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Learning, Sharing, and Teaching => Investor Alley => Topic started by: aperture on July 16, 2017, 08:22:25 AM

Title: Does anyone follow John Pugliano's investment advice?
Post by: aperture on July 16, 2017, 08:22:25 AM

I enjoy listening to John Pugliano's podcast Wealthsteading, http://www.wealthsteading.com/ (http://www.wealthsteading.com/) but we are 100% in index funds with Vanguard.  His latest podcast released Friday July 14 details his purchases of blue chip dividend generating companies which I believe he indicates he is selecting in place of bonds in his asset allocation.  His rationale is that because interest rates are low and likely to move up, bonds will lose value while these blue chips are likely to keep value and spit out dividends.  I cannot fault his logic, but I am presently sticking with my AA from my own IPS (which specifies 20% VBMPX).  Thoughts?

Title: Re: Does anyone follow John Pugliano's investment advice?
Post by: maizefolk on July 16, 2017, 10:36:50 AM

Well I agree that owning bonds in an extremely low interest rate environment doesn't make sense for me personally, but I disagree that dividend paying stocks are substitutable with bonds. If someone doesn't want to own bonds, they should make their peace with being 100% invested in stocks.

One of the arguments for owning bonds is it allows rebalancing into the stock market during crashes, because when the stock market crashes, bonds tend to stay the same or even increase slightly. However, the dividend autocrats behave a lot more like the total stock market index than like the total bond market index.

(https://i.imgpile.com/nwGL1u.png)

Blue = Vanguard total stock market index
Yellow = Vanguard total bond market index

Red and green = The first two companies from the alphabetical list of S&P 500 dividend aristocrats on wikipedia (3M and AFLAC).

Title: Re: Does anyone follow John Pugliano's investment advice?
Post by: DavidAnnArbor on July 16, 2017, 01:19:44 PM

Here's an interesting thread that includes a debate about whether or not being in 100% stocks is a good idea.

https://forum.mrmoneymustache.com/investor-alley/why-would-i-be-in-anything-other-than-100-stocks/

Title: Re: Does anyone follow John Pugliano's investment advice?
Post by: StudentEngineer on July 16, 2017, 02:01:11 PM

I'm about 50/50 right now between specific blue chip dividend paying stocks and the total stock market.  There is something about finding a great company at a good value and having them paying increasingly larger paychecks to you monthly/quarterly that I just cannot shake.  It seems logical to me, however I am diversifying a bit so that if my 'stock picking' goes awry I still have exposure to the entire market.