If I Were Retired Today, These 3 Income Machines Would Be My First Buys

Mar. 14, 2026

Leo Nelissen

Summary

• Ares Capital Corp., Agree Realty Series A Preferred, and Rayonier offer compelling, diversified income opportunities for a retirement portfolio.
• ARCC yields 10.4%, trades below book value, maintains a BBB rating, and has a sustainable dividend supported by low nonaccrual rates.
• ADC.PR.A offers a 6.2% yield, trades well below liquidation value, and benefits from Agree Realty’s A-rated balance sheet and net lease tenant base.
• RYN provides 5.2% yield, cyclical upside, and inflation protection, though a recent dividend reduction followed a merger; each pick addresses distinct risk/reward themes.

Introduction

As some of you may know, I was a Corporate Treasury intern in the past. That was back in 2019 when I was still figuring out what I wanted to do in life. A few months after I left to finish my master’s degree in International Business Administration (with a focus on purchasing and supply chains), my former boss retired. That’s old news and doesn’t affect your portfolio at all. However, because Henkel (the company where I interned) is a European heavyweight, he was interviewed, as he was a rather powerful treasury manager.

I’m bringing that up because I just re-read the piece. One thing stood out to me:

Treasury chief Michael Reuter has left consumer-goods company Henkel and retired at the end of September, as DerTreasurer has learned. Shortly before his departure, he and his team were able to make a splash in the capital market: Henkel issued two sterling bonds totaling the equivalent of 850 million euros, both with a negative yield. – Der Treasurer (translated)

Again, this isn’t about Henkel or about my past. This is about the last line in that paragraph, which mentioned that Henkel issued the equivalent of EUR 850 million in negative-yielding debt. Back then, people paid corporations to take their money. Sure, Henkel is an A-rated giant with terrific diversification, but it’s still “nuts” if you think about it.

And, to use a chart from 2019, it wasn’t unusual. Back then, the total amount of debt with a negative yield was $16 trillion. More than 28% of the debt tracked by the Bloomberg Barclays Global Aggregate Index had a yield of less than 0%.

Back then, it was truly the best time to own low-risk, high-quality dividend growth stocks, as investors were aggressively chasing income as if the world would end. This was obviously fully supported by ultra-low rates in developed nations.

To me, it’s a perfect example of how major capital shifts impact our portfolios. Less than two years ago, when rates spiked, the exact opposite happened. Some investors (I’m painting with a broad brush again) sold equities and went into short-term bonds that yielded more than 5%. That explains the massive surge in money market assets, as we can see below.

While I am typing this, there’s close to $8 trillion in money market funds, which is basically short-term government debt (risk-free income, so to speak).

In 2020, that number was $5 trillion. Between 2010 and 2019, it was $3 trillion on a very consistent basis, as investors were buying income in other places, as the yield on short-term debt was close to zero.

These are the capital rotations I care so much about, as they are crucial for asset management. We’re seeing the same in equities. In the first two months of this year, investors wanted cyclical value stocks (that’s my core thesis, as most readers will know) and non-U.S. equities.

As we can see below, over the past 15 years, U.S. stocks were the place to be. However, on a year-to-date basis in 2026 (that’s January-February), U.S. stocks lagged international stocks.

The war in Iran changed that.

My friend and business partner, Albert Marko, wrote on that, as he made the case that the U.S. is using the conflict to create new capital flows into the U.S., based on the realization that in times of distress, it has the safest supply chains (think of its oil supply), dollar safety, military power, and other tailwinds.

Bloomberg just confirmed that:

But the developments since the US and Israeli attacks on Iran reveal that America is still the go-to market for investors. If the US has warts, it remains the center of global innovation and home to the deepest and most liquid markets on the planet, a feature that becomes indispensable when economic shocks hit. After 14 chaotic months, we’re also seeing signs emerge of institutional resilience at the Federal Reserve and Supreme Court, an additional source of comfort. – Bloomberg

That’s a good thing, as it not only supports my thesis that America remains a terrific (if not the best) market for long-term capital allocation, but also because the market’s biggest companies are now in need of massive funding. While most hyperscalers (think of the Mag-7) have terrific balance sheets, AI spending is now forcing them to diversify these risks.

It was just reported that Amazon (AMZN) is issuing $37 billion in bonds. According to Reuters, the bond deal resulted in $126 billion worth of demand, which is a good sign for Amazon. And then there’s Alphabet (GOOGL), which raised $100 billion, including through a 100-year bond. It was observed 10x, according to Seeking Alpha.

At this point, I have to admit that my intro seems to be all over the place (and close to 1,000 words – sorry!).

However, it brings me to my main point, which is that as global markets are getting volatile, the U.S. once again defeats the argument that it’s not the go-to place for capital anymore. We also see that Americans are using it to issue debt for the AI transition.

Unfortunately, this creates a bit of an issue. As rates are potentially falling, the environment isn’t great for income anymore. And while we’re far away from a 2019 scenario where it costs money in some cases to lend money to corporations, it’s not a scenario where I want to be forced into deals like financing the AI revolution. I want no part in that, at least not through bonds.

This brings me to the question that people ask me quite frequently, which is what I would own if I were retired right now? It’s high-quality U.S. income that comes with both income and unique characteristics that add value to most income portfolios.

With all of this in mind, let’s look at three income ideas I would buy today if I were retired.

Here’s What I Would Buy

A big part of the intro was about the credit market. I have often said that I do not like bonds, as I’m an “equity guy.” I want to own a share of a company and grow with it over time, while generating income, in some cases.

Right now, that lending market is under fire. While Alphabet and Amazon are not having a hard time finding buyers, the private credit market is seeing cracks. Many asset managers and their Business Development Companies have sold off hard this year, including some of the best players like Ares Management (ARES) and Apollo Global Management (APO), which I consider the gold standard of private credit.

Fears are basically created by software disruption and some negative headlines regarding “unexpected” defaults that make people wonder how much bad debt is hidden in this industry. When adding that private credit is very cyclical, it explains why I am so careful in this industry.

However, I still would buy exposure here, as there are some great deals out there. One of them is Ares Capital Corp. (ARCC). It’s the BDC owned by Ares Management. Right now, I am actually looking to buy ARES in the months ahead (I’ll update you on my liquidity and plans soon). However, if I were retired, I would buy the higher-yielding BDC.

Ares Capital currently yields 10.4%. This dividend hasn’t been cut since the Great Financial Crisis. And, as of December 31, 2025, it’s a BDC with a superior total return compared to banks and BDC peers, as Ares has figured out how to find a great balance between risk (yield) and safety (picking the right deals).

Moreover, not only is this the biggest BDC on the market, but also a BDC with terrific fundamentals, as it has a BBB credit rating from all three major rating agencies (Fitch even has a positive outlook, which could mean a path to BBB+), and more than $6 billion in liquidity.

Its portfolio has a nonaccrual rate of 1.8% (at cost). That’s in line with prior year levels, according to the company. Moreover, it’s below its own long-term average of 2.8% and below the BDC industry average of 3.8%. At fair value, that number is just 1.2%.

The company also believes its dividend is sustainable:

We believe ARCC is in a good position to maintain its dividend despite market expectations for further declines in short-term interest rates. We generally set our dividend level based on our view of the earnings power of our company. While lower short-term rates present an earnings headwind, we believe there are multiple factors that can support our earnings and thus, our current dividend level for the foreseeable future. – ARCC 4Q25 Earnings Call

And to incorporate higher risks, ARCC is now being traded at 7% below book value.

Another stock I would buy is Agree Realty Series A (ADC.PR.A), which is Agree Realty’s preferred stock. In other words, it’s somewhat of a hybrid between a bond and a stock. Investors get exposure to Agree Realty (equity ownership), yet no voting rights and no dividend growth. What they do get is bond-like dividend payments and more safety, as preferred stock is more “senior” than common equity.

Generally speaking, I dislike capped upside, which applies to assets without dividend growth. However, the risk/reward of this preferred stock is great, as it trades at $17.19 while I am writing this. That’s substantially lower than the liquidation price of $25. That’s the price you’ll get if the company were to buy back the preferred stock.

That limited upside isn’t great for long-term growth investors, yet it’s perfect for income, as it is a premium of 45% compared to the current price. That’s the upside you’ll get before you potentially lose these shares in a buyback. Moreover, because of the low price, the monthly dividend yield is 6.2%. That’s a terrific yield, roughly 200 basis points above the 10-year government bond.

As a comparison, Agree Realty (ADC) common stock yields 3.9%. That dividend has a five-year CAGR of 1.9%. On October 14, it raised the dividend by 2.3%. If we assume that the dividend growth rate holds, investors will end up with a yield on cost of 4.9% after ten years, which is still way below the rate on the preferred stock.

It also helps that Agree has an A-rated balance sheet, a portfolio that mostly caters to ultra-safe net lease tenants, and growth opportunities in areas like sale-leaseback. Moreover, as this preferred stock is cumulative, if Agree were to run into issues leading to dividend cuts, it would have to make preferred shareholders whole before it would be allowed to pay a common dividend again.

I really like this preferred stock. And, if I were to retire today, I would buy this in a heartbeat.

The third pick is somewhat unusual, as it’s Rayonier (RYN). This company is a specialty REIT. Technically, it’s a “Land Resources REIT,” as it owns timberland that covers more than 4 million acres after merging with PotlatchDeltic.

As a result, their business model is based on three factors. They sell timber to lumber mills, where lumber for a wide range of purposes is created. Homebuilding is a major factor. This business is cyclical, as it depends on pricing and demand. It also generates high-quality revenue from strategic master-planned communities. That’s high-quality developed land for new housing communities. It’s much less volatile than selling timber.

Last but not least, they use land for value-adding opportunities like solar, carbon credits, bioenergy, and so much more.

As we can see in the total return chart below (capital gains + dividends), RYN isn’t a low-volatility stock, which is why I have always avoided it. If I want a volatile stock, I prefer buying a housing supplier that tends to rise faster during times of strong economic growth.

The good news is that the RYN risk/reward looks highly attractive.

As we can see below, despite the increase in the ISM Manufacturing Index (the black line), the year-over-year performance of RYN has continued to go down. At this point, I like the risk/reward a lot.

If we get broadening economic growth, we’ll see both pricing and demand tailwinds in this space. Moreover, while the dividend was cut by 4.6% in February, it was part of the merger. Currently, it yields 5.2% based on a quarterly dividend of $0.27.

At points like these, I think RYN makes for a great investment that provides income, a great risk/reward, as well as inflation protection for an income portfolio, as this stock tends to do well in times of rising inflation.

Generally speaking, I truly believe that all three of these picks bring something truly unique to the table that I find highly compelling for an income portfolio. And, as I always say, stay tuned for more ideas!

For now, here’s a short takeaway:

Takeaway

My introduction was pretty chaotic today. However, my point is that it’s all about identifying capital rotations and finding the best risk/reward for an income portfolio, or any portfolio, really.

At a time when money market funds are overflowing with capital, rates are likely to be pressured, and economic growth is set to rebound, I like to apply a diversified approach to buying high-quality income.

If I were retired today, I would buy ARCC for elevated BDC income, preferred Agree Realty stock due to a 6% yield and a terrific risk/reward, and Rayonier because it provides 5% income and cyclical tailwinds and elevated inflation protection.

These are three different themes, but all have one thing in common, which is a unique ability to add value to an income portfolio.

Three Risks You Need To Know

• The biggest risk for ARCC is credit risk. While it is protected against further declines in short-term rates, a domino effect in credit could lead to elevated non-accrual rates.
• For Agree Realty’s preferred stock, the biggest risk is a surge in long-term government debt rates. As these compete with preferred stock due to the bond-like dividend payments, they could keep a lid on capital gains.
• For RYN, the biggest risk is a sluggish housing market and related pricing headwinds in lumber.

I’ve chosen a share that should be in the SNOWBALL as it’s a dividend hero and increased its dividend for over 50 years.

Remember it’s easier with

and the buy signal can reverse on you.

The only interpretation you need, after you have bought, is when to take profit, all or part. Also since the reversal last April markets have been really strong and so it’s likely to get more difficult from here. If you trade the chart, you will not get in, right at the bottom or out right at the top.

But if you want to

and you aren’t too greedy, it could be for you.

MRCH is one share I am considering buying for the SNOWBALL as a replacement for DIG that was sold.

DIG paid a 6% dividend on last year’s NAV, so if the NAV falls next year’s yield would fall with it.

I would like to buy MRCH if/when it yields around 5%, as it has a progressive dividend policy, so

the yield should on buying price should yield more than 6%. One big problem in setting a buying target is that the market could reverse and you are left with no position. If the market continues to fall after you have bought, as long as you are happy with the yield, it matters little. You can only get out a share at the top and in at the bottom by luck, so don’t waste too much time trying to do so.

I’ve chosen a share that will never be included in the SNOWBALL but would of been of interest too many to own. Your aim is just to trade the price, without any other consideration.

The KISS is to own above the blue support line and add to the position, pyramiding, at the basic point and figure buy signal.

(shown on the chart)

When a new resistance line is formed, you either sit it out, sell part or whole and try to get back into the trade at a better price.

You could take out your profit, retain your stake and re-invest in your snowball and try to do it all over again.

Obviously you wouldn’t want to trade against the chart and buy tomorrow. Whilst tech is always going to be the buzz trade of tomorrow, it may not be today.

There is a whole world of technicals for point and figure trading of which you don’t need to know, any of, to make money

Story by Zaven Boyrazian, CFA

14 Mar 

Hand flipping wooden cubes for change wording” Panic” to ” Calm”.© Provided by The Motley Fool

A growing collection of US stocks has been on quite a rollercoaster ride this month. Yet the US stock market as a whole has so far proven to be relatively resilient to the conflict in the Middle East. In fact, despite all the doom and gloom of media headlines, the S&P 500‘s so far only slipped by around 2%.

However, the story’s been quite different when zooming in on individual sectors. So which US stocks are the winners and losers right now? What lies around the corner? And what can investors do to protect their portfolios?

Winners and losers

As skyrocketing oil & gas prices have already made clear, the war in Iran doesn’t bode well for energy-related supply chains. But it’s particularly problematic for industries that rely heavily on fossil fuels.

Most notably, this includes airlines and cruise operators who consume a lot of fuel. American Airlines, United Airlines and Delta Air Lines have already seen roughly 31%, 23%, and 16% wiped off their respective share prices since the start of the year. And it’s a similar story for Carnival Corporation and Norwegian Cruise Line.

On the other side of this equation sit the energy producers such as ConocoPhillips, Chevron, and Exxon Mobil, all of which have enjoyed a 20%+ surge over the same period. Meanwhile, defence contractors including Lockheed Martin and Northrop Grumman have enjoyed even bigger rallies as war expands their order books.

Risk of contagion

With some sectors benefiting and others taking a tumble, the overall impact on the S&P 500 has been fairly muted. But that could change depending on how the situation evolves.

A prolonged conflict risks inflation making a nasty comeback, particularly for energy prices, putting more pressure on consumer wallets. It could even delay or perhaps reverse recent interest rate cuts. And combined, these effects could adversely impact the real estate, automotive, discretionary retail, construction, and industrial sectors.

So what should investors do now?

Keep calm and carry on

While the evolving geopolitical and macroeconomic landscape is concerning, it’s essential not to start panic-selling. Instead, investors should review their personal risk tolerances and adjust their portfolios accordingly.

For investors who can stomach the volatility, using any future dips in stock prices to buy more quality shares at a discount could pave the way for superior long-term returns.

Here’s how much it takes

The idea of buying dividend shares for their passive income potential can sound promising. How might the nuts and bolts work in practice?

Posted by Christopher Ruane

Published 14 March

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

The idea of putting money into dividend shares to earn passive income is a very old one.

One reason it has hung around so long is precisely because it can work well. Another is its adaptability: it can be suited to the amount of money a particular person has to spare.

Let me run through some basics, to show what that might look like in action for someone targeting £750 per month of income.

Understanding the role of dividend yield

£750 per month equates to £9k per year.

If someone wanted to earn that in interest from a bank account, they would look at the interest rate to decide how much to invest.

The current Bank of England base rate is 3.75%. Now, deposit accounts may well offer less, but using the base rate as an example, £9k is 3.75% of £240k. So, someone targetting £9k per year of interest at a 3.75% rate would need to invest £240k.

In some ways, dividend yield works along similar lines – but with some important differences.

The current average FTSE 100 yield is 3%. But in today’s market, I think 6% is achievable while sticking to blue-chip businesses. At a 6% yield, a £9k passive income would take investment of £150k.

Dividends are never guaranteed, though. Come to that, interest rates can move around too.

These days it is unlikely that the money in a bank account will be wiped out through bank insolvency (the first £120k is typically covered by a compensation scheme at any rate). But share prices can move around in value.

That might be bad for the portfolio’s worth, if prices fall. But it can also be good in my view as prices can move up.

So, as well as passive income, someone investing in the stock market may also make a capital gain.

The mechanics of stock market investing

Before putting money into the stock market to try and generate passive income streams, an investor ought to learn about some of the key concepts involved. Those range from valuing shares to how fees and commissions can eat into financial returns.

Given the latter point, it makes sense to choose carefully when selecting a share-dealing account, Stocks and Shares ISA, or trading app.

One income share to consider

One dividend share I think is worth considering for its passive income prospects is FTSE 100 asset manager M&G (LSE: MNG).

The company aims to grow its dividend per share annually – and in this week’s annual results it did exactly that.

The current yield of 6.8% is well above the 6% target I mentioned above.

Dividend growth was not the only good news in the results. One risk that has troubled me about M&G in recent years is investors pulling more out of its funds than they put in.

But the company reported a £7.8bn net inflow last year into its open business (‘open’ because some of M&G’s funds are closed to new money). That is encouraging, though the risk still concerns me especially in volatile markets like those we are currently seeing.

M&G has a strong brand and large customer base, with £376bn of assets under management and administration. It is highly capital generative, which could help support ongoing dividend growth.

Chaos Is Rocket Fuel for These 2 Stocks (and Their Dividends)

Brett Owens, Chief Investment Strategist
Updated: March 10, 2026

One thing is clear from the last few weeks: The geopolitical chaos never stops.

We contrarians get that. But the first-level crowd does not. When we’re hit with a war, snap tariffs or a pandemic (ugh!), most investors panic.

And the truth is, chaos—whether it’s war in Iran or fears that AI will erase whole industries—is coming at us faster than ever.

Most people think they can handle this wave of worry. But it pays to remember the famous Mike Tyson quote: “Everyone has a plan until they get punched in the face.”

True in life and investing. It’s just another way of saying that the same investors who think they can handle the latest “punch in the face” are often the first to turtle and sell low. That’s our “in.”

Volatility + the “Dividend Magnet” = Upside (and Payout Growth)

We contrarians know that market volatility (Latin for panic) is a tool. We look forward to panics like these because they let us build a growing income stream at a bargain.

While the mainstream crowd is seeing stars, we’re combing the market for stocks with two key things: Accelerating dividend growth and share prices that have fallen behind that payout growth.

These “lagging” dividend plays not only boost our income, but their rising payouts act like a “magnet” on their share prices. That’s because investors catch wind of the hike and bid the price higher in response.

The result: The stock rises to match the dividend, keeping the stock’s current yield relatively stable.

It’s one of the most reliable (and least-understood) patterns in investing, and I’ve seen it play out time and time again.

And we’ll put ourselves in an even better position if we can grab our stake while the share price is lagging the dividend’s growth. That way, we’re primed for some sweet bonus upside as the stock “snaps back.”

The best way to appreciate the punch this strategy packs is to see it in action. Let’s do that with two stocks from the portfolio of my Hidden Yields dividend-growth service. Both have fallen behind their Dividend Magnets—and look primed to bounce as a result.

“Dividend Magnet” Play No. 1: Allegion plc (ALLE)

Allegion plc (ALLE) doesn’t fire up many investors’ imaginations—at least at first. For one, it yields just 1.3%. Second, it makes locks, including under its flagship Schlage banner. (“Boring!” yells the mainstream crowd.)

Let’s take that supposedly “low” yield first, because it masks something critical: In the last decade, this company has hiked its payout 359%.

So forget about 1.3%. Investors who bought back then are collecting about 3.4% on their original cost today. And these long-term ALLE holders can look forward to continued growth in their yield on cost as the dividend keeps marching higher.

Dividend Magnet? Check. Look at how the divvie has pulled the stock up in that time:

Allegion’s “Magnetized” Dividend …

The pattern is unmistakable. And look at the right side of that chart—you can see that Allegion’s stock has slipped behind the payout. Zeroing in on just the last five years gives us an even clearer snapshot of that gap:

… Gives Us Another “Lag” to Pounce On

This is clearly telling us now is a good time to buy, especially with a stock like Allegion, whose products sell well in any economy.

It’s also a “back-door” (sorry, couldn’t resist!) tech play through its focus on “smart” locks. If you’ve rented an Airbnb lately, you know that many homeowners are going with these so they can change access codes at will and avoid the hassle of often-lost keys.

The result: skyrocketing smart-lock demand. Recent figures from Fortune Business Insights say the market will grow at a 19.7% annualized clip from 2026 to 2034.

The stock returned 84% in Trump 1.0 and has already gained 24% in the first 13 months of Trump 2.0. I expect its performance to continue thanks to its resilient business and well-supported dividend: Over the last 12 months, the payout has accounted for just 26% of free cash flow.

That’s well below my 50% safety line. Add in rising revenue (up 9% in the latest quarter) and adjusted EPS (up just over 4%) and more payout hikes are a “lock.”

“Dividend Magnet” Play No. 2 Visa (V)

Our second stock is even more exciting than Allegion because it runs the “plumbing” of the global payment system, pumping 69.4 billion transactions through its network in just the last quarter.

That’s Visa (V), which also tends to be overlooked because of its “low” 0.8% yield. Like Allegion, Visa’s business is resilient. And (excuse the mixed metaphor) its share price is even more of a coiled spring, thanks to its relentless Dividend Magnet:

Every Dip a Chance to Buy Cheap (and Another One Appears)

As you can see above, “Big V’s” dividend hasn’t just been growing—it’s been accelerating. The last hike, declared in October, was north of 13%. And if you look closely, you can see that every dip in that time has been a buying opportunity.

Which brings us to now, with the stock further off the dividend track than it’s been at any time in the last decade (and down 8% year-to-date). That’s ridiculous for a company that reported a 15% jump in adjusted EPS in its latest quarter, on a similar 15% jump in revenue. Payment volume soared 8%.

And despite the gloomy headlines, consumer spending is holding up, particularly among wealthier households. And the labor market remains stable.

A further tailwind? AI (of course!). AI isn’t just making Visa more efficient. It’s changing shopping habits, too, as more consumers use the tech to quickly find what they want. Sellers, too, can boost sales through hyper-focused ad targeting. That points to more traffic—and transaction fees—for Visa.

The bottom line? Both Visa and Allegion are sturdy businesses whose Dividend Magnets are piling upward pressure on their share prices. That makes now a great time to buy—before that “snap back” upside gets rolling.

“Dividend Magnets” Powering Up as Chaos Rages

The Dividend Magnet is our guide in times like these because when external events drive a stock off its dividend-growth path, we contrarians know it’s time to pounce.

Because sooner or later, that Dividend Magnet will overwhelm investor panic and yank the share price back up.

It’s proven.

These BDCs Yield Up to 15.6%. But Can We Trust Them?

Brett Owens, Chief Investment Strategist
Updated: March 13, 2026

This high-yield sector is being taken to the woodshed by the Wall Street spreadsheet jockeys this year.

The contrarian opportunity? Big yields up to 15.6% in BDC Land. Some of these deals are trading for as little as 72 cents on the dollar.

Which means opportunists like us have been handed something rare: wild yields of 11% to 15.6% for as little as 72 cents on the dollar.

Business development companies (BDCs) are “Main Street bankers” because they do what Wall Street won’t: provide capital to small and midsized businesses that the big banks either ignore entirely, or won’t touch without demanding a firstborn as collateral.

And they don’t just serve the little guys. They pay them, too—or rather, they pay us. BDCs are structured just like real estate investment trusts (REITs), with a similar mandate to distribute 90% of their profits as dividends in exchange for their tax-privileged structure.

The result? An industry-wide yield that makes the broader financial sector look like it’s barely trying.

But these aren’t normal times for financials broadly, or BDCs specifically.

Despite what was an otherwise solid earnings season, banks and financial firms have taken it on the chin: mounting recession worries, skyrocketing oil prices, Federal Reserve uncertainty. It’s a cocktail of doom.

And BDCs Got an Extra Shot Poured In

Fresh fears about private credit—the primary playground of many BDCs—have rattled investors. A few months after the bankruptcy of auto-parts supplier First Brands exposed some cracks in the market, more are appearing. Companies like Blue Owl (OWL), BlackRock (BLK) and Blackstone (BX) have been selling off fund assets, merging BDCs, and quietly limiting investors’ ability to withdraw. Not exactly confidence-inspiring headlines.

BDCs are also being weighed down by the growing AI-led disruption of the software industry; a recent Reuters report says “Barclays pegs the average BDC’s software exposure at about 20%,” and reminds us that because of the asset-light nature of these businesses, “lenders risk getting very little of value in future bankruptcies.”

In short: BDCs as a whole are cheaper for a reason. Which means we want to figure out whether these 11.0%-15.6% yields are cheaper because they deserve to be—or if they’ve been thrown out with the bathwater.

Gladstone Investment (GAIN)
Yield: 11.0%

Gladstone Investment (GAIN) focuses on financing lower-middle-market companies that generate EBITDA (earnings before interest, taxes, depreciation and amortization) of between $4 million and $15 million annually. It favors firms with a proven business model, stable cash flows and minimal market or technology risk.

That last part may very well explain why GAIN has held up so well in recent months.

In early February, Morgan Stanley mapped out how much exposure (as a percentage of fair value) that dozens of BDCs had to both software companies and information technology service firms. The data was from Q3 2025 reports, so it’s a little behind companies that have since reported Q4 earnings, but it’s directionally helpful.

Gladstone’s relatively tiny portfolio of 29 companies, for instance, has absolutely no exposure to either field; most of its holdings are concentrated in business/consumer services, consumer products and manufacturing.

I’ve pointed out in the past that Gladstone Investment has “a much bigger hunger for equity than the average BDC.” Gladstone says the average BDC has roughly 5%-10% equity exposure, but its target mix is 75% debt/25% equity. This high amount of equity shields it more from the weight of interest-rate declines than many of its peers.

One result of this deal mix is that its regular monthly dividend comes out to just 7%—high compared to the average stock, but low as far as BDCs are concerned. That said, it also pays substantial supplemental distributions when it realizes gains on equity investments—at least once per year over the past few years, sometimes more. If we factor in special one-time distributions over the past year, that yield jumps to 11%.

GAIN’s discount to its net asset value has widened in recent months, and it now trades at 91 cents on the dollar. That’s often the result of price declines, but not here. Instead, Gladstone Investment has enjoyed a rapid rise in net asset value over just the past few quarters, from $12.99 per share as of the middle of last year to $14.95 by calendar 2025’s end.

Gladstone Has Been Able to Tread Water While Other BDCs Sink

SLR Investment Corp. (SLRC)
Yield: 11.1%

SLR Investment Corp. (SLRC) invests primarily in senior secured loans of private U.S. middle market companies, but it does have some specialties. Within that broader debt type, it specializes in cash-flow loans, asset-based loans, equipment financings and, to a lesser extent, life science loans.

Unlike Gladstone, SLR has below-average equity exposure of just 2% right now. But it still has quite a few qualities:

• Only 65% of its investment portfolio is floating-rate, so it still has some protection against drops in interest rates.
• It has an extremely high number of portfolio companies compared to the average BDC. Currently, it has 880 holdings across 110 industries.
• It also has precious little exposure to the weakening areas of tech. The company noted in its Q4 report that it has only about 2% exposure to software (and Morgan Stanley says it has no IT services exposure). Michael Gross, co-CEO, clearly read the room, writing in the release that SLRC’s assets “can be viewed as a more attractive alternative relative to increasing investor concerns about private market industry exposure to software companies.”

SLR Investment announced Street-matching earnings in late February—not great, but still better than the weak reports from many of its peers. Shares have been trailing off regardless, but that’s par for the course for SLRC, whose numerous volatile dips over the years open up brief windows of higher-than-average yield and deeper-than-usual discounts. Currently, SLRC trades at a 19% discount to NAV.

SLRC Doesn’t Eclipse 11% Yield Territory Often, And When It Does, It’s Fleeting

Goldman Sachs BDC (GSBD)
Yield: 15.6%

Goldman Sachs BDC (GSBD), which provides financing to companies with annual EBITDA of between $5 million and $75 million, currently invests in just more than 170 companies spanning a dozen industries.

It’s also one of several dividend payers that Wall Street’s analyst community can’t stand. Investors clearly don’t love it, either, as GSBD is perpetually sale-priced; it currently trades at a steep 28% discount to NAV.

But why?

For one, despite the resources and name recognition from its ties to mega-cap investment bank Goldman Sachs (GS), GSBD has been an absolute stinker. It also slashed its core payout by 29% in 2025, switching to a base-and-supplemental system temporarily bolstered with special dividends (on top of the base and supplementals) that have since disappeared.

The End Result: Lower Quarterly Aggregate Payouts

We can add another reason: High exposure to the tech industry. As of the end of 2025, software was Goldman Sachs BDC’s single largest industry by fair value, making up about 18% of the portfolio.

I’ll point out that GSBD is barely down in 2026, which is much better than many of its peers. That could be, to some extent, because the BDC isn’t taking the software risk sitting down.

The company has an AI-risk framework to evaluate all new underwriting, and it has been aggressively ditching investments it views at high risk of being disrupted. Recently, President and COO Tucker Greene admitted the company exited a software loan it had held for eight years. There were no signs of deterioration. Greene simply flipped it for $0.99 on the dollar to get ahead of future AI disruption.

PennantPark Floating Rate Capital (PFLT)
Yield: 15.2%

PennantPark Floating Rate Capital (PFLT) targets midsized companies that generate $10 million to $50 million in annual EBITDA. It currently invests in more than 160 portfolio companies spread across roughly 110 private equity sponsors.

It’s also a “value-added” BDC that lends its expertise in specific industries, hence its portfolio focus on five categories: health care, consumer, business services, government services and—ahem—software and technology.

Good news on that last bit: As of the end of 2025, PFLT sported just about 4% exposure to the software sector. And its credit situation in general is good, with just four loans on non-accrual (representing just 0.5% of the portfolio at cost).

So Why Has PennantPark Taken It on the Chin?

Its most recent earnings report probably didn’t inspire confidence. I’ve mentioned previously that PFLT’s dividend has been frequently outstripping its net investment income (NII). It happened again in Q4, with its core NII of 27 cents per share coming in lower than the 30.75 cents it paid across three monthly dividends. Management continues to insist that “our run rate NII is projected to cover our current dividend as we ramp the PSSL II portfolio,” referring to its PennantPark Senior Secured Loan Fund II joint venture.

Still, that NII was short of estimates, NAV declined by 3%, and the company had to mark down several investments.

It’s a precarious position—so it’s unsurprising we’re being offered a massive 15% yield, at a 23% discount to NAV, to risk it.

The 15% yield is phenomenal. So is the monthly delivery schedule.

But if we want to retire on dividends alone, we need dividends that don’t appear to be one or two more disappointing earnings reports away from being cut.

Financial markets are currently only pricing in a short conflict in Iran, but the longevity and outcomes of warfare are often unpredictable. Analyst John Ficenec looks at different scenarios.

10th March 2026

by John Ficenec from interactive investor

Markets are currently pricing in a quick resolution to the conflict in Iran, and this has important implications for investors seeking to protect their savings and deliver positive returns in the year ahead.

Commodity markets bet on short war

All the headlines are focusing on a spike in the oil price, but a lesser reported number which predicts the future price of oil could be more useful for investors. Most press reporting focuses on the spot price of Brent crude oil. This is the price of one barrel of oil in dollars, produced from the North Sea, that is then used as a global benchmark to price oil commodity contracts around the world.

It is called a spot price because it is made up “on the spot” by trading desks in banks and commodity trading houses, based on supply and demand. This spot price is also for the immediate purchase of one barrel of Brent light sweet crude, with payment now and delivery on the same day. As such, even though Brent crude is produced in the North Sea, over 4,000 miles from Iran, it still reflects how the crisis there has impacted the global market for oil.

The spot price for oil today reflects that the Strait of Hormuz, through which about 20% of the world’s oil supply travels, is currently closed, and the Middle East, which produces about 30% of the world’s oil and closer to 50% of oil exports, is under threat. So, Brent crude shot up to almost $120 a barrel from $60 at the start of the year.

Source: TradingView. Past performance is not a guide to future performance.

Henry Allen, macro strategist at Deutsche Bank, has pointed out that the price for the same barrel of Brent crude oil, but for delivery a year in the future, has only increased to around $70. The almost $30 difference against today’s price is because commodity markets are betting this is a short-term conflict. Despite the damage to oil infrastructure, the futures price is predicting that oil production can return to normal within two months, and that a largely normal trade of oil and gas will resume through the Middle East.

Markets sigh not sink

That is why stock markets have only sold off slightly from record highs and not collapsed. The UK blue-chip FTSE 100 index has slipped as much as 6% lower since 27 February but is still up for the year. The drop is comparable to early November last year when the FTSE 100 fell 4.5% on Autumn Budget and growth fears. You’d expect a far greater fall if the current events in Iran resulted in oil and gas prices staying at these levels.

In the US, the S&P 500 index is only down 2.5% since 27 February and is now down 2% so far in 2026. This to some extent reflects that America with its own oil and gas production is insulated from a price spike. The same cannot be said for Asia where South Korea, China and Japan are more reliant on oil imports, which explains why stock markets in these regions are down 16%, 2% and 10% respectively.

What could trigger a sell-off?

Deutsche Bank’s Allen added that one of three conditions must usually be met to cause a larger sell-off, such as a 15% drop in the US S&P 500 in equity markets. The first is that oil and gas prices need to remain elevated for several months. The second would be that this results in a government response to combat inflation such as raising interest rates or slowing money supply. The third would be that the shock is enough to result in a meaningful economic slowdown. While the attacks across the Middle East move us closer to each of those requirements, none are currently met.

The best way to look at this is how investors can respond to each of the outcomes. Depending on the risk appetite of each investor, you can then make a more informed decision.

Scenario 1: short-term conflict, stagflation avoided

If the commodity markets are correct and the conflict is short term, with Trump declaring victory by his own defined terms, then the inflationary shock will be mild. Kallum Pickering, chief economist at broker Peel Hunt, thinks that despite significant disruption across all major economies, the likely impact will be modestly higher inflation from the summer onwards, which begins to fade by the end of the year.

This is against a backdrop of falling inflation. In the UK, the consumer price index (CPI) finished last year at 3.6%, and Pickering expects it to drop to 2.5% by the end of this year, but 0.3% higher than the 2.2% forecast before the war started.

The response to a slight increase in inflation is that central banks wouldn’t really change the direction of travel on policy, just tweak the timing. So, in the UK where the Bank of England had been expected to cut this month, they could delay the decision to later in the year. In the US, the Federal Reserve could also move their expected interest rate cuts to later in 2026.

Recent opinion polls have shown the war is unpopular in the US, and investors have come to rely on the so-called TACO trade as Trump Always Chickens Out. In this scenario, investors can take advantage of bargains as markets have oversold UK shares in sectors such as mining, holiday and leisure, energy reliant industrials, or those industrials exposed to the aviation industry.

Source: TradingView. Past performance is not a guide to future performance.

Industrials that are heavy energy users such as engineer Rolls-Royce Holdings  RR.

Melrose Industries  MRO

Weir Group WEIR would typically bounce back.

Miners like Anglo American AAL, Rio Tinto Ordinary Shares RIO and Antofagasta ANTO are also now cheaper on fears about growth in Asia.

Holiday groups easyJet EZJ, Jet2 Ordinary Shares JET2, InterContinental Hotels Group IHG, and International Consolidated Airlines Group SA IAG have all suffered a double whammy from higher oil prices and travel disruption.

Scenario 2: long-term conflict causes inflationary shock

If the conflict in the Middle East does escalate to boots on the ground and prolonged fighting, there are a number of clear outcomes for markets. Equity markets do not currently price in a long-term conflict and would be expected to drop at least a further 15-20% from current levels.

The two key factors would be a sharp rise in inflation, which would cause economic growth to slow, raising the prospect of stagflation.

Rajeev Sibal, senior global economist at investment bank Morgan Stanley, highlights that inflation usually passes through the system rapidly, taking only three months before growth begins to slow.

The team at Morgan Stanley expects that every $10 per barrel increase in the price of oil could result in inflation increasing around 0.30% in the United States, 0.40% across the Euro area, 0.30% in the UK, and 0.20% in China. Most of the current economic modelling was done with oil at around $70 per barrel, far below the current price at around $90 per barrel.

Depending on domestic oil production levels, oil reserves and state policy, each government can adapt to how this inflationary shock impacts growth within the economy. The United States would see a limited impact on growth from higher oil prices, while the drop in GDP from every $10 per barrel increase in the oil price would be 0.15% in the Euro area, 0.10% in the UK, 0.10% in Japan and 0.30% in China, according to initial estimates from Morgan Stanley.

The other important element to watch is how long the oil price remains elevated above the $70 per barrel that most of the current economic forecasts were completed. When Russia invaded Ukraine, it initially claimed the “special military operation” would take 10 days, we are now into the fifth year of hostilities.

In this scenario, investors would want to look at defensive options such as oil majors 

BP  BP.

Shell SHEL

and gold exchange-traded funds. A more complex shipping picture with rising prices should also help London-based ship brokers Clarkson CKN0 and Braemar BMS0

Given markets are still near all-time highs, raising some cash would be a good option.

Tailored approach

The issue right now is that there is a lot of noise about record oil prices and falling share prices, but longer term the market has taken a more measured approach. Forewarned is forearmed in this case and it would be foolish to decide on a headline.

Each investment decision should be made with a view to an individual’s ultimate goal and time horizon. While capital preservation is the starting point for all decisions, an investor soon approaching retirement would likely make different decisions to one with an investment horizon over five years who can ride out the ups and downs. As with all serious conflict the immediate impact is shocking and uncertain, but understanding what is already priced in and what the options are ensures a solid platform for making better decisions.

John Ficenec is a freelance contributor and not a direct employee of interactive investor

Energy: Tensions are rising in the oil markets. Brent gained nearly 10% this week to reach about $101 per barrel, while WTI, which is less sensitive to geopolitical friction, rose 6% to around $95. The continued blockage of the Strait of Hormuz obviously explains this price increase. Producers in the Persian Gulf can no longer export their crude oil normally, and their storage infrastructure is filling up rapidly. To deal with this lack of space, several countries are reducing production. This is the case for Iraq, Kuwait, the United Arab Emirates and also Saudi Arabia. Faced with this supply tension, governments are deploying emergency measures. The International Energy Agency announced the release of a record volume of 400 million barrels from strategic reserves. At the same time, the U.S. government suspended certain economic sanctions targeting Russian oil for 30 days, until April 11. It should nevertheless be noted that these measures, while temporarily easing the markets, do not solve the root problem. The use of strategic reserves is a short-term measure. A lasting decline in crude oil prices depends on one condition only: the reopening of the Strait of Hormuz. The market will keep prices elevated as long as crude flows do not resume through this area.

MarketWatch

VWRP is the comparison share for the SNOWBALL.

The current fcast for the next tax year starting in April for the SNOWBALL is £10,500

The current comparison value for VWRP is £151,899, not too shabby.

The comparison is to use the 4% rule, where it is recommended that you have 3 years of cash reserves to use when markets enter a periods of a known unknown. Total income would be of around £5,500

This is after a period of market out performance and although various market commentators think there may be another up leg, that is after the oil price stabilises, there are still a lot of unknowns in the market.