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Old 03-28-2011, 10:37 AM   #81
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We should emphasize that a strategy of buying high quality companies with growing dividends is not the same as a high dividend approach, which last approach often gathers some pretty shakey companies.

Also, Swedroe's critique emphasizes the greater volatility of the dividend approach when compared to the quality bond approach. He then compares high dividend returns to returns of various other "value stock strategies", something he seems to have pulled out of a hat. He does not compare dividend returns to quality bond returns, he only contrasts risk which he accepts as identical to volatility. Implicit in the emphasis on volatility is that the investor must regularly go to portfolio sales for living expenses. But this is often not the case with dividend oriented investors on this board. They buy and hold, selling a stock only for quality or relative value considerations, not to gain cash for living expenses.

Ha
Thus adding manager risk (the guy/gal in the mirror) to the equation. TANSTAFL.

DD
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Old 03-28-2011, 11:58 AM   #82
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Thus adding manager risk (the guy/gal in the mirror) to the equation. TANSTAFL.

DD
I suppose that is true. But if you can trust yourself to care for severe trauma, design a circuit on which many million $$ will be spent, or manage billion $$ contracts or just drive down a two lane mountain road with your kids on board which many of us have done, couldn't you trust yourself to pick out 10-15 companies and keep track of them?

Ha
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Old 03-28-2011, 02:28 PM   #83
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...add in stuff like convertible bonds,....
One thing you may not have seen is MAPF, a preferred share fund run by a Toronto-based Canadian. His returns are amazing and in C$ which are not too shabby these days. See prefblog.com for details. He certainly earns his MER.

I also agree that convertibles are an interesting combo of good yields now combined with inflation protection. It is all I have been purchasing with the equity from some real estate sales before the decline.
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Old 04-01-2011, 11:22 PM   #84
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Also helps to be scanning for the occasional fat pitch, like the fluke Pen Fed 5% CD offer last year.
You just had to bring this up didn't you?
I opened a new account.
Got a credit card with penfed.
Opened a small CD.
Pulled every trick I could think of and still didn't get an invite to the 5% CD.
Envious of you guys that got in,
Steve
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Old 04-01-2011, 11:26 PM   #85
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You just had to bring this up didn't you?
I opened a new account.
Got a credit card with penfed.
Opened a small CD.
Pulled every trick I could think of and still didn't get an invite to the 5% CD.
Envious of you guys that got in,
Steve
I did not get an invite also.
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Old 04-02-2011, 08:41 AM   #86
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You just had to bring this up didn't you?
I opened a new account.
Got a credit card with penfed.
Opened a small CD.
Pulled every trick I could think of and still didn't get an invite to the 5% CD.
Envious of you guys that got in,
Steve
FYI in the UK banks are offering 4.4% on 4 year savings accounts (UK equivalent of CDs). I've noticed that fixed interest rates on saving/CD type
accounts tend to be higher in the UK than the US. As I plan to ER in the UK it looks like my cash bucket will be in a UK savings account. This has the added benefit of being in the local currency.
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Old 04-03-2011, 01:46 AM   #87
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FYI in the UK banks are offering 4.4% on 4 year savings accounts (UK equivalent of CDs). I've noticed that fixed interest rates on saving/CD type
accounts tend to be higher in the UK than the US.
With the UK's official inflation rate expected to pick up to 4-5% in the mid term, 4.4% before tax is not that good a deal (unless you have a positive view on the currency): Bank of England | Publications | Main Publications | Inflation Report | Latest Overview - February 2011
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Old 04-03-2011, 02:02 AM   #88
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The Credit Suisse 2011 year book has an interesting discussion on the relevance of yield on investment returns. They (and the academics quoted) looked at data from 21 countries, some going back 111 years (some for shorter periods) and divided the listed stocks into (i) those which paid no dividends (ii) those which paid low dividends and (iii) those which paid high dividends.

Accross the 21 countries surveyed, there was a fairly consistent conclusion that the high dividend stocks produced better returns and that those better returns were not explained by either tax effects or risk. In fact the higher yielding stocks were less risky than the low yield/no yield stocks.

https://infocus.credit-suisse.com/ap...20110324030332
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