All figures as of Oct 21, 2026. Hypothetical backtest using daily prices and distributions from Oct 31, 2007 through the Oct 21, 2026 close.
What This Test Is
Many "$X a month" portfolio builds are shown only over recent years. This one was bought at the worst possible moment, the October 2007 stock-market top. It was then held through the 2008 financial crisis, the 2020 COVID crash and the 2022 rate shock.
The book holds eight income payers in equal amounts. Two are dividend stock ETFs (VIG and DVY). The others are a real estate company (O), a pipeline company (EPD), a lender to small businesses (MAIN), a utility fund that borrows to invest (UTG), a preferred-stock ETF (PFF) and a long-term Treasury bond ETF (TLT). Each of these corners of the income market reacted to the three crashes in its own way.
A retiree cares about two separate questions. Did the monthly check keep coming? And what happened to the balance? The check held: in calendar-year terms, income never fell more than 5.3% from one year to the next. The balance fell by almost half in 2008–09. The chart above shows both: the income line barely dips in 2009 and 2020, while the balance line drops off a cliff each time.
Plain-English Glossary
- REIT (real estate investment trust): a company that owns property and has to pay out most of its taxable income. O leases buildings to tenants on long contracts and pays monthly.
- Partnership (MLP): a business that is taxed as a partnership rather than a corporation. EPD runs pipelines and processing plants and pays quarterly distributions.
- BDC (business development company): a company that lends to and invests in mid-sized private businesses. MAIN pays a regular monthly dividend plus a supplemental dividend each quarter. Supplementals are extra payments the company can stop, and it did in 2020.
- Closed-end fund: a fund with a fixed number of shares that trade on an exchange. Its price can drift above or below the value of what it owns. UTG holds mostly utilities and uses borrowed money (leverage).
The Method
- $900,000 split equally across 8 holdings, $112,500 each, bought at the Oct 31, 2007 close.
- Every distribution is spent as cash. Nothing is reinvested, the book is never rebalanced, and taxes are ignored.
- Balance means the market value of the shares.
- Distributions are counted by ex-date (the cutoff date for receiving a payment) and assigned to the month they were declared for.
What the Book Pays Today
At Oct 21, 2026 prices, a fresh $900,000 split the same way pays about $47,710 a year, or roughly $3,976 a month, a 5.30% trailing yield. Trailing yield here means the last 12 months of distributions divided by today's price. It describes past payouts, not future ones.
| Holding | What it is | Weight | Capital | Price | Trailing yield | $/yr | Avg $/mo |
| VIG (Vanguard Dividend Appreciation ETF) | Dividend growers | 12.5% | $112,500 | $243.66 | 1.50% | $1,683 | $140 |
| DVY (iShares Select Dividend ETF) | High-dividend stocks | 12.5% | $112,500 | $159.39 | 3.35% | $3,770 | $314 |
| O (Realty Income) | Net-lease REIT, pays monthly | 12.5% | $112,500 | $55.35 | 5.86% | $6,596 | $550 |
| EPD (Enterprise Products Partners) | Pipeline partnership | 12.5% | $112,500 | $36.59 | 6.03% | $6,780 | $565 |
| MAIN (Main Street Capital) | BDC, pays monthly + supplementals | 12.5% | $112,500 | $53.30 | 8.12% | $9,139 | $762 |
| UTG (Reaves Utility Income Fund) | Utility closed-end fund, uses leverage | 12.5% | $112,500 | $34.68 | 7.04% | $7,915 | $660 |
| PFF (iShares Preferred & Income Securities ETF) | Preferred stocks | 12.5% | $112,500 | $28.82 | 5.66% | $6,370 | $531 |
| TLT (iShares 20+ Year Treasury Bond ETF) | Long Treasury bonds | 12.5% | $112,500 | $80.24 | 4.85% | $5,456 | $455 |
| Total | 100% | $900,000 | 5.30% | $47,710 | $3,976 |
This is one hypothetical portfolio used to illustrate a backtest, not a suggested allocation or a recommendation. Suitability depends on individual objectives, risk tolerance, tax situation, time horizon and broader portfolio construction.
Yields are calculated as trailing-12-month distributions divided by the Oct 21, 2026 price. Other sources may use a different method and show a different figure. The rows don't add up exactly to the totals because each line is rounded to the nearest dollar.
- Scaling: at today's yields, the same mix pays about $442 a month per $100,000. A hypothetical $500,000 version pays about $2,210 a month, and a $1.2 million version about $5,300.
- MAIN's mix: $2,533 of MAIN's $9,139 comes from four $0.30 supplemental payments, not the regular monthly dividend. Supplementals are the part MAIN can stop, and it did stop them in 2020.
- Lumpy months: VIG, DVY and EPD pay quarterly, so monthly totals swing. Quarter-end months bring in the most.
