Author Topic: Blending Dividend Investing and Index Investing  (Read 41885 times)

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #50 on: April 28, 2015, 08:01:59 AM »
Okay, so what is Mr. Percentage doing? Im leaving my good deal alone that's what. Yes, over all I like that fund or I wouldn't have such a high percentage of my portfolio in it. Im a loyal person. American Funds have been good to me and have made me money. I will not undercut a perfectly good company for a possible point or two somewhere else.

Dividend purchasing well, Im buying Ford.. its got a 3.7% yield. It just did a recall. It's price isn't over inflated because Warren Buffet is sitting in it (GM). It has been around for over a hundred years. Im sure it will do just fine. Shit Im driving one. They must be doing something right.

But I must be fucking retarded cause Im not even going to look at the fundamentals.

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #51 on: April 28, 2015, 08:45:03 AM »
which is drawing down the least?......... BOOM!




frugalnacho

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Re: Blending Dividend Investing and Index Investing
« Reply #52 on: April 28, 2015, 08:52:26 AM »

Scandium

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Re: Blending Dividend Investing and Index Investing
« Reply #53 on: April 28, 2015, 10:03:55 AM »
Love this thread - it's providing great entertainment!
This is quite fantastic. I propose the tread is moved to wall of shame & comedy. And I beg mrpercentage to share more of his investing insight

theoverlook

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Re: Blending Dividend Investing and Index Investing
« Reply #54 on: April 28, 2015, 10:16:07 AM »
I'm just going to say, it's amazing to read coherent, research backed posts "refuted" by rambling stream of consciousness reactionary word salads.

Amazing but it can also be depressing.

Scandium

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Re: Blending Dividend Investing and Index Investing
« Reply #55 on: April 28, 2015, 10:25:42 AM »
I'm just going to say, it's amazing to read coherent, research backed posts "refuted" by rambling stream of consciousness reactionary word salads.

Amazing but it can also be depressing.

What are you talking about? These are all great! After a quick look back, my favorite might be: "Read Neitzche.. and numbers"

And many other classics quotes I would expect to find scribbled in feces on the wall of a mental institution.

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #56 on: April 28, 2015, 12:33:42 PM »
I'm done giving away million dollar ideas. I'm beating the street. Go ahead and copy fund managers with indexes. Me I'm fucking winning

matchewed

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Re: Blending Dividend Investing and Index Investing
« Reply #57 on: April 28, 2015, 12:34:45 PM »
Where's FreeYourChains when you need him/her...

Dodge

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Re: Blending Dividend Investing and Index Investing
« Reply #58 on: April 28, 2015, 12:44:04 PM »
I'm done giving away million dollar ideas. I'm beating the street. Go ahead and copy fund managers with indexes. Me I'm fucking winning

Question 1:  "Dividends crash less during a downturn, as evidenced by this AMECX chart."  Does this accurately portray your stance?

Yes or No?

frugalnacho

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Re: Blending Dividend Investing and Index Investing
« Reply #59 on: April 28, 2015, 12:45:04 PM »
I'm done giving away million dollar ideas. I'm beating the street. Go ahead and copy fund managers with indexes. Me I'm fucking winning

You're a total fucking rock star from mars.  Come on bro, you got tiger blood.

https://www.youtube.com/watch?v=9QS0q3mGPGg

theoverlook

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Re: Blending Dividend Investing and Index Investing
« Reply #60 on: April 28, 2015, 12:47:39 PM »
My free million dollar idea: get a good night's sleep and post sober.  I may or may not follow my own advice.

arebelspy

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Re: Blending Dividend Investing and Index Investing
« Reply #61 on: April 28, 2015, 01:47:00 PM »
WOW this thread delivered.

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arebelspy

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Re: Blending Dividend Investing and Index Investing
« Reply #62 on: April 28, 2015, 01:51:04 PM »
The one post I want to highlight in this thread is here:
I'll be the sacrilegious one who says you can beat the index with dividends and other components.  I defer arguments as to why this is possible to James O'Shaughnessy, author of What Works On Wall Street.  But I'll give you the short version.  A long time ago, the author found that companies that paid dividends outperformed.  He also found that companies that bought back their own stock or paid down debt (the three components of "shareholder yield") outperformed as well.  He further found that momentum investing outperforms simple buy and hold.

There is a fund that invests in the companies with the highest shareholder yield and adds an element of momentum investing to determine entry points.  That is Cambria Shareholder Yield (NYSEMKT:SYLD).  I bought shares of SYLD on 28MAY2013 and simultaneously recorded the event in my Motley Fool CAPS to track performance against the S&P index. 

Result per http://caps.fool.com/player/FVelociraptor.aspx?
S&P            26.71%
SYLD          32.97%
Advantage   6.26%

Expense ratio is 0.59% and I leave it to the reader to determine if that is more or less than 6.26% since June 2013.

Or you can listen to skyrefuge who insists the DGI folks have 'drank the Kool-Aid' and are blind to reputed under-performance.

Morningstar says this is a Mid-cap fund:

[ img ]

Comparing SYLD (orange), to the Vanguard Mid-cap index (blue), and the Vanguard total market index (green), during the time period you specified:

[ img ]

Mid-cap index: 38%
SYLD: 35%
Total market index: 33%

We see SYLD underperformed the Mid-cap index, and just barely nudged out the total market index.  So, your information is wrong.  In fact, it looks like your data is comparing an S&P500 price chart, to an SYLD total return (price + dividends) chart.  Sure enough, when I pulled up Vanguard's S&P500 price chart, I got a 27% increase:

[ img ]

So, not only are you using the wrong benchmark, it isn't even an apples-to-apples comparison, as your data is explicitly removing dividends from only the benchmark side.  Now, forgetting about SYLD for a moment, let's look at the general statement you're making:

"Companies that paid dividends in the past, ended up outperforming the market as a whole."

Since dividends are just another way to express returns, this statement is the equivalent of:

"Companies that had consistent returns in the past, ended up with more returns than the market as a whole."

That sounds like a reasonable statement to make.  How is that information actionable?  Shall I then invest money in the stocks which have performed well in the past, hoping they will continue to perform well in the future?  Alarm bells should start ringing on that one.  When you think about it, the whole concept sounds downright silly.  If you look at stocks which continually paid dividends over a long period of time, of course they will have beaten the market.  Because when companies are doing well...they continue to pay their dividends.  But it's the fact that the companies did well which caused them to outperform, not the dividends.

Taking that information, and extrapolating it into, "Therefore I should only buy dividend stocks!" is not just silly, itís illogical.  You can't look at a list of stocks which outperformed, note that almost all of them paid dividends over that period, then expect current dividend stocks to outperform as well.  Correlation does not imply causation.  Example:

------------------------------
Paying dividends are strongly correlated with stocks that outperformed.
Therefore, buying dividend stocks will result in me outperforming.
------------------------------

The above example commits the correlation-implies-causation fallacy, as it prematurely concludes that the same factor which leads to paying dividends, also causes outperformance.  A more plausible explanation is that companies which outperform, continue to pay their dividends, which thereby gives rise to a correlation. So the conclusion is false.

Not just because it was an epic blowout, but because it was addressing a more frequent poster than mrpercentage.

One who has a whole blog around these topics.  One who "ER'd" with a 10% WR or something like that.

So I'm hoping we'll get more serious answers/a real discussion.

So what I'm curious about, Mr. Raptor, is: did this post change your mind?  If not, why not?

I know we all have a tendency to dig in and stick with our previous beliefs, even when confronted with evidence to the contrary, via the Backfire Effect, but your fund underperformed via a comparable measurement, and you paid them extra in fees to do so.  So if you're sticking with that fund... why?
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mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #63 on: April 28, 2015, 02:05:42 PM »
You guys did sell me on something though.. YOU should stick with an index-- since my rambles present key details you always miss. You can't catch tuna with the same fishing pole without taking into consideration-- the tides- the season- the lure- the depth- the type of tuna you are going for. It's an art.

I have had too much kool aid here though. I think Im going to stick to the blog for a while. Deuces

matchewed

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Re: Blending Dividend Investing and Index Investing
« Reply #64 on: April 28, 2015, 02:11:03 PM »

Financial.Velociraptor

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Re: Blending Dividend Investing and Index Investing
« Reply #65 on: April 28, 2015, 02:39:07 PM »
The one post I want to highlight in this thread is here:
I'll be the sacrilegious one who says you can beat the index with dividends and other components.[snip]

Not just because it was an epic blowout, but because it was addressing a more frequent poster than mrpercentage.

One who has a whole blog around these topics.  One who "ER'd" with a 10% WR or something like that.

So I'm hoping we'll get more serious answers/a real discussion.

So what I'm curious about, Mr. Raptor, is: did this post change your mind?  If not, why not?

I know we all have a tendency to dig in and stick with our previous beliefs, even when confronted with evidence to the contrary, via the Backfire Effect, but your fund underperformed via a comparable measurement, and you paid them extra in fees to do so.  So if you're sticking with that fund... why?

I think I'm responding to rebel spy here.  Hard to tell with so many inline quotes and working from the little box on forum.

First: I didn't sell SVXY.  I did a quick calculation and at today's spot and current portfolio liquidation, SVXY makes up a 1.38% allocation for me.  I haven't even bothered to check the performance until just now.  So, no sell.  It just isn't material to me the way municipal bonds and a basket of written puts on various blue chips are.  It's just one of the places I park cash for the very long term when I have more than enough to fund my current lifestyle plus an (best guess) inflation buffer.   The better question might be might I add to SVXY if my cash situation allows in the future?  The answer is yes but a pair of CEF in muncipal bonds that trade below NAV (NIO/NEA) are *currently* more attractive to me and my needs.

The real question seems to be WHY (not?)  I simply am not impressed that the other researcher felt Yahoo! Finance had SVXY better characterized as I think a mid-cap and that it should be compared to a mid-cap index (the OP I think was asking about mixing yield and indexing and if that beat the broad market e.g. SP500?).  My reading of the prospectus indicates they invest in anything over 200M (so no micro-caps) with no upper limit.  Does that mean it is mid cap?  All the time?  Or just when the selection criteria favor mid-cap over small/large?  Allocations are driven by a combination of shareholder yield and momentum.  I'm not impressed by the momentum part even though O'Shaunessy found momentum also "Works on Wall Street."  The simple justification, is I expect companies that reward shareholders via the components of shareholder yield to outperform those that don't over a sufficiently long period of time (much longer than my current holding period.)  This is because I consider returning cash to shareholders a proxy for management's ethics.  E.g. they are giving the booty to owners instead of building private empires at their expense.

My blog (is that a topic now?) doesn't yet cover SVXY (not my highest conviction holding as evidenced by low allocation.)  I promote dividend growth (a subset of shareholder yield), insurance companies with a strong history of good underwriting, CEFs selling below NAV, and selling options for income.  These are the things that have worked for me and outpaced the S&P.  The options take is the most important part and was the driver of being able to ER and do so with a higher than normal WR.  That is, in upwards or sideways markets, I expect selling options for income on large stable companies to outperform the underlying equities.

My approach has been designed to beat the S&P which I considered my primary opportunity cost (what I what likely index to as an alternative.)  I have no doubts I could find an index that has beaten my approach since roughly 2009 (how about a biotech index for example?) when I began building my approach.  Same as one can find a lot of indexes that have beaten SVXY over the given time period.  My speculation (and it is based on a belief companies that put owners first are "better") is that SVXY (and my overall approach) will beat any sufficiently broad index of the US or World, while under-performing niche areas full of people who are smarter (or luckier) than I am.

Is not the original point of the thread to explore whether you could combine indexing and dividend investing?  I contributed the only morsel I had on that particular and narrow topic.  YMMV.



arebelspy

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Re: Blending Dividend Investing and Index Investing
« Reply #66 on: April 28, 2015, 02:44:42 PM »
Thanks for the thorough response, Raptor.  I appreciate it.

Your argument seems to boil down to me to:
1) It's such a small amount you don't care about, and
2) You don't think the comparison used to a mid-cap index is fair, because you don't think SVXY is mostly mid-caps.

(Correct me if I'm wrong, I don't mean to misstate you, just summarizing.)

The first I think is ridiculous.  If something is suboptimal, it shouldn't be part of your AA.  If it's not suboptimal, that's fine, but to dismiss it as "it's only X% of my portfolio" is poor reasoning, IMO.

The second I don't know enough about SVXY, or care to look into, but I'd accept it as a reasonable argument, if true.
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beltim

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Re: Blending Dividend Investing and Index Investing
« Reply #67 on: April 28, 2015, 02:50:52 PM »
Thanks for the thorough response, Raptor.  I appreciate it.

Your argument seems to boil down to me to:
1) It's such a small amount you don't care about, and
2) You don't think the comparison used to a mid-cap index is fair, because you don't think SVXY is mostly mid-caps.

(Correct me if I'm wrong, I don't mean to misstate you, just summarizing.)

The first I think is ridiculous.  If something is suboptimal, it shouldn't be part of your AA.  If it's not suboptimal, that's fine, but to dismiss it as "it's only X% of my portfolio" is poor reasoning, IMO.

The second I don't know enough about SVXY, or care to look into, but I'd accept it as a reasonable argument, if true.

I think you're missing the main argument, which was that Raptor thinks this strategy will work over the very long term.  Putting words into his mouth, it seems like a marginal underperformance to an index (if true) over a short time period isn't meaningful evidence that it doesn't work.

An analogy is suggesting that stocks return more than bonds over the long term, and sticking to that philosophy when in the first year of owning stocks bonds perform better.

arebelspy

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Re: Blending Dividend Investing and Index Investing
« Reply #68 on: April 28, 2015, 02:59:58 PM »
Fair enough.  I disagree that it will, but if you hold that it will, by all means, stick to it.  But make sure you're calculating the right things when you compare it, so you don't think you're 6% ahead of where you actually are.
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Financial.Velociraptor

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Re: Blending Dividend Investing and Index Investing
« Reply #69 on: April 28, 2015, 03:05:43 PM »
Thanks for the thorough response, Raptor.  I appreciate it.

Your argument seems to boil down to me to:
1) It's such a small amount you don't care about, and
2) You don't think the comparison used to a mid-cap index is fair, because you don't think SVXY is mostly mid-caps.

(Correct me if I'm wrong, I don't mean to misstate you, just summarizing.)

The first I think is ridiculous.  If something is suboptimal, it shouldn't be part of your AA.  If it's not suboptimal, that's fine, but to dismiss it as "it's only X% of my portfolio" is poor reasoning, IMO.

The second I don't know enough about SVXY, or care to look into, but I'd accept it as a reasonable argument, if true.

Arebelspy, you have me on point one.  Being irrational with 1% is still 'stupid is as stupid does'.  My point was more, I haven't been crying myself to sleep at night because my most beloved investing idea was savaged by a meanie on the internet using graphs.  I have a finite  number of hours in a day, I just haven't gotten around to even re-evaluating SVXY because I'm frying bigger (mostly options) fish at the moment.  I'll re-assess eventually, it just isn't a high priority item at 1.4% or so.

2. I think comparison to a mid-cap (or better a basket of mid-caps so we know the mid-cap presented wasn't cherry picked...) *might* be fair some of the time.  The prospectus gives the fund leeway to be anything from small cap to mega cap or anything in between so long as the selections 'win the shareholder yield race' and pass some sort of momentum criteria I never fully understood.  It was 3 and 6 month momentum so I didn't pay much mind.  Over the time period I'm thinking of, its irrelevant. 

Beltim is closer on point number two.  This is kind of like the Dual Momentum thread (which is more interesting to me right now) where one poster is focused on whether there is a logical reason for DM to work.  I think shareholder yield is a strong indicator of very long term performance (as found in What Works On Wall Street) and that the (year?) or so I've held doesn't mean much and b) comparing to a mid-cap over a very long period makes less sense than comparing to a broader index over a decades long period because that is what I perceive to be my opportunity cost for my active management approach.

The point of my original post was to convey what I knew to the original poster about mixing dividends and indexing (admittedly, very little)  Hindsight being 20/20 (and my memory better at the moment), I should have also noted there is an index of Dividend Achievers run by Vanguard with very low fees, VIG.  I have interest in that as well but haven't taken the time to read the prospectus like I did with SVXY and don't expect to have extra cash above and beyond what I want to direct to municipal bonds for at least a year or so.  So another non-priority item for my reading list. 

Captain_Burrito_Pants

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Re: Blending Dividend Investing and Index Investing
« Reply #70 on: April 28, 2015, 03:13:58 PM »
I thought this was about SYLD, where did SVXY come from?


arebelspy

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Re: Blending Dividend Investing and Index Investing
« Reply #71 on: April 28, 2015, 03:20:14 PM »
I thought this was about SYLD, where did SVXY come from?

Good question. 
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theoverlook

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Re: Blending Dividend Investing and Index Investing
« Reply #72 on: April 28, 2015, 03:25:22 PM »
SYLD vs SVXY - Sleight of hand?

Dodge wasn't a meanie, it's amazing how many people respond to data and graphs and actual hard numbers with emotion.  An investment performs or it doesn't.  FinancialVelociraptor claimed it outperformed by 6% but it either underperformed or was closer to 2% in it's advantage.  That's a part of a conversation.


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Re: Blending Dividend Investing and Index Investing
« Reply #73 on: April 28, 2015, 03:30:28 PM »
Is this thread a real thing or am I dreaming? Surely at least one of the posters in here is a troll...

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #74 on: April 29, 2015, 06:19:27 PM »
Okay I will let facts speak

take your time and actually look at the methods. The companies.. the Charts [earlier displayed] were to show the power of dividends.. thats all nothing more. I think they illustrated that well. Methods matter. End result is not always what counts. Im not a detail weenie. Im a big picture guy. Take that into consideration

I will let the truth speak for itself.

Exhibit A:


Exhibit B:

scottish

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Re: Blending Dividend Investing and Index Investing
« Reply #75 on: April 29, 2015, 06:59:24 PM »
But I have to ask, how can you get a meaningful performance comparison over only two years?    (I'm talking about the SYLD discussion)

Mr Percentage, what is your screenshot trying to tell us?

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #76 on: April 29, 2015, 07:07:05 PM »
Mr Percentage, what is your screenshot trying to tell us?

1. That large cap value is the focus. Also shows companies to start with for strait stock.

2. That if you have a lot of money Class A  are a pretty good deal. Lower over all fees and if you have a million no sales load.

Dodge

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Re: Blending Dividend Investing and Index Investing
« Reply #77 on: April 29, 2015, 07:52:30 PM »
Mr Percentage, what is your screenshot trying to tell us?

1. That large cap value is the focus. Also shows companies to start with for strait stock.

2. That if you have a lot of money Class A  are a pretty good deal. Lower over all fees and if you have a million no sales load.

Question 1:  You said earlier that AMECX is safer than the index during a crash.  Do you still believe this is true?

Yes or No?

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #78 on: April 29, 2015, 08:42:40 PM »
Mr Percentage, what is your screenshot trying to tell us?

1. That large cap value is the focus. Also shows companies to start with for strait stock.

2. That if you have a lot of money Class A  are a pretty good deal. Lower over all fees and if you have a million no sales load.

Question 1:  You said earlier that AMECX is safer than the index during a crash.  Do you still believe this is true?

Yes or No?

Unless you want to argue about interest rates it is the green line Dodge so you tell me. Its all relative really


h2ogal

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Re: Blending Dividend Investing and Index Investing
« Reply #79 on: April 29, 2015, 08:50:14 PM »
Hmmmm...

DavidAnnArbor

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Re: Blending Dividend Investing and Index Investing
« Reply #80 on: April 29, 2015, 09:04:14 PM »
Mr. Percentage the non-load adjusted returns for that mutual fund are worse than the Large Cap Value Index Fund that Vanguard provides, there are two of them VUVLX and VVIAX. Moreover based on this time frame as shown on your graph there's no advantage to a Value strategy, the S&P 500 Index outperforms the Value Indexes.

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #81 on: April 29, 2015, 09:04:56 PM »
when the market dips it dips less.. I wouldn't say safe per say.. but I think it buys time and at least it gives you dividends

perfect no.. but managed. I still prefer the idea of large cap value stock that pays high dividends. Companies I expect to survive a crash that pay a big dividend. I think that is essential for waiting for it all to come back. If the market crashes and interest rates rise no one is completely safe-- except maybe variable interest rate bonds because the protect the investment trade value-- and gold-- neither are doing good right now but if it crashes they will.


Dodge

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Re: Blending Dividend Investing and Index Investing
« Reply #82 on: April 29, 2015, 10:39:55 PM »
Question 1:  "Dividends crash less during a downturn, as evidenced by this AMECX chart."  Does this accurately portray your stance?

Yes or No?
when the market dips it dips less.

Question 2:  Do you acknowledge that AMECX is 70% stocks and 30% bonds?

Yes or No?
« Last Edit: April 30, 2015, 07:19:08 PM by Dodge »

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Re: Blending Dividend Investing and Index Investing
« Reply #83 on: April 30, 2015, 03:19:01 PM »
Im a big picture guy.

No, you're really not. That's ok, but you are definitely not a big picture guy. I have yet to see you articulate a 30,000 foot view of investing theories or principles. You've sat around and talked about why you're really smart for picking AAPL or a fund with a huge load. Those are details, not the big picture.

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Re: Blending Dividend Investing and Index Investing
« Reply #84 on: April 30, 2015, 06:55:31 PM »
AMECX is my defensive line-- I don't pay a load.
Apple and Disney are my wide receivers.

On a shit day like today Im glad I have AMECX.
But Im still optimistic. Im going to let everything ride and take advantage of of lower prices for long term investments.
Im not surprised either. Textbook season. Sell in May and go away. Glad I cashed out betterment 2 days ago. I will have cash to purchase.
What works for me may not work for everyone.

The danger in bonds are more for individual purchases I think Dodge. If you are willing to ride out the full term there isn't much risk.
I wish everyone the best of luck. Dividends have worked well for me.

Dodge

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Re: Blending Dividend Investing and Index Investing
« Reply #85 on: April 30, 2015, 06:57:18 PM »
AMECX is my defensive line-- I don't pay a load.
Apple and Disney are my wide receivers.

On a shit day like today Im glad I have AMECX.
But Im still optimistic. Im going to let everything ride and take advantage of of lower prices for long term investments.
Im not surprised either. Textbook season. Sell in May and go away. Glad I cashed out betterment 2 days ago. I will have cash to purchase.
What works for me may not work for everyone.

The danger in bonds are more for individual purchases I think Dodge. If you are willing to ride out the full term there isn't much risk.
I wish everyone the best of luck. Dividends have worked well for me.

Question 2:  Do you acknowledge that AMECX is 70% stocks and 30% bonds?

Yes or No?

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #86 on: April 30, 2015, 07:49:05 PM »
Jesus.. your plan is perfect Dodge. Implement it. You mother fucking genius!! Feel better?

Nice! If Apple is good enough for Cramer its good enough for me. I have other reasons in cash for the crash but Cramer is good enough for me.

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Re: Blending Dividend Investing and Index Investing
« Reply #87 on: April 30, 2015, 08:01:51 PM »
Jesus.. your plan is perfect Dodge. Implement it. You mother fucking genius!! Feel better?

Nice! If Apple is good enough for Cramer its good enough for me. I have other reasons in cash for the crash but Cramer is good enough for me.

Question withdrawn (agreed, rule #1).

I was really trying to bring you down the path of understanding your mistakes, as I believe anyone can learn this stuff, even when they are as hard-set against it as you are :)  Too bad you didn't play along.

In case any newbies in here are still following, and are interested in seeing how:

AMECX - American Funds Income Fund of America - 70% in 150 individual stocks, and 30% in 1320 individual bonds - 5.75% load fee + 0.57% fee

fared during the 2008-2009 crash against a 70/30 stock/bond index, with the standard funds recommended here:

VTSAX - Vanguard Total Stock Market Index - 3796 individual stocks - 0.05% fee
VBTLX - Vanguard Total Bond Market Index - 7477 individual bonds - 0.07% fee







Be careful not to spread misinformation mrpercentage.  There are lots of newbies here who might be tempted to drop their life-savings into a fund based on something you post (I've received many PMs, it happens).  It's ok to like AMECX, but we are doing a major disservice to the readers of this forum if we show them a 70/30 stock/bond fund, then compare it to a 100% stock index fund during a crash, and say they should "value the power of dividends. Especially in bad times." ... all the while pointing them towards a fund with a 5.75% load fee and 0.57% yearly fee.

AMECX is not special.  To the newbies, if you want stability, buy a Vanguard Lifestrategy fund with lots of bonds.  If you're really adventurous, make yourself a Three Fund Portfolio with the two funds I mentioned above, and:

VTIAX - Vanguard Total International Stock Index - 5905 individual stocks - 0.14% fee

It's easier than you think...
« Last Edit: May 01, 2015, 01:25:59 AM by Dodge »

milesdividendmd

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Re: Blending Dividend Investing and Index Investing
« Reply #88 on: April 30, 2015, 11:48:58 PM »
My take on the merit of  buying dividend paying stocks verses non dividend paying stocks is that doing this has historically exposed you to the value factor, which has been shown to increase investment returns over the broad market.

So if you want to increase your returns based on the validated presence of a  value anomaly, then you should simply invest in a true value fund, i.e. seek out the property  that has given your chosen strategy a performance boost in the past (The value factor) instead of seeking out a weak proxy for it (dividend stocks.)

Of particular concern now is that in the past purchasing dividend stocks has on average meant purchasing value stocks (i.e. dividend paying stocks have historically been sold at a discount to the whole market.)

At the current point in history however dividend stocks are trading at a premium to the broad market (a.k.a. they are not even a proxy for the value anomaly at this point.)

Buyer beware!

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Re: Blending Dividend Investing and Index Investing
« Reply #89 on: May 01, 2015, 01:07:53 AM »
Jesus.. your plan is perfect Dodge. Implement it. You mother fucking genius!! Feel better?

Nice! If Apple is good enough for Cramer its good enough for me. I have other reasons in cash for the crash but Cramer is good enough for me.

The fact that you ignored the main crux of my post proves my point.

PS Cramer, really? That's not strategy, that's listening to a TV personality.
PPS Dodge was asking you a question, not giving you a strategy. You ignored his question just like you ignored the "big picture" of my post.

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Re: Blending Dividend Investing and Index Investing
« Reply #90 on: May 01, 2015, 10:46:05 AM »
Be careful not to spread misinformation mrpercentage.  There are lots of newbies here who might be tempted to drop their life-savings into a fund based on something you post

This is pretty funny.  Any newbies out there who are extremely influenced by stream of consciousness ramblings, I just have one thing to say:  Don't do it. don't invest in individual stocks just because you saw them on talked about on TV or read about them in the WSJ.  Even if you "do your research", the fact is, you know very little compared to the people who work on this stuff for a living and can use supercomputers to access information before you can.  Did you read about the Twitter earnings leak last week?  So think about it realistically.  Can you really dedicate more time, effort, intelligence and energy than an Ivy League MBA that works full time for a hedge fund?  I knew this guy once his name was Phillip McCutchen and he graduated from Yale undergrad.  We used to play lacrosse together in the fall.  He was a helluva player, almost fearless out there, and man did he have a shot.  The guy was all out from minute one until minute 60.  Afterwards we'd go out to this bar on Lake Champlain called The Dock.  He'd always drink boilermakers.  The guy was totally hardcore.  I remember this one time, he got so drunk that he stripped off all his clothes on a bet and dove from the patio straight into the lake.  Everyone got a pretty good laugh about that.  He even had random patrons buying him drinks after that.  Of course he puked in the bushes, but Phil could always boot and rally.  Good ol' Phil.  He went on to Brown where he got his MBA and he now works at, I shit you not, Champlain Wealth Management.  Whenever I talk to him, he we always laugh about the old times of playing lacrosse and drinking boilermakers.  Diversification is the key.  If you concentrate on individual companies, you're taking on a lot of risk that you have absolutely no control over.  You know how they always have a disclaimer that investments are risky and can include loss of principal?  Well, that's literally true if you invest in individual stocks, but only theoretically true if you invest in the total market.  If the the market goes to zero, well, your money is going to be worthless anyway.  If your individual stocks go to zero, well, the rest of us will take a slight hit but keep coming back for another round.  Kind of like Phil when he played lacrosse and drank boilermakers.

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #91 on: May 02, 2015, 09:27:11 AM »
Hat is off to you Dodge. You are persistent. I don't believe that shows reinvested dividends though. Im only showing you what I do. I have to show you tools that I know. Your way may be better. Your way may be wiser.   Look, I know you can lose money on individual stocks. That just happens to be where the biggest gains are. You can fish with a net. I prefer a harpoon-- its more sporty. I prefer to hunt with a bow-- more sporty.

In truth-- I expect to see some loss in Disney because I don't plan to sell it-- EVER. I expect many peaks and valleys that will end at 25,000% when Im too old to use it. I do see some big peaks in the not too distant future though. You can't factor in the Hysteria that comes when people get a taste of the success that will be. They need to see smash the box office-- they will go nuts.

May the force be with you.

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Re: Blending Dividend Investing and Index Investing
« Reply #92 on: May 02, 2015, 12:15:27 PM »
Hat is off to you Dodge. You are persistent. I don't believe that shows reinvested dividends though. Im only showing you what I do. I have to show you tools that I know. Your way may be better. Your way may be wiser.   Look, I know you can lose money on individual stocks. That just happens to be where the biggest gains are. You can fish with a net. I prefer a harpoon-- its more sporty. I prefer to hunt with a bow-- more sporty.

In truth-- I expect to see some loss in Disney because I don't plan to sell it-- EVER. I expect many peaks and valleys that will end at 25,000% when Im too old to use it. I do see some big peaks in the not too distant future though. You can't factor in the Hysteria that comes when people get a taste of the success that will be. They need to see smash the box office-- they will go nuts.

May the force be with you.

You use a lot of words but you have yet to articulate a philosophy or strategy. Platitudes and appeals to celebrity do not constitute a philosophy.

Dodge

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Re: Blending Dividend Investing and Index Investing
« Reply #93 on: May 02, 2015, 12:17:01 PM »
Hat is off to you Dodge. You are persistent. I don't believe that shows reinvested dividends though. Im only showing you what I do. I have to show you tools that I know.

Great!  It's good to question what you see!  Never blindly believe what you see on the internet, especially if it seems contrary to the data you know.  Portfoliovisualizer.com says:



So let's test it!  Lets compare the data I presented, to the data and tools you know:





Compared to my data:



It seems clear to me that Portfoliovisualizer.com is indeed reinvesting dividends as they claim.  What do you think?
« Last Edit: May 02, 2015, 12:41:43 PM by Dodge »

milesdividendmd

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Re: Blending Dividend Investing and Index Investing
« Reply #94 on: May 02, 2015, 01:32:21 PM »
Dodge is right. Portfolio visualizer measures total returns including dividends. Not worth debating really

forummm

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Re: Blending Dividend Investing and Index Investing
« Reply #95 on: May 02, 2015, 01:58:55 PM »
Be careful not to spread misinformation mrpercentage.  There are lots of newbies here who might be tempted to drop their life-savings into a fund based on something you post

This is pretty funny.  Any newbies out there who are extremely influenced by stream of consciousness ramblings, I just have one thing to say:  Don't do it. don't invest in individual stocks just because you saw them on talked about on TV or read about them in the WSJ.  Even if you "do your research", the fact is, you know very little compared to the people who work on this stuff for a living and can use supercomputers to access information before you can.  Did you read about the Twitter earnings leak last week?  So think about it realistically.  Can you really dedicate more time, effort, intelligence and energy than an Ivy League MBA that works full time for a hedge fund?  I knew this guy once his name was Phillip McCutchen and he graduated from Yale undergrad.  We used to play lacrosse together in the fall.  He was a helluva player, almost fearless out there, and man did he have a shot.  The guy was all out from minute one until minute 60.  Afterwards we'd go out to this bar on Lake Champlain called The Dock.  He'd always drink boilermakers.  The guy was totally hardcore.  I remember this one time, he got so drunk that he stripped off all his clothes on a bet and dove from the patio straight into the lake.  Everyone got a pretty good laugh about that.  He even had random patrons buying him drinks after that.  Of course he puked in the bushes, but Phil could always boot and rally.  Good ol' Phil.  He went on to Brown where he got his MBA and he now works at, I shit you not, Champlain Wealth Management.  Whenever I talk to him, he we always laugh about the old times of playing lacrosse and drinking boilermakers.  Diversification is the key.  If you concentrate on individual companies, you're taking on a lot of risk that you have absolutely no control over.  You know how they always have a disclaimer that investments are risky and can include loss of principal?  Well, that's literally true if you invest in individual stocks, but only theoretically true if you invest in the total market.  If the the market goes to zero, well, your money is going to be worthless anyway.  If your individual stocks go to zero, well, the rest of us will take a slight hit but keep coming back for another round.  Kind of like Phil when he played lacrosse and drank boilermakers.

+1

tyir

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Re: Blending Dividend Investing and Index Investing
« Reply #96 on: May 02, 2015, 03:01:36 PM »
As an outsider to this thread, who's pretty amused by everything so far, I want to applaud you Dodge for your patience here.

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Re: Blending Dividend Investing and Index Investing
« Reply #97 on: May 02, 2015, 03:56:36 PM »
As an outsider to this thread, who's pretty amused by everything so far, I want to applaud you Dodge for your patience here.

I'm still floored that the dude refuses to articulate anything resembling a philosophy or strategy.

mrpercentage

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Re: Blending Dividend Investing and Index Investing
« Reply #98 on: May 02, 2015, 04:23:51 PM »
Oh for God sakes. I'm going to go against the grain here and recommend ishares. I suppose you keep bringing up vanguard because it's what you know. I will never switch my bulk to index personally. Cash mutual funds and stock for me. End of story.

Call it an experiment. I will post my total return % next April.

scottish

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Re: Blending Dividend Investing and Index Investing
« Reply #99 on: May 02, 2015, 04:52:59 PM »
It sounds like Mr Percentage buys stocks and mutual funds that his favourite TV characters like.   I may be making too much of the Cramer reference.

Mr Percentage, how do you identify the specific stocks and mutual funds that you invest in?