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If I Had Followed My Advisor's Advice - A Look At The Last Eight Years
Good question Derf and the answer I believe is 'who knows.' What I can say with a fair degree of certainty is that barring a dividend cut or elimination the portfolio's income will continue to increase no matter what the value of the equity components do. Those components I would expect will do no worse than the market in general i.e. up-down just like always and just like every other equity/fund/baseline etc..
FWIW, I have such a portfolio of dividend growth stocks. My portfolio was down approximately 2.98% on price alone. My 'income' from that portfolio was up >10% from the prior year. I realize that's just one years results but the income generated has been doing that for the last 8 years. I'll stick with it until it's broke.
@Derf- I think that what Mark is saying is that if you have constructed a portfolio to supply needed income, the short-to-medium changes in actual NAV are unimportant. That seems right to me.
Just for the heck of things...............this chart, of course; includes the dot.com melt, as well as the dark period of late 2007 through March, 2009 and the remainder of 2009 with the beginning recovery. Note: Stockcharts (per their web page) include all distributions, so; this chart is not NAV price only.
Just for the heck of things...............this chart, of course; includes the dot.com melt, as well as the dark period of late 2007 through March, 2009 and the remainder of 2009 with the beginning recovery. Note: Stockcharts (per their web page) include all distributions, so; this chart is not NAV price only.
To play devil's advocate a little... For one, of course the advisor would suggest a more conservative approach shortly after a meltdown of 2008's magnitude. Also, throw in a 60/40 or 50/50 mix into those charts.
I'm just goofing with the years, some funds and the resulting numbers. I'm away to the pillow for an early rise tomorrow; but give a few tickers for some funds you would like to compare.........as with the 60/40........my first easy choice is FBALX Same time frame???? Keep in mind that some data with not be available if the fund has not been in place for much time........If one enters "x" number of tickers, the chart will only look back wards to the youngest fund when comparing. Ok, I'm away and will check Thursday morning. Regards, Catch
I'm just goofing with the years, some funds and the resulting numbers. I'm away to the pillow for an early rise tomorrow; but give a few tickers for some funds you would like to compare.........as with the 60/40........my first easy choice is FBALX Same time frame???? Ok, I'm away and will check Thursday morning. Regards, Catch
Ya. I threw in Wellington VWELX and it fared better during the meltdown. Of course, PIMIX punched them all in the gut. Goodnight catch and thanks for the post
To be clear, I'm not advocating that anyone follow this portfolio. I merely offered what I felt to be an interesting illustration of one persons experience.
The question was raised regarding how fine and dandy this portfolio did over the years since the great recession but how did it perform in the years leading up to same. I don't know but ask yourself how your allocation worked out. My stocks have a combined beta of 0.7-0.8, or 20-30% less volatility then the S&P 500 if you prefer. On paper, if the market tanks I would expect my stocks to tank less. I can't guarantee that of course, it's just how it's supposed to work. The kicker is, even if they don't work that way my 'INCOME' from the portfolio doesn't suffer and as OJ mentioned/suggested that's mostly all I really care about. My bills continue to get paid with plenty left over for other pursuits.
Finally just so you know, my portfolio is not 100% stocks. It ranges between 70-80% with the remaining in primarily PIMCO CEF's. Included in that 70% stocks are my meager mutual fund holdings.
Hi @Mark Your post is of value, more so; for the young/younger investors who read at MFO. I suspect there are many who choose not to ask a question, nor express an opinion. This is natural, expected and acceptable. Hopefully, they will know more than they did before they read a given post. I still have paper documents going back into the late '80's providing return data for Fidelity funds. Today, I'm more inclined to use the charts I post to observe what happened during different event periods relative to a fund(s); sometimes going back to 1999. The amount of free data and publications available today is more than enough to allow a motivated person to learn the simple methods of keeping an investment portfolio to the plus side. Without having to be a trader, of which; I'm no longer inclined to perform, one's portfolio can outrun future taxation and inflation without being too complex or sophisticated. While I somewhat understand those who chase a yield or think they need to have some type of magic sauce fund; as with alternative, market neutral, long-short or whatever the newest algo may be; there remain many quality funds, etf's and CEF's to get the investing job done for one's portfolio. With this and keeping in mind that a "this time is different scenario is still in place" and that there are new niche investments that should be and are readily available; our highest priority remains total return, arriving from price or yield or both. We do our best to remain flexible and adaptable with our investment eyes wide open. My personal future sad point with all of this, is that sometime in the near future, I/we will forgo the gained knowledge and desire to "play" with our money and find a parking place, as with a fund like, FBALX . I'll be a grumpy S.O.B. for awhile, with this. Thank you for the thread and take care of you and yours, Regards, Catch
Comments
Derf
FWIW, I have such a portfolio of dividend growth stocks. My portfolio was down approximately 2.98% on price alone. My 'income' from that portfolio was up >10% from the prior year. I realize that's just one years results but the income generated has been doing that for the last 8 years. I'll stick with it until it's broke.
Good investing, Derf
Just for the heck of things...............this chart, of course; includes the dot.com melt, as well as the dark period of late 2007 through March, 2009 and the remainder of 2009 with the beginning recovery. Note: Stockcharts (per their web page) include all distributions, so; this chart is not NAV price only.
SPY compare to VDIGX ,Vanguard Dividend Growth, 2000-all of 2009
I'm just goofing with the years, some funds and the resulting numbers.
I'm away to the pillow for an early rise tomorrow; but give a few tickers for some funds you would like to compare.........as with the 60/40........my first easy choice is FBALX
Same time frame???? Keep in mind that some data with not be available if the fund has not been in place for much time........If one enters "x" number of tickers, the chart will only look back wards to the youngest fund when comparing.
Ok, I'm away and will check Thursday morning.
Regards,
Catch
Derf
The question was raised regarding how fine and dandy this portfolio did over the years since the great recession but how did it perform in the years leading up to same. I don't know but ask yourself how your allocation worked out. My stocks have a combined beta of 0.7-0.8, or 20-30% less volatility then the S&P 500 if you prefer. On paper, if the market tanks I would expect my stocks to tank less. I can't guarantee that of course, it's just how it's supposed to work. The kicker is, even if they don't work that way my 'INCOME' from the portfolio doesn't suffer and as OJ mentioned/suggested that's mostly all I really care about. My bills continue to get paid with plenty left over for other pursuits.
Finally just so you know, my portfolio is not 100% stocks. It ranges between 70-80% with the remaining in primarily PIMCO CEF's. Included in that 70% stocks are my meager mutual fund holdings.
Your post is of value, more so; for the young/younger investors who read at MFO.
I suspect there are many who choose not to ask a question, nor express an opinion. This is natural, expected and acceptable. Hopefully, they will know more than they did before they read a given post.
I still have paper documents going back into the late '80's providing return data for Fidelity funds. Today, I'm more inclined to use the charts I post to observe what happened during different event periods relative to a fund(s); sometimes going back to 1999.
The amount of free data and publications available today is more than enough to allow a motivated person to learn the simple methods of keeping an investment portfolio to the plus side.
Without having to be a trader, of which; I'm no longer inclined to perform, one's portfolio can outrun future taxation and inflation without being too complex or sophisticated.
While I somewhat understand those who chase a yield or think they need to have some type of magic sauce fund; as with alternative, market neutral, long-short or whatever the newest algo may be; there remain many quality funds, etf's and CEF's to get the investing job done for one's portfolio.
With this and keeping in mind that a "this time is different scenario is still in place" and that there are new niche investments that should be and are readily available; our highest priority remains total return, arriving from price or yield or both.
We do our best to remain flexible and adaptable with our investment eyes wide open.
My personal future sad point with all of this, is that sometime in the near future, I/we will forgo the gained knowledge and desire to "play" with our money and find a parking place, as with a fund like, FBALX . I'll be a grumpy S.O.B. for awhile, with this.
Thank you for the thread and take care of you and yours,
Regards,
Catch