As we step into 2025, many of us have likely set New Year’s resolutions—those annual promises to ourselves to live better, aim higher or focus on what truly matters. Whether it’s adopting a healthier lifestyle, advancing in your career, or spending more time with loved ones, resolutions reflect our hopes for the year ahead. According to Pew Research, about 30% of Americans make at least one resolution, with younger individuals often setting several.
But by now, many of us also know the truth: simply turning the page to a new calendar year doesn’t guarantee change. Resolutions often fade as the days fill with routine, and life pulls us back into familiar rhythms. Real change requires effort, intentionality, and a willingness to take action—qualities that can transform aspirations into reality.
While much of life will remain the same—bills to pay, meals to cook, and everyday challenges to navigate—you can choose to take control of your finances and make meaningful changes. Investing is a powerful tool, not just for securing your future but for aligning your financial goals with the life you envision.
Today, let’s dive into two strategies to help make 2025 a year of financial growth and stability, turning your resolutions into lasting results.
Pick 1: PFFA – Yield 9.2%
Virtus InfraCap U.S. Preferred Stock ETF (PFFA) is an ETF that actively seeks the best opportunities in the fixed-income sector, with a large allocation to preferred securities and a modest composition of baby bonds. PFFA comprises 217 holdings across a wide range of industries. The most significant sub-sectors are financials (28%), mortgage REITs (19%), and industrials (10%). PFFA’s asset composition had a 47.2% weighting in fixed-to-floating-rate securities, embodying the High Dividend Opportunities principles of a rate-agnostic portfolio.
With mostly variable rate leverage, PFFA is a significant beneficiary of rate cuts, allowing us to collect steady monthly dividends from the active management of a large portfolio of publicly traded preferreds and baby bonds. PFFA makes fixed monthly distributions of $0.1675/share, reflecting a 9.2% annualized yield.
Pick 2: ARCC – Yield 8.8%
Ares Capital Corporation (ARCC) is among the oldest publicly traded BDCs that maintains a highly diversified portfolio with 535 companies. While ARCC makes loans to a lot of different companies, its bread and butter are in the "upper middle market." The BDC’s average borrower has an EBITDA of $159.9 million/year, and the weighted average taking into account the size of ARCC's investment, is $297.3 million.
ARCC's credit quality has been historically strong, and it takes advantage of that strong credit quality to be aggressive with its equity positions. The BDC reported a non-accrual rate of 1.3% (as a % of cost basis).
With a 69% exposure to floating-rate assets, ARCC can be beneficial if rates remain above average for longer, but BDC has a proven track record of navigating challenging economic conditions while keeping shareholders happy.
Conclusion
As we look ahead to 2025, I'm excited about the opportunities the market will present and the personal achievements we can make through our resolutions. I encourage you to resolve to keep investing as a manageable and steady part of your life, without letting it consume you. Avoid the stress of overtrading, especially if it tends to create anxiety. Simplicity and a long-term approach often bring the best results.
When it comes to retirement, having a reliable source of income—whether through dividends or a mix of strategies—is essential for both financial security and peace of mind. For many, following our Income Method has made all the difference in reducing stress and ensuring a worry-free retirement. Take time this year to reflect on your past investing experiences, both financially and emotionally, and set resolutions that will help guide you to greater success and stability in 2025. Happy New Year, I wish you health, happiness, and success in the new year!
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