High-yield investing has an obvious appeal for retirement, if your portfolio produces enough cash, you don't have to constantly sell shares to pay the bills. The problem is that a 9% yield usually comes with a catch. Either there's little growth or the market thinks the payout could eventually be cut.
I read something from Samuel Smith highlighting two interesting exceptions in PFFA and BSM.
PFFA ~9.9% yield
PFFA is an actively managed preferred-stock ETF that uses leverage to boost income. More interestingly, it has actually increased its dividend at a low-single-digit rate in each of the past five years. The trade-off is leverage and interest-rate sensitivity. Higher long-term rates could pressure the share price, and leverage can amplify losses during a market crash.
BSM ~9% yield
Black Stone Minerals owns oil and natural-gas mineral and royalty interests rather than operating wells or pipelines. That means relatively low operating and capital costs, low leverage, and exposure to energy production without many of the expenses producers face. BSM recently increased its distribution 7%, and analysts currently expect significant distribution and cash-flow growth through 2029. The catch here is commodity prices. BSM can hedge some of that exposure, but falling oil or natural-gas prices would still matter.
The bigger idea is what interests me. A portfolio yielding 8-10% doesn't necessarily need huge capital appreciation to work. If the distributions are genuinely sustainable, and can grow roughly with inflation, the income itself can do most of the heavy lifting.
But at a 9% yield, the question is why is the market paying me 9%, and am I comfortable owning that risk? PFFA and BSM are two interesting answers to that question.
I’d add one test: don’t ask only whether the distribution grew—ask whether NAV, unit value and inflation-adjusted total return survived while it was being paid.
A cash distribution is not economically different from selling shares if part of it is funded by leverage, asset erosion or payouts above sustainable earnings.
For PFFA I’d compare total return against an unlevered preferred-stock benchmark, then check net investment income coverage, borrowing costs and drawdowns. For BSM I’d treat the payout as variable commodity-linked income, not bond-like retirement income. BSM cut its quarterly distribution from $0.375 to $0.30 in 2025 when production growth disappointed, then raised it to $0.32 in 2026.
None of that makes either investment bad. It just means the honest claim is “potentially sustainable high current income with concentrated risks,” not “a growing 9% yield without crazy risk.” At 9%, the risk is always somewhere; the useful question is whether it is visible, diversified and survivable.