Benchmark Needed for Extra-Safe Dividend Portfolio

[REWahoo]

Quote:

Originally Posted by NW-Bound ER really provides a lot of free time. One can travel only so much before it becomes dull. Soldering some fine-pitch chips and writing some firmware will get tiring, and overdoing it makes it too much like work, yet it does not pay like work. Cooking and eating only go so far. Badmouthing unscrupulous robot car makers can get one's blood pressure up, and that's not good either. So, that leaves plenty of time to look at what other investors are doing, and doing the reverse of what they do when the frenzy gets to its max. Just another pastime.

Or one can attempt the elusive ability to simply "be".

[NW-Bound]

There will come a time when one puts his stash in Wellesley/Wellington, and spends all his time contemplating his navel. That will come in due course.

Quote:

Omphaloskepsis or navel-gazing is contemplation of one's navel as an aid to meditation. The word comes from Greek omphalos (navel) + skepsis (act of looking, examination). Actual use of the practice as an aid to contemplation of basic principles of the cosmos and human nature is found in the practice of yoga of Hinduism and sometimes in the Eastern Orthodox Church.

[REWahoo]

Quote:

Originally Posted by NW-Bound There will come a time when one puts his stash in Wellesley/Wellington, and spends all his time contemplating his navel. That will come in due course.

Will we know you are there when your avatar lowers his head?

[redduck]

Quote:

Originally Posted by NW-Bound There will come a time when one puts his stash in Wellesley/Wellington, and spends all his time contemplating his navel. That will come in due course.

For me, I think that time has just about arrived.

[redduck]

Quote:

Originally Posted by ERD50 I'd keep it simple. If this was meant to be a 'safer' (less volatile) alternative to the Total Market, maybe just use something like a 60/40 AA of Total Market and Total Bond? Or 50/50? Or maybe reverse-engineer it to see if a specific AA would track your portfolio? -ERD50

Thanks. It finally came to me how to easily do the 60/40 and the 50/50. The Portfolio Visualizer ranks right up there with moneychimp.

I'm not familiar with the term "reverse-engineer." It sounds like it might be some sort of sexual position.

[NW-Bound]

[aja8888]

Quote:

Originally Posted by redduck I'm not familiar with the term "reverse-engineer." It sounds like it might be some sort of sexual position.

That term "reverse engineer" usually applies to the act of taking something apart to see what it is made of and how it works in order to make an exact and functional copy.

(aka, "it's made in China", or a "Chinesium" product)

[NW-Bound]

Hey, that's what I have been doing since I was 12, and I am not Chinese. However, I usually try to make it better, not just to copy it.

[Ronnieboy]

Quote:

Originally Posted by redduck I tried to follow everybody's suggestions. I took the first 10 (or 20 in one case) of my 24 dividend stocks in alphabetical order and pretended I was working with a $100,000 portfolio ( I have way more than that in the dividend portfolio). I'm only mentioning this because I need you to know this stuff isn't just fun and games (I guess maybe it's still mainly fun and games). Anyhow, I digress: I went to the Backtest Portfolio Asset Allocation website and here's what turned up using various dates (not deliberately, however). . I think Feb. 2018 is as far as I could go. This was with my first 20 stocks: The dollars represent the final balance for the time period Jan. 2015-Feb. 2018. My Portfolio:xxxxxxxxxxxxxxx $143,216 CAGR 12.01% SPDR S&P DIV. ETFxxxxxxxxxx$134,068 CAGR 9.70% Below are with my first 10 stocks but this goes from Jan 2015 to Dec. 2017 because I did something wrong with the backtester. My portfolio: xxxxxxxxxxxxxxx $147,412 CAGR 13.81% Van Total Bond Mktxxxxxxxxxx $106,775 CAGR 2.21% My portfolio: xxxxxxxxxxxxxxx $147,412 CAGR 13.81% Van Div Apprec. xxxxxxxxxxxx $134,187 CAGR 10.30% And, this is from Jan 2017 to Dec. 2017 My portfolio:xxxxxxxxxxxxxxxxxx $126,630 CAGR 26.63% Van 500 Indexxxxxxxxxxxxxxxxxx $121,668 CAGR 21.67% (As a bonus for oldshooter, my last listed portfolio had a Sharpe ratio of 2.96; compared to a Sharpe of 4.84). I have no idea what a Sharpe ratio is, so I'll look at the video after I rest.

Based on your numbers, the main question I want to ask: What are the 24 individual stocks you hold?

I am investing the the dividend growth model myself.

[redduck]

Sure. Be glad to. I'll send you a PM on Monday. In the meantime I suggest you read, if you haven't already done so, ERD50's post (#150) in the thread, DIVIDEND PAYING STOCKS.

[Ronnieboy]

Quote:

Originally Posted by redduck Sure. Be glad to. I'll send you a PM on Monday. In the meantime I suggest you read, if you haven't already done so, ERD50's post (#150) in the thread, DIVIDEND PAYING STOCKS.

Yes. I have read that thread and re-read that post specifically.

In theory, the example ERD50 gave works great. I prefer to do it the dividend way instead of the selling of shares way. If I have a choice.

[ERD50]

Quote:

Originally Posted by Ronnieboy Yes. I have read that thread and re-read that post specifically. In theory, the example ERD50 gave works great. I prefer to do it the dividend way instead of the selling of shares way. If I have a choice.

One of the points I made in that thread is that with non-dividend payers, you have a choice. You sell if/when you want.

It's the dividend payers that take that choice away from you. They distribute some of their value on their schedule, and you have no control over it.

But I'd be interested in seeing redduck's list - if he enters them in that portfolio website, he can save and share a link to it. Though we should expect a roughly 50-50 chance that any selection of stocks would beat the 'market'.

-ERD50

[redduck]

Since there has been such a over-whelming clamoring for my list of Dividend Stocks I thought that I would list them today.

I'm just listing the symbols because I'm guessing that someone will run the Portfolio Visualizer and publish the results as I don't do links on Sunday.

T, BUD, CAT, CVX, CSCO, EMR, XOM, GIS, T, JNJ, MCD, NSRGY. PEP, PG, RDS.B, SYY, UL, VZ, WMT, MSFT

[Luck_Club]

Quote:

Originally Posted by redduck Since there has been such a over-whelming clamoring for my list of Dividend Stocks I thought that I would list them today. I'm just listing the symbols because I'm guessing that someone will run the Portfolio Visualizer and publish the results as I don't do links on Sunday. T, BUD, CAT, CVX, CSCO, EMR, XOM, GIS, T, JNJ, MCD, NSRGY. PEP, PG, RDS.B, SYY, UL, VZ, WMT, MSFT

Thanks I was about to send a private message asking for it.

[Ronnieboy]

Quote:

Originally Posted by ERD50 One of the points I made in that thread is that with non-dividend payers, you have a choice. You sell if/when you want. It's the dividend payers that take that choice away from you. They distribute some of their value on their schedule, and you have no control over it. But I'd be interested in seeing redduck's list - if he enters them in that portfolio website, he can save and share a link to it. Though we should expect a roughly 50-50 chance that any selection of stocks would beat the 'market'. -ERD50

Yes but that is the plan, to have the dividend payers distribute that value to me like it is a paycheck.
One could theoretically argue that due to a series of unfortunate events that one might have to sell non dividend paying stocks at a time that isn't desired. Therefore being forced to sell to have monies....

It really doesn't matter, your post basically explained that there were two ways to do the same thing. Just like driving on the right hand side of the road (US) or driving on the left hand side of the road (UK). You still get to the same destination, can one be said it is better than the other?

[Ronnieboy]

Quote:

Originally Posted by redduck Since there has been such a over-whelming clamoring for my list of Dividend Stocks I thought that I would list them today. I'm just listing the symbols because I'm guessing that someone will run the Portfolio Visualizer and publish the results as I don't do links on Sunday. T, BUD, CAT, CVX, CSCO, EMR, XOM, GIS, T, JNJ, MCD, NSRGY. PEP, PG, RDS.B, SYY, UL, VZ, WMT, MSFT

Thanks for the info-

Great list, I have 18 of those already But what are the other 4...

[ERD50]

Quote:

Originally Posted by Ronnieboy ... It really doesn't matter, your post basically explained that there were two ways to do the same thing. Just like driving on the right hand side of the road (US) or driving on the left hand side of the road (UK). You still get to the same destination, can one be said it is better than the other?

In my posts in that thread, I wasn't focused on one being 'better' than another. I was just providing a counter (with data), that div payers had some significant special attributes ('safer', lower dips in bad times, etc) over the Total Market. The charts didn't back those claims up.

But there also didn't appear to be anything 'wrong' with the Div Payers, they did fine. Though they might cause increased taxes, depending.

-ERD50

[ERD50]

Quote:

Originally Posted by redduck Since there has been such a over-whelming clamoring for my list of Dividend Stocks I thought that I would list them today. I'm just listing the symbols because I'm guessing that someone will run the Portfolio Visualizer and publish the results as I don't do links on Sunday. T, BUD, CAT, CVX, CSCO, EMR, XOM, GIS, T, JNJ, MCD, NSRGY. PEP, PG, RDS.B, SYY, UL, VZ, WMT, MSFT

OK, curiosity got the best of me.

Well, like I said, I'd expect any pick of stocks to have ~ 50-50 chance of outperforming the market. And these picks didn't do it. Not for the 10 year period. Charts and details here:

https://goo.gl/pHVAvM ( 10 year )

[EDIT: not quite 10 years...

Note: The time period was automatically adjusted based on the available data (Aug 2009 - Feb 2018) for the selected asset: Anheuser-Busch Inbev SA (BUD) ]

Not only did the "div-payers" under-perform in the "Total Return" view, they didn't provide any more cash flow (divs) than VTI most years, and the 'worst years' were worse than VTI.

What's the attraction again?

Portfolio    Initial        Final        CAGR    Stdev    Best Year    Worst Year    
VTI -----    $1,000,000    $3,295,275     14.90%     12.45%    33.45%        0.36%        
DIV Picks    $1,000,000    $2,722,486     12.38%     11.02%    23.21%       -4.05%

-ERD50

[NW-Bound]

Quote:

Originally Posted by Ronnieboy ... Just like driving on the right hand side of the road (US) or driving on the left hand side of the road (UK). You still get to the same destination, can one be said it is better than the other?

As long as one does not swerve back and forth?

I have both dividend and growth stocks in my portfolio. And I trade them when I feel like it.

[samclem]

One thing to be aware of: in selecting stocks that pay high dividends, it is easy to wind up with a portfolio that is heavily skewed toward a few market sectors (financials, utilities, etc). The reduced diversification leads to more exposure to risks that disproportionately affect those sectors (interest rates, RE prices, etc.)
Some people who had constructed "safe" portfolios of dividend payers discovered how heavily tilted they were toward financials in the 2008 meltdown.