to get tested. We're going to have another drawdown for sure sometime, probably between now and the end of the year, I feel. And it's always some exogenous event. Everyone is always trying to pinpoint, okay, this is what the issue is.

16:58like we're having this big issue with Iran right now, possibly going to war there. Those are all the known things. But it seems like every time it's something from out of left field that you don't even know about, like the yen carry trade collapsing. I think that was two years ago. So just keep on your toes, and you need to have just what you really believe in in your portfolio so that when the time comes that we do have a drawdown, you're able to stand strong and hang on because it always comes back. That's the thing. That's what happened both of those years. And it came back right away. And if you would have sold right down at the very bottom, you'd be kicking yourself right now.

17:47Do you think during the drawdown, aside from specific strategies, would you say patience is the most key, that mostly people should be staying in their long-term investments? Yes, yes. That's one of my key sayings, that patience equals profits. That's one of my mantras. And so you've got to be patient. That works for when you're in a drawdown and you've already double-checked everything and know that you believe in those stocks so you're not going to sell but it's also in buying stocks you need to take your time and do your due diligence look into the history of it what lies ahead for the company and then also you need to make sure that the company and the stock are aligned a lot of times the company's great but the stock is just gone to the to the moon already so even though the company's doing great.

18:43The stock's way overshot what the expectations are. What's an example of something like that? Something like that, maybe Palantir. You know, when you look at the, they're killing it, right? But their price to sales ratio is like 165, you know, so that's 165 years worth of revenue that they're going to have to come in. So I think that's probably why it's gone from, I think it was up in the 200s and now it's all the way down to 140 right now. And it's still way, it's the most expensive stock in the stock market, I believe. But that would be one example of how it's just gotten way ahead of itself as far as, you know, when it's way more valuable than NVIDIA.

19:34NVIDIA is actually priced pretty relatively cheap compared to Palantir for sure. Would you be willing to share an example of something that you saw during a drawdown that you felt like maybe was going to throw you off course? Actually, you could give an example of something that did end up throwing you off course or something that threatened to throw you off course, but you stuck with it. And is there an example of something that during a drawdown that you wanted to scoop up that you did that that paid off? One, I want to look back at my list. One of the ones that I kind of feel like I messed up on was Freeport-McMarin, where it's actually spiked up.

20:17I was doing good with it. I think we got in at about 45, and then they had a big issue with their Grasberg mine last year, and it dropped about 5 % or 10%, and there was a big issue. The mine was shut down and that was a big part of their copper production. So I went ahead and just cut out of that one. I think, you know, about five or 10 % below where I bought it. I went ahead and sold out on that one. And I'm still kind of kicking myself for that because that was a short term thing. But at the time I was like, I'm not so sure. I kind of felt like it was going to be dead money for a while since they're going to take a long time to get that mine up and gone.

21:01but then all of a sudden the whole the copper just went crazy and now it's way up ahead of where it is and I should have I should have just stuck with that one I shouldn't have let that one that didn't really change the copper narrative you know and that's why I bought it because we're going to need a lot of copper for the for the grid and I kind of lost sight of that and sold out on a short-term thing and it kind of shook me out of that one that was one where you know I regret selling that one one where i bought in at the lows was actually nvidia when nvidia i think it was all the way up to almost 200 it got all the way down to 98 and uh that was last year it was 98 and it was it was they were they were just talking about how there was a lot of competition and uh they weren't sure if uh the people the hyperscalers that was before everybody started putting out their capex figures and they're like well we don't know if they're gonna get all the business they're supposed to get it was a really negative narrative but i had decided to step in on that one because i really i believed that i kind of uh i did that because i had nvidia like way cheaper than that a few years back you know when it was just a gaming all they were talking about was gaming for nvidia and i was in on that as it was really low and but i sold out on that because there was some kind of news about that shook me out of that way back when.

22:29So when it got down to 98, I think it was last year, I was like, I'm not letting this one slip by. I think it had a 22 PE or something like that at the time. And I was like, this is crazy. So I bought in at 98 on that one and wrote it up to, I think, 180 or something like that. But I took profits on that right before the end of the year. What would you say now that we're getting into tax season, what would you say? I mean, I know this isn't, you know, tax advice and you're not a tax attorney, but what would you say just to keep in mind in terms of taxes for this kind of investing? Well, you know, there's tax loss harvesting that goes on in the prior year.

23:09I actually, you know, got my degree in accounting with honors from UTSA. And I was at Ernst & Young and I actually have my tax. I can do taxes. I could open up a tax company if I wanted to, but I got to approve. I'm an IRS tax person. I have a number. Well, maybe this should be a tax advice show. Just kidding. It's not. I'm not giving tax advice, that's for sure. But yeah, a lot of people, I do use the tax loss harvesting piece of it. So that's why a lot of times, that's why things kind of switch from winners become losers and losers become winners because a lot of people do the tax loss harvesting before the end of the year last year because they want to match up their gains with losses so that they can lower their taxes.

24:00That's why at this time of the year, a lot of people are, you're seeing a lot of stocks that they do good on the earnings or great on the earnings, like Palantir, for instance, they killed it, but it's sold off. And so that's kind of a sign that we're in the sell the rip. You There's either buy the dip or sell the rip. So this year, people are selling a lot of stocks because they held on to them to the beginning of the year, their gains, so that they've got another 12 months to go before they have to pay taxes on them. Or maybe they'll have a loss in something between now and the end of the year, and they'll be able to match that up against the capital gains that they're taking right now.

24:42So from a tax perspective, this is what I told my people also. So part of the selling that you're seeing right now is basically because of the tax effects where they held on to those gains until the year clicked over and they're selling out early in the year so that they have 12 months to go. Maybe they'll be able to match those gains off against some losses or at least they've got 12 months before they got to pay the taxes on those gains. Any other earnings takeaways from this recent season? It's really been a negative type season. The earnings are coming in great and earnings are up, but a lot of the stocks that are reporting good earnings or great earnings are still getting sold off after earnings.

25:29So you almost have to really knock the ball out of the park to not get sold off. But what the earnings season is telling me is that we're kind of in a period of where people are taking profits and hunkering down. There's a lot of uncertainty ahead. This is a mid-year election year, which is very uncertain times. A lot of things get turned around. If the Congress flips over to the other side from Trump, a lot of the things might get turned back that he's put into place. You never know. And so I think a lot of people are kind of being very cautious right now. And I agree with that. I think that we will probably, by the end of the year, after the turn of the year, we get through the elections and all that.

26:22We'll probably have, we'll be up ahead of where we are right now. But this year seems to be kind of following in the same footsteps as last year, where we had a significant drawdown between now and the end of summer. Which was that tariff tantrum, that exogenous event from last year. And there you go. I'm glad you brought that up because that's another thing, too. No one's really been talking about the Supreme Court and the tariff issue that they've been reviewing. Remember, their initial notes on that were pretty negative, where it felt like even some of the conservative judges were saying that they didn't really agree that Trump had the legal authority to impose all these tariffs.

27:04right but they're not coming back online until february 28th that's why it's been quiet they had they had a month off and they're coming back on the 28th and they're expecting the decision on that sometime maybe on the 28th but after the 28th they'll be back in session and they'll be able to put out their thought on that and so that could be one of the another uncertainty wrinkle that's thrown into the mix. Now, the Trump administration says that they've got other avenues to impose these tariffs. If that does come up, if the Supreme Court says, no, you can't impose all these tariffs, the Trump administration says, well, then we've got another way to get into it, you know, another way to wiggle into the tariffs.

27:50And we don't really have to worry about that. But who really knows about that? So that's another thing that's kind of out there that you've got to have your eye on. You've been through some things. You've seen a lot of stuff in your life. You're a decorated veteran. What would you say? How do you I mean, I know we've talked a lot and we've discussed this in previous conversations. Also, it's certainly it's one thing to say to keep your wits about you as volatility and uncertainty are unfolding all around us. But it's quite another to actually accomplish that. And it's and we all know that that's hard to do.

28:23What do you find that works for you that keeps you level-headed in these times? I think the main thing is the history, knowing that every time there's been a sell-off or a significant downturn, the markets always come back. And that's kind of a lived experience. You've got to go through it, you know, through the 2000.com bubble popping and the 2008 House of Cards falling. And those types of things were where you know that sooner or later the market's going to make a comeback. And then there's shorter term things like the 9-11. The 9-11, and I remember I was watching CNBC on the morning that that happened.

29:11and uh i was doing great the market was great and then it was live on tv when that happened when those planes went into the buildings and immediately after the first plane it wasn't that big of a deal the market really didn't move and they were talking about wow there was an accident and it really wasn't affecting anything and then the second plane came in and hit the other building and that's when the market dive bombed because that's when everybody knew that this was not an accident. We were being attacked or something of that nature. And so the market just dive bombed. And a lot of the stocks I had were down huge and they closed the stock market for a while.

29:51And you just did not know what was going to happen next. But just from past history, and I knew that I wasn't going to sell out. And sure enough, they've opened back up and all my stocks were way down, but I think it wasn't more than just a couple of weeks before the market was right back to where it was before. So after you've gone through a few things like that, you have to realize that it's always going to make a comeback. Another thing too is that you kind of got to get outside yourself and think about it from a perspective of this is a long-term investment. Don't let the short-term noise get to you.

30:33There's a lot of short-term noise. If you get caught up in all the noise and the little tidbits of news, you need to fall back. And that's what I'm saying about only have your highest conviction names and review it and say, okay, is the long-term growth story still intact? Yes. Okay. Well, then this is either when the stocks are down. when I was younger, if my stock went down 20 % and everything looked like it was going to be negative in the very beginning, usually I would sell out right then. I'd be like, I got to get it because you're watching it. And you're like, I got to get out of this. It's going down.