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So if you had an investment, and it went down 20%, would you get nervous or would you be willing to wait another 1-2 years to see if it came back? Some types of investments have temporary drops that last for years, but then return back to par value.

>> I have individual stocks that go down 20% (e.g., a number of REITS lately), and that's OK ... because I have confidence in the managers (e.g., Kimco, Vornado, Boston Pptys), and they are modest positions. But I do not want a situation in which a large chunk of my investments (say, half) dropped 20%. Chalk it up to a matter of personal taste.

One way of setting up something like this is a CD ladder or bond ladder. Your payouts stay the same (until a maturity) and you are guaranteed to get your principal back eventually, and you have options for cashing in early.

>> Yes, I have that. What I'm scouting around for is something that might provide a somewhat fatter income stream if I'm willing to stomach *a little bit* more risk. Hence my query about a buying a basket of preferreds. If the answer turns out to be "just stick with what you're doing," that's fine.
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