NEW YORK ( TheStreet) - Sometimes it's hard to believe I'm 58. I feel great, I love my work and I am more productive than ever. But the white hair doesn't lie. I'm closer to the end of my career now than I am to 50. So my investment scheme should be changing. For decades I've been focused on capital gains. I would buy technology stocks, or any sector where prices were moving up. I defined that bottom line by the top line, the total value of my portfolio.
Stocks like Google ( GOOG) and even Amazon.com ( AMZN) have been great for young investors because they delivered price appreciation. Especially Amazon -- it's up 264% over the last five years. Wish I had some. Sometimes I have made mistakes. I fell in love with stocks and lost money. I lost money on Apple ( AAPL) that way. I fell in love with the market and lost money through the Great Recession. But I hung in and, overall, I'm ahead. Still, the tech sector is changing, just as my own investment goals are changing. A lot of tech stocks are no longer good ideas for young investors. They're for greybeards like me. Take Microsoft ( MSFT), for instance. Please. Lots of people are dumping on the stock, but given its dividend of 23 cents a share, that just means the yield is rising. When I last checked it was at 2.95%. That's better than what you will get on many 10-year bonds. Microsoft needs to earn about $2 billion/quarter to make that payout. It earns more than twice that, consistently. It's a safe dividend. If you bought Apple at its April bottom you were getting a similar yield, about 3%. Now, with Apple having risen in price, that yield is down to 2.44%. But you've got a nice fat capital gain, about 24%, as well. Tech stocks you bought for gains in your 30s are those you can buy for yield in your 60s. You can see this even more clearly in the oil patch, which I watched closely at my first job, way back in the 1970s, at the old Houston Business Journal. (The picture of me above appeared in one of their ads.)
Companies like Apache ( APA), which explores for and produces oil, are shares a young investor can buy and sell in fairly predictable patterns. This year it's been as low as $69 and is currently at $86. It takes work to time stocks like this, but an active investor can make money with lots of stocks in this way. On the other end of the age spectrum are stocks such Kinder Morgan LLC ( KMP). Kinder Morgan operates a network of pipelines and other "downstream" assets that are in high demand, because they get oil and gas to market cheap. It's down 5% this year, but its dividend yields 6.67%. An older investor can spend the cash and gets to keep the asset. At some point that will be how I move. I've got a few years left so the better my capital total, the fatter my retirement starts to look. But over time I need to be trading capital gains for yield. Stocks are still the best place to find yield. Lots of older investors have been burned by bonds and other "safe" investments because despite the income they've gotten, the equity value of those bonds has fallen. That's why many investors are jettisoning bond funds now. But an income investor, an older investor, can still find some fat returns. Since I assume you're not planning on eating cat food, you're going to be staying in a higher tax bracket. So consider municipal bonds, whose yields are tax-free, and especially those issued by muncipalities in your area, so you're free of state or local income tax - assuming you have those. Here's an example. Back in 2008 my hometown of Atlanta issued bonds to fund development of the Beltline, a network of bike and walking trails located on former railroad tracks around the city. They don't mature until 2031, the current coupon rate is 7.31%, and they're worth over $1.05 to the dollar. Plus if you live in the city that return is tax-free. That's good business. Despite recent bankruptcies in Detroit and elsewhere, municipal bonds remain one of the safest ways there are to lend money, with a very low default rate.
There will come a time when I'll be looking to do that kind of business. But I've still got some good stories in me. So while over time I'll be moseying my portfolio over in that direction, I'm still hoping for gains, for balance. That's the most important lesson of all, for any investor at any age: balance. Investment advisers and brokers make their money by maintaining the balance you need in your portfolio. The best ones earn that money, but with a little education you can still do all right by yourself. I have. At the time of publication, the author owned 100 shares of AAPL and 10 shares of GOOG. Follow @danafblankenhor This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.