Are Paranoid Income Investors Better Income Investors?

Comprehension of the price and/or income risk you may be taking every time you decide to allocate capital is a necessary part of due diligence. Sometimes you can identify a risk. Other times something may spontaneously occur or creep up that you hadn't considered -- the veritable, and hopefully rare, black swan event. While paranoia isn't generally perceived as a positive personal attribute, it may be preferable to bravado when it comes to stock investing.

While there are a host of ways to generate a "quality" income stream in today's volatile stock market, risk consideration should be an integral part of due diligence and portfolio maintenance. You shouldn't necessarily assume there is something disastrous lurking beneath the surface of every company you own. Still, managing a portfolio defensively, with perhaps a sense of paranoia, may not be the worst way to approach today's volatile and increasingly unpredictable equity market. And for those of you who think you've got it all figured out....when you least expect it, expect it.

Source: Seeking Alpha

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