The SWAN Portfolio: How Dividend Aristocrats Like Procter & Gamble Help Retirees Sleep Through Market Crashes

Friday's tariff relief rally evaporated as Trump's 15% global tariff sparked sell-off.

The quick scan: Monday erased Friday's gains as the Supreme Court's tariff ruling escalated trade uncertainty rather than ending it. Trump responded by raising the baseline global tariff from 10% to 15% instantly. The EU rejected the hike, suspending its trade deal ratification. Anthropic's new AI automation tool reignited disruption fears across consulting and software sectors.

S&P 500: -1.04% to 6,837.75 – Technology and financials led declines. Walmart (+2.3%) bucked the trend
Dow Jones: -1.66% to 48,804.06 – Worst drop in over a month. American Express -7%, IBM -13% on AI fears. Nike and JPMorgan weighed heavily. Nvidia was a rare bright spot
NASDAQ: -1.13% to 22,627.27 – Oracle and Palantir -4%. Software stocks, payment processors, and consulting firms sold off on AI automation concerns.

What's driving it: Trump's 15% tariff under Section 122 emergency powers created policy uncertainty – Congress unlikely to approve beyond 150 days. Europe suspended US trade deal. Anthropic's consulting automation tools hit IBM, Accenture, Cognizant. Fed Governor Waller called rate decisions "close to a coin flip." Gold surged to $5,230.

Bottom line: Markets hate uncertainty more than bad news. For L-Plate Retirees with dividend portfolios, this volatility proves why SWAN strategies work. While growth stocks whipsaw on tariff headlines, Procter & Gamble and Coca-Cola keep paying dividends. Volatility is noise. Reliable income is signal.

Get Paid to Wait: The Dividend Strategy That Stops Panic Selling in Its Tracks

The scoop: If there's anything that helps a retiree sleep better at night, it's knowing they're financially secure. The single biggest factor that can impact how well you live in retirement is staying financially sound.

But here's the problem: most retirement strategies rely on selling shares to generate income. When markets crash, retirees are forced to sell more shares at lower prices to generate the same income. This sequence-of-returns risk can permanently reduce future portfolio growth.

The solution, according to 24/7 Wall St., is a "Sleep Well at Night" (SWAN) portfolio – a dividend income strategy built on quality companies that provide income stability without requiring you to check your portfolio daily.

The core insight is psychological. When your income comes from dividends, you don't need to sell shares during downturns. That eliminates panic selling at the worst possible time and protects long-term wealth. Instead of wondering whether you can maintain your lifestyle during bad quarters, you already know what cash flow is landing in your account.

This shifts the mindset. You're not chasing tickers. You're watching dividends land. This separates income investors from growth chasers.

What Makes a SWAN Portfolio

Three core principles define the strategy:

Quality: Companies with strong cash flow and durable business models. Realty Income (O) has raised its dividend for 30+ years, surviving recessions while paying shareholders monthly. It's nicknamed "The Monthly Dividend Company" for good reason.

Dividend reliability: Focus on Dividend Aristocrats – companies with 25+ years of consecutive increases. Coca-Cola (KO): 63 years. PepsiCo (PEP): 53 years. Procter & Gamble (PG): 69 years.

Think about that. Procter & Gamble has increased its dividend every single year since 1956. Through the oil crisis, dot-com bubble, 2008 financial crisis, COVID, 2022's crash. That's not luck. That's a business model so durable it can increase payments regardless of market conditions.

Diversification: Spread income across sectors. Consumer staples (Procter & Gamble), beverages (Coca-Cola, PepsiCo), REITs (Realty Income). Mix individual stocks with dividend-focused ETFs for broader exposure without tracking dozens of companies.

The Psychological Benefit

When markets crash, traditional retirees face crisis. Portfolio drops 30%. The 4% withdrawal rule forces selling shares to generate income. They're selling at exactly the wrong time, locking in losses and permanently reducing capital that could recover.

A dividend strategy changes this entirely. When markets crash, your portfolio value drops. But your dividend income doesn't. Coca-Cola doesn't stop paying. Procter & Gamble doesn't suspend payments. Realty Income doesn't skip distributions.

Your income stream remains stable. You cover expenses without selling shares. You don't lock in losses. Your portfolio remains positioned to recover.

"When you get paid to wait, you stay invested longer," the analysis notes. Dividend income removes the forcing mechanism that makes retirees sell during crashes.

Predictability reduces stress. When CNBC screams about a 500-point drop, you're not panicking because dividend checks are still coming. When media declares a bear market, you're not frantically checking balances because income hasn't changed.

The Companies That Make This Work

Realty Income (O): 30+ years of increases, monthly payments, 5.66% yield. Tenants include Walgreens, Dollar General, FedEx – businesses needing physical locations regardless of conditions.

Coca-Cola (KO): 63 years of increases. People buy Coca-Cola during recessions and expansions.

PepsiCo (PEP): 53 years of increases. Not just beverages – owns Frito-Lay, Quaker, Tropicana.

Procter & Gamble (PG): 69 years of increases. Tide, Pampers, Gillette, Crest, Bounty, Charmin. Products people buy regardless of market conditions.

These aren't exciting growth stocks. They're boring, reliable, cash-generating machines that have paid and raised dividends longer than most investors have been alive. That's exactly the point.

What This Looks Like in Practice

$1 million portfolio, retiree needs $40,000 annually:

Traditional approach: Follow 4% rule by selling shares. Markets crash 25% to $750,000. To maintain $40,000 withdrawal, must now sell 5.3% instead of 4%. Selling more shares at lower prices permanently reduces recovery ability.

SWAN approach: Build portfolio yielding 4% in dividends ($40,000 annually). Markets crash 25% to $750,000. Dividend income doesn't change – still receiving $40,000. Don't sell any shares. When markets recover, full $1 million benefits from rebound.

The difference compounds dramatically. Traditional forces capital depletion during downturns. Dividends preserve capital for full recovery.

Implementation

Start with the Dividend Aristocrats list – publicly available, updated annually. Screen for 25+ years of consecutive increases.

Layer in dividend-focused ETFs: Schwab U.S. Dividend Equity ETF (SCHD) tracks quality dividend payers. JPMorgan Equity Premium Income ETF (JEPI) combines dividends with covered call strategies for monthly income.

This isn't "get rich quick." It's "stay solvent through crashes and maintain your lifestyle." Those are very different goals.

If you're five years from retirement or already retired, SWAN deserves serious consideration. Not because it's exciting. Because it might let you sleep at night.

Actionable Takeaways for L-Plate Retirees:

• Screen for Dividend Aristocrats with 25+ year track records: Companies like Procter & Gamble (69 years), Coca-Cola (63 years), and PepsiCo (53 years) have survived multiple recessions while continuing to raise dividends. These aren't accidents – they're durable business models that prioritize shareholder income.

• Calculate your required yield and compare to current portfolio: If you need $40,000 annual income from a $1 million portfolio, you need 4% yield. Check your current holdings – are they generating that yield? If not, you're forced to sell shares for income, which creates sequence-of-returns risk.

• Consider mixing individual Dividend Aristocrats with dividend-focused ETFs: Individual stocks give direct exposure to specific companies (Realty Income's monthly payments, for example). ETFs like SCHD provide broader diversification without requiring you to research dozens of companies individually.

• Understand dividend income removes the "forced seller" problem: When markets crash 25%, growth portfolios force retirees to sell more shares at lower prices to maintain income. Dividend portfolios maintain income without selling anything, preserving capital for recovery.

• Prioritize dividend reliability over highest yield: A 10% yield from a speculative company that might cut dividends is worse than a 4% yield from Procter & Gamble that has increased every year since 1956. Reliability beats maximum yield when you're living on the income.

Your Turn:
When you look at your current portfolio, what percentage of your retirement income comes from dividends versus selling shares – and if a market crash happened tomorrow, would you be forced to sell at the worst possible time to cover your expenses?
Have you screened your holdings for dividend consistency (25+ years of increases), or are you chasing highest current yield without checking whether those payouts are sustainable through recessions?
If you could rebuild your portfolio today with "sleep at night" as the primary goal rather than maximum returns, would it look fundamentally different from what you currently own – and if so, what's stopping you from making that shift?

👉 Hit reply and share your thoughts – your answers could inspire fellow readers in future issues.

If this newsletter helped you understand that AI disruption fears might be overblown in timing even if not in direction – and that "sell first, ask questions later" often means selling quality companies during panic – consider supporting L-Plate Retiree on Ko-fi. Your support helps me keep translating market volatility into practical retirement investment reality checks.

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