FYI: The recent rise in long-dated risk-free interest rates has hurt the performance of stocks that have high dividend yields. Below we have broken up the S&P 500 into deciles (10 groups of 50 stocks each) based on dividend yield. Decile 1 in the chart contains the highest yielding stocks in the S&P 500, while decile 10 contains the stocks with the lowest (or no) dividends.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/dividends-a-no-go/
Comments
http://awealthofcommonsense.com/you-should-hate-some-of-your-investments/
My divi payers are absolutely bringing up the rear YTD...but they lead the charge the last 5 years with about an 18% annual gain.
I am adding to them while they are hated.
From your article link: "My timing might not be perfect on my rebalancing, but timing the market is not the point. You’ll never get a surefire signal that now is the time to switch from one market to the next. That’s why is makes sense to spread your bets."
>>>Although the article is almost 2 years old, there are numerous valid points for consideration, as noted in the above "rebalancing" statement.
I am sure many of us (here) have some form of rebalancing, in particular; when a portfolio has enough "age" to have accumulated enough monetary mass to be able to be diversified as much as one chooses and that the rebalance is of consequence to positive outcomes. We don't rebalance any portfolio based upon a calendar period.
Rebalancing which causes the most "stress" for this house is what I will call the crossover/glide path period. This is the period when one thinks they have made the proper choice to move money from buckle "A" to bucket "B" and not much happens for a period longer than anticipated.
'Course the worst case scenario could arise when looking for those out of favor areas; and in particular when using something like a relative strength measure from charting.
We do view these and attempt to make notes about such events as too little or too much relative strength. To the low side of this strength pattern is that a "value trap" may be in place, as has been the case for some commodity sectors. One could buy on a "low" indicator and just wait for some action. How long the wait period is the problem, eh?
Our greatest test of rebalancing has been within the past 18-24 months. We have moved away from a bond heavy portfolio and more towards broad and narrow sector equity areas. So far, the intuition for this rebalance has been favorably positive.
Okay, just some rambling.......
Thanks for your contributions here.
Take care,
Catch