We’ve seen that investing for income is a challenging task, not just because investors have to juggle a bewildering array of different economic and credit-specific facts, but also because the market seems to be set up to add volatility and uncertainty over time. While understanding that buying fixed income is like selling an option, and that equities can provide an excellent balance to that asymmetry of return, putting these ideas to work in a portfolio is a different matter altogether. The ideal portfolio is one that provides an interesting income stream, but does not blow up at the first sign of trouble. Frankly, Jim Grant’s description of a good banker as one who “safely and profitably treads the middle ground” ...

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