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I have written before that retirees should maintain a significant amount of their investments in diversified stock investments. Although I have been retired for 24 years, I still keep about 50% of my investments in stock market, almost all of it in diversified mutual funds.

I have always chosen funds that have a history of consistent earnings and dividends. I recognize that stock market prices fluctuate consistently over time. However, in down markets, stocks that have a history of consistent earnings and dividends retain their value much better than stocks that don’t.

Most of my investments are with Vanguard because of their low fees, consistent performance and excellent service. Here is a description of funds I have held for a long time, generally more than 10 years.

— Utility fund: 

I have invested in Vanguard’s Utilities Index Fund Admiral Shares (VUIAX) for more than 10 years. Initially, I invested $100,000 in the fund; over the last five years, I have taken out more than $100,000, and the remaining shares are valued at approximately $150,000.

As of this writing, the year-to-date (YTD) return for 2019 is 19.73%; the one-year return is 20.19%; the three-year return is 12.55%; the five-year return is 11.60%. The yearly expense ratio is 0.10%. The fund pays dividends each quarter.

The latest 30-day SEC yield is 3%. [Editor’s Note: According to Investopedia.com, the SEC yield figure is used to compare bond funds because it reflects dividends and interest earned less the fund’s expenses. The percentage shows investors what they would earn in yield over the course of a 12-month period if the fund continued earning the same rate for the rest of the year.]

When I purchased the fund initially, the 30-day SEC yield was approximately 3.4%. Since I have been holding the fund, a consistent dividend has been paid each quarter. Earnings have been consistent as well. When I purchased the fund, I thought I was making a very conservative investment, and I have been pleasantly surprised at how well the fund has performed.

Although this fund has a $100,000 minimum investment, you can purchase a Vanguard ETF with similar performance without a minimum purchase requirement.

 — Dividend fund: I have invested in Vanguard’s Dividend Appreciation Index Fund Admiral Shares (VDADX) for almost 10 years. The fund is composed of large, high quality corporations that have a blend of growth and value. The emphasis is on companies that have a track record of increasing their dividends.

As of this writing, the YTD return for 2019 is 22.06%; the one-year return is10.34%; the three-year return is 13.88%, and the five-year return is 10.98%. The 30-day SEC yield is 1.79% and the expense ratio is 0.08%. The minimum initial investment is $3,000. The fund pays a consistent dividend each quarter. As long as I have held the fund, a quarterly dividend has been paid.

 — Real estate: 

I have invested in Vanguard’s Real Estate Index Fund Admiral Shares (VGSLX) for approximately 10 years. The fund invests in real estate investment trusts that purchase office buildings, hotels, residential properties, healthcare facilities, retail facilities and other property.

Vanguard indicates that the value of this fund may be more volatile than more broadly diversified funds because its investments are only in real estate. Dividends are paid quarterly and have been paid consistently.

As of this writing, the YTD return for 2019 is 25.78%; the one-year return is 14.58%; the three-year return is 5.74%; the five-year return is 8.19% and the 10-year return 13.41%. The expense ratio is 0.12%. Minimum investment is $3,000.

Stock prices can be volatile, and I have no idea whether the most recent performance of the stock market in general, or for these funds in particular, will continue to do as well as they have recently. However, if interest rates remain low on a long-term basis, investments in funds that invest in companies that have a consistent history of high earnings and consistent dividends should do well on a long-term basis.

I have only discussed Vanguard funds because those are the funds I hold. Other reputable fund families have excellent long-term performance records as well. You can review them on Morningstar’s website to identify comparable investment opportunities.

Elliot Raphaelson welcomes your questions and comments at raphelliot@gmail.com.

© 2019 Elliot Raphaelson. Distributed by Tribune Content Agency, LLC.