Mirador Real Advice Blog

Just One Thing... But Also Much More Than One Thing!

June 13, 2024

When I started in the investment industry over 30 years ago, we were encouraged to be everything to everyone; insurance agent, financial planner, investment manager, investment product specialist, and more.

Additionally, we were expected to provide investment advice for any client’s objective or desired investment style; growth, value, balanced, income, international and more. There was a kind of scarcity mentality that when you found a prospective client looking for advice, you wanted to do whatever they might think they needed so you could make a living providing any service or product.

Fast-forward to today, and for the last number of years, Mirador has become focused on just one thing; income with security of capital.  One reason is that this is what our current clientele wants, and this is what my family and I want now. I have always made sure that my personal investing is the same as what I do for my clients. We both need to be on the same side of the table with aligned goals, objectives and needs for the relationship to be successful. Another reason is the realization that you can’t be good at everything. You can do anything you want, but not everything. The era of the Renaissance man and the jack-of-all-trades was over long ago. It’s a different world now.


Target markets are larger and easier to reach because of mass marketing enabled by the internet – there is no scarcity of investors for very distinct investment service offerings. Today it is better to gain experience and expertise in a narrower field.  And it takes tremendous focus to become top-class in a very specialized field.

With all that said, Investing for Income is not something new to Mirador.  I built my clientele doing Investing for Income seminars in Calgary libraries in the 1990s and early 2000s. Then I branched out into a broader investment offering. So, this era for Mirador is a sort of back-to-our-roots development.

Mirador is focused on one thing, security of capital with income. That’s all we do. Mirador is the only full-service investment company actively managing investor’s capital for security and income and we do this with our proprietary Triopay programs.  

I spend a fair amount of time on the internet keeping abreast of what’s happening in the investment industry. What I have been noticing lately is a number of organizations pushing the “only one thing” mantra too far, and this results in a lack of diversification, which of course is risky and will not likely meet our need for security of capital.  

For example, there are organizations focused only on high-yield securities for income investors. The main reason that many securities have a high yield is that they have high risk. Although their income may seem attractive, when things get bad in the markets, these are often the securities that get beaten down the most.  

Mirador’s Equity Income component of Triopay does have a high-yield element that helps us to achieve our excellent distribution levels, but it is a small allocation of the overall Triopay program, keeping the total risk reasonably low. And when the markets start becoming negative, our high yield securities are often the first to get trimmed in order to lower equity exposure and protect the capital.

As another example, some income investing advisors deal strictly in fixed income using bonds. Most of the time these bond programs provide excellent security, but not the last few years as interest rates have risen. When interest rates rise, bond prices drop and hence so does the value of bond income programs. The Core Canadian Universe bond index as represented by the XBB ETF fell 24.9% from its 2020 high to its 2023 low. But even in times of more stable interest rates, bonds tend to provide mediocre income and their interest income is 100% taxable, leaving less net after-tax income in the investors’ pockets.  

Mirador’s Triopay fixed income allocation is currently invested in preferred shares that provide dividend yields greater than most bonds yield, and this income is tax-favoured because of the Canadian dividend tax credit. Preferred share prices do drop with rising interest rates, but because we are active investors, we change our allocations often.  In 2020 we dropped the preferred share fixed income allocation to 12% of the total Triopay program and hence reduced the damage of rising rates to Triopay over the last three years. With the topping of yields late last year we increased the preferred share allocation up to 25%, buying preferred shares with great yields and considerable price appreciation potential.


Other income-oriented investment advisors claim that dividend growth is the best and only way to invest for income. The main problem with this investment style is that it often takes a great deal of time to work out – sometimes decades!  I have seen stocks with 10-year dividend growth rates of over 1000%, yet they still only yield less than 2%. Remember that a 1000% increase of something that is almost zero, still is almost zero.  And if you are in my age group and want income now, you don’t want to wait decades for the yield on your investments to meet your income needs! That being said, Mirador’s Triopay does have a substantial dividend growth element, but it is designed to provide above-average current yields, plus good potential of increasing dividends in the near term. 

During my time on social media, the second largest number of posts I see are real estate advertisements claiming high yields – second only to hilarious cat videos! Many of the real estate ads have headlines claiming income greater than 10% and sometimes 20%. But if you look closely, most of them have fine print confessing that the claimed income percent is a “target return”, which is not necessarily, or even likely the actual results. And most of them use a structure that does not have good liquidity. One of the most important aspects of risk management to achieve security of capital is to make sure your investments are liquid – ensure they can be sold easily at any time at a fair price. Most of our security selection models start with screening out illiquid securities to increase the likelihood of holding securities that allow for speedy sells at decent prices if the markets turn negative. 

Real estate is an important sector of the investment world. When helping people with financial planning we encourage almost everyone to work towards home ownership, even if it means holding less assets at Mirador.  Also, Mirador’s Triopay invests in real estate. The Equity Income component of Triopay holds a number of Real Estate Investment Trusts (REITs). These are publicly traded stocks with excellent liquidity and above-average yields. Each REIT represents ownership in a diversified pool of properties. And using REITs allows us to further diversify by selecting not just residential, but commercial, and retail focussed REITs.  

There are also income investment products and services that only do Covered Call Writing (CCW).  Check our recent blog post on CCW. I will repeat here two of the most important factors for writing calls for income. Firstly, is to only write calls on specially selected qualifying stocks, not the whole market or complete index components like many programs do. And secondly, only write calls when the market and/or security stance is mildly bullish.


In other words, CCW is not a good “one solution for all times”. Mirador’s Triopay actively allocates between the CCW program and the market exposure program in order to optimize income and capital security.

Another popular investment topic out there on the internet is “how many securities should you own to be well diversified”. The most popular answer seems to be between 10 and 20. In Mirador’s case, that would be 10 or 20 in each of the above five income investing strategies for a total of somewhere around 50 to 100 securities. In fact, currently, the Canadian Triopay program holds 85 securities. This is what it takes for Triopay to be properly diversified. That’s a lot of securities for a person to hold in an individual account. The monitoring, transactions, and reporting would be ominous if this was done on your own in an individual investment account. That’s why we created our Unit Trust structure over 12 years ago. It allows for the complexity needed without overburdening our clients with reams of paperwork and higher expenses. The Unit Trust format has many benefits over mutual funds and ETFs, and we will speak to this in a future blog post.

So in conclusion, yes, at Mirador we do one thing “investing for income and security”, and we do that by actively applying many income investing strategies, not just one. Why are we the only full-service firm doing this? First and foremost is because it’s not easy or inexpensive.  It requires a lot of securities and active management accomplished using proprietary data-driven models. There are a lot easier ways to make a living in the investment industry, but this is what we do, we like doing it, we are good at it, and we have a wonderful group of happy clients who like what we do.

As always, phone me with any questions or comments using the number at the bottom of this blog page.

Stan Clarke

Investing for Income Believer