Investors with an eye toward income generation — especially as they look toward retirement — may want to consider fine-tuning their "balanced" portfolios, according to recent research from BlackRock. The S & P 500 has surged 17% in 2024, rising on exuberance around tech and the artificial intelligence trade. Tech darling Nvidia , up more than 150% this year, accounts for more than 6% of the broad market index's weighting.
.SPX YTD mountain S & P 500 in 2024 As exciting as those gains may be, investors nearing retirement are courting plenty of risk by allowing Big Tech's run drive their portfolios. "I think people are losing sight of the fact that you can generate really good returns from taking an income-oriented approach," said Justin Christofel, co-head of income investing, multi-asset strategies and solutions at BlackRock.
"We talk about saving for retirement, for college and any number of things — but there isn't enough time spent on what you should do when you are retired and no longer earning a paycheck," he added. "When you retire, you're facing new risks you didn't face when you were accumulating." Investors can try to manage some of that risk in the march into retirement by legging into income-generating assets.
That could mean migrating from a balanced portfolio that's allocated 60% in stocks and 40% bonds to a model that juices income with allocations toward dividend-paying stocks, higher yielding bonds and other fixed income assets, BlackRock found. A 40/60 .