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One of the biggest differences between amateur and professional investors is that professionals have a top-down, “big picture” view of their investment portfolios, while everyone else tends to have a collection of individual securities that struck their fancy at one time or another, but without much regard as to how they all fit together. It makes more sense to decide on your overall strategy first, and then choose the specific investments to park inside it.

The problem is that for any short-term span, stocks can’t be relied upon to provide investors with the total returns they’ve come to expect over the long run. There can be periods of 20 years or even longer—possibly much longer—when the total return from investing in the stock market is zero. For someone retiring at age 65, the prospect of a nest egg returning a goose egg for the next two decades is bone-chilling.

The creative accounting and potentially explosive use of derivatives at Fannie Mae and Freddie Mac are legendary, such that they now operate almost as hedge funds. Since investors believe that these agencies are too big to fail, their bonds are rated AAA, despite the inscrutability of their financial statements, their heavy use of derivatives, and the lack of meaningful oversight. It’s unclear whether anyone really understands what’s going on with Fannie Mae’s and Freddie Mac’s bond portfolios, yet the failure of these agencies would have far-reaching implications.

Over the past 200 years, the real growth in dividends has contributed only 0.8 percent of the stock market’s annualized total real return, compared with the 5 percent contributed by the dividends themselves. We think dividend investors are better off picking the stocks that are actually paying good dividends, not the ones that are raising them.

To meet your income needs, you’ll want to broadly diversify into four areas:

1. Real estate investment trusts

2. High-dividend stocks

3. Inflation-protected securities

4. Bonds

These are the four legs of the reclining Barcalounger chair that should provide you with a comfortable lifetime of income.