Retired Passive Income Investors: Consider BIP, GOLD and ALTY

Retirees looking for a little more passive income should consider the wider range of options available. Indeed, a combination of dividend-paying stocks, real estate investment trusts (REITs) and fixed income securities can be some of the most popular income-producing assets. However, they are not the only ones. In this piece, we’ll check in with just a few games that retirement investors can play alternative investments.

Indeed, alternative investments (think infrastructure, real estate, renewable energy assets and private equity) can give your portfolio additional diversification, additional income and lower market risk (think at lower beta).

While there are other non-income producing alternative assets worth hiding over the long term, such as precious metals, collectibles, cryptocurrencies and even art, such assets do not produce cash flows, making them less attractive options for retirees. investors who want supplemental income.

Without further ado, here are some ways that retirement investors can try to inject their portfolios with the power of alternative assets.

Key points about this article

• Alternative assets deserve a place in the portfolios of retirement investors.
• There is more than one way to shake up your income stream with alternative assets.
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ETF Global X Alternative Income

ETF Global X Alternative Income (NASDAQ:ALTY) makes it all too easy for retail investors to gain exposure to a wide range of alternative assets. The exchange-traded fund (ETF) pays monthly distributions and is designed to track higher-yielding alternatives while also balancing risks. Indeed, the fund’s high income potential is one of ALTY’s selling points.

With a massive distribution yield of 7.16%, ALTY stands out as a hidden gem for retirees who want a source of passive income outside of the wild world of stocks. The total expense ratio is 0.5%, which is pretty fair in my opinion considering the wide range of assets you’ll get exposure to from a single security.

The ETF is well-diversified across numerous asset classes, from real estate to infrastructure and even including preferred stocks, emerging market bonds (which tend to have higher returns due to added risk versus developed markets) and calls covered (an option). -writing strategy that trades stock price growth for premium income).

While the yield is generous, stocks have been quite a bumpy ride since the COVID pandemic began in 2020. But if you’re retired, capital gain potential matters far less than initial yield. I think the compromise is a useful one to make.

Brookfield Infrastructure LP

Infrastructure assets (think toll roads, terminals, ports, rails, and the like) are a fairly steady source of cash flow for retired investors looking to increase diversification. Furthermore, when recession hits, the cash flows generated by such critical infrastructure assets tend to be deeply resilient.

Even when a recession or, if not, a depression hits, such assets are still needed in a functioning economy. With that in mind, I would argue that Brookfield Infrastructure LP (NYSE:BIP) is one of the most undervalued alternative income-producing assets.

Shares of the name are yielding 4.8% at the time of writing. With a consistent track record of growing its distribution and a plethora of long-dated alternative assets focused on utilities, pipelines, data infrastructure and transportation, retirees can sleep comfortably at night collecting that steady quarterly distribution.

Barrick Gold Stock

As mentioned before, precious metals like gold do not produce cash flows. This is a major reason why Warren Buffett isn’t a big fan of the pretty yellow metal. While the metals themselves don’t cut you a check, some of their miners pay pretty handsome dividends every quarter.

Barrick Gold (NYSE:GOLD) is one of the most generous dividend-paying gold miners on the market. The stock is yielding just under 2% at the time of writing. As gold’s rally continues (gold flirts with $2,700 an ounce), we have to think that a nice dividend hike is just around the corner.

However, Barrick aims to increase its gold production by 30% by the end of this decade. If it can pull off the feat while gold continues to roar from lower interest rates, ABX stock looks like a bargain destined for new highs.

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