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Old 07-06-2012, 08:48 AM   #21
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Here's some info from BH:

Bogleheads • View topic - Bob's Financial Website - Move to new web host status update

Apparently he's moving things around but things didn't turn out as expected. Some pages are still available (static mode - read the latest posts) but there is no indication of if/when the info will come back on line...
Thanks but that is an old thread. Read other posts and it causes concern about everything being ok with Bob.
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Old 07-06-2012, 10:18 AM   #22
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Furthermore there were virtually no cuts in 2008/2009
other than the entire banking sector and many other companies.
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Old 07-06-2012, 04:45 PM   #23
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other than the entire banking sector and many other companies.
Regarding the banking secure, very true. And here were a few other non-banking companies that reduced theirs, but not that many.

Personally, my dividends were cut about 3%, but then the dividend yield of the portfolio as a whole recovered and started growing again.

Just as with any portfolio, you need to spread out your investments to limit your risks. For example, if you were 100% in bank stocks, you would be very unhappy.
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Old 07-06-2012, 05:20 PM   #24
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Bernstein's book has some interesting data about dividends.
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At no point in history of the US has real dividend stream fallen by more than 50% even during the depression... during the most recent financial crisis.. stock prices fell by more than 50%... dividends dropped by only 23% and only temporarily
My portfolio saw a bit over 10% loss in dividend income although there were so many changes it is hard to get an exact comparison.

He says you can reasonably add about 1/2 your dividends to your permanent (safe) retirement income .

The implications of this in today's environment is that current 2% dividend yield of S&P 500 is the equivalent of 30 year TIPs bonds with 1% yields in terms of safe income. The advantage of stocks is that can use the other 1% for spending on luxuries.
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Old 07-07-2012, 06:58 AM   #25
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other than the entire banking sector and many other companies.
Not one Canadian bank cut dividends in the crises. No Canadian top 5 bank has cut dividends since the 1930's depression. I know that things can change but all my Canadian bank holdings rank in the top 10 stongest banks in the world. Canada has fared much better than the US during the financial crises. It seems banking is something Canada does pretty well.
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Old 07-07-2012, 07:07 AM   #26
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This may be off-thread, but...

Anyone care to comment on a guaranteed 4%-8% bond dividend vs AA? I have a good AA but my bond/bond funds have been outplaying my dividend paying equities for so long...

With consistent 5,10 and 15 yr yield averages of ~7% (and a meesly 9% drop in 2008) I'm wondering why not just put the whole basket of eggs into a few of the notable bond funds.

A 7% guarantee or -2% to 13% volatility? I fully appreciate AA, but sometimes a bit of insanity takes hold and gets me wondering!
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Old 07-07-2012, 07:08 AM   #27
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It seems banking is something Canada does pretty well.
True - as an insider you would probably know about that better than most.
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Old 07-07-2012, 07:12 AM   #28
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This may be off-thread, but...

Anyone care to comment on a guaranteed 4%-8% bond dividend vs AA? I have a good AA but my bond/bond funds have been outplaying my dividend paying equities for so long...

With consistent 5,10 and 15 yr yield averages of ~7% (and a meesly 9% drop in 2008) I'm wondering why not just put the whole basket of eggs into a few of the notable bond funds.

A 7% guarantee or -2% to 13% volatility? I fully appreciate AA, but sometimes a bit of insanity takes hold and gets me wondering!
You might want to do a few FIRECalc runs with a 100% bond allocation and see how that fares vs. having 35% or more in equities. I think what you are seeing is nothing more than recency effect.
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Old 07-07-2012, 07:40 AM   #29
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You might want to do a few FIRECalc runs with a 100% bond allocation and see how that fares vs. having 35% or more in equities. I think what you are seeing is nothing more than recency effect.
Good point. That pesky inflation will invariably eat me up without growth even with current yields almost double my SWR
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Old 07-07-2012, 08:58 AM   #30
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...(snip)...
Anyone care to comment on a guaranteed 4%-8% bond dividend vs AA? I have a good AA but my bond/bond funds have been outplaying my dividend paying equities for so long...

With consistent 5,10 and 15 yr yield averages of ~7% (and a meesly 9% drop in 2008) I'm wondering why not just put the whole basket of eggs into a few of the notable bond funds.
...
Are you confusing bond capital gains (due to falling rates) with bond interest (dividends) ? One should probably focus on the SEC yield for the bond funds. A few from Vanguard at present yields:
Code:
Intermediate Term Treasury         0.64%
Inflation Protected Securities    -0.70% (yes, it's negative)
Total Bond Market                  1.96%
If rates go up these yields will be reduced. The mirror image of the excellent enhanced returns bond investors have had with declining rates. Then we'll really hear cries of anguish from the FI crowd.
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Old 07-07-2012, 09:10 AM   #31
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Originally Posted by Lsbcal
Are you confusing bond capital gains (due to falling rates) with bond interest (dividends) ? One should probably focus on the SEC yield for the bond funds. A few from Vanguard at present yields:
Intermediate Term Treasury 0.64%
Inflation Protected Securities -0.70% (yes, it's negative)
Total Bond Market 1.96%If rates go up these yields will be reduced. The mirror image of the excellent enhanced returns bond investors have had with declining rates. Then we'll really hear cries of anguish from the FI crowd.
This next 6 month cycle for IBonds could quite possibly be negative which would mean 0% interest for the cycle for me. I don't own inflation securities or TIPs but I am curious, if CPI is negative or flat, does that mean you are outright losing money on your investment since they are currently paying a negative rate?
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Old 07-07-2012, 09:21 AM   #32
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Are you confusing bond capital gains (due to falling rates) with bond interest (dividends) ? One should probably focus on the SEC yield for the bond funds. A few from Vanguard at present yields:
Code:
Intermediate Term Treasury         0.64%
Inflation Protected Securities    -0.70% (yes, it's negative)
Total Bond Market                  1.96%
If rates go up these yields will be reduced. The mirror image of the excellent enhanced returns bond investors have had with declining rates. Then we'll really hear cries of anguish from the FI crowd.
Looking at total returns for PIMCO 10 year: 7.09 total return, Pioneer 10 year: 8.04 and TRPrice High Yield 10 year: 8.93. TRPice Spectrum Income: 7.12.
Similar total returns for 3, 5 and 15 years.

Granted some of these have higher levels of risk but each has held their price (and yields) fairly steady for over/almost 20 years. All/most of these are within my IRA so cap gains are manageable.

Not included above, but I do track the SEC rates which are slightly lower.
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Old 07-07-2012, 10:04 AM   #33
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Marko, here is what has happened since 2000 to 5 year Treasuries which describes in general the entire intermediate bond market:



So we've had a great ride down in rates with big additions to returns because of price appreciation from declining rates alone.

I own PTTRX (Pimco Total Return) which you mentioned. Yes it has had a good 10 years. But that was the past of fairly high yields and declining rates.

Now notice the rising rate period of Mar 2004 to May 2006 in the chart. During this time 5 yr Treasuries went from 2.8% to 5.0%. PTTRX returned an annualized 2.4% during those 2 years. So although this was not a disaster it was really subpar for the 10 year period. That was starting from a 2.8% yield in 2004, but today's 5 year Treasury yield is only about 0.6%. So if we have an equivalent rising rate period expect it to be worse then 2004.
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Old 07-07-2012, 02:48 PM   #34
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Marko, here is what has happened since 2000 to 5 year Treasuries which describes in general the entire intermediate bond market:



So we've had a great ride down in rates with big additions to returns because of price appreciation from declining rates alone.

I own PTTRX (Pimco Total Return) which you mentioned. Yes it has had a good 10 years. But that was the past of fairly high yields and declining rates.

Now notice the rising rate period of Mar 2004 to May 2006 in the chart. During this time 5 yr Treasuries went from 2.8% to 5.0%. PTTRX returned an annualized 2.4% during those 2 years. So although this was not a disaster it was really subpar for the 10 year period. That was starting from a 2.8% yield in 2004, but today's 5 year Treasury yield is only about 0.6%. So if we have an equivalent rising rate period expect it to be worse then 2004.
Thanks for the chart and the insight!

I guess I"m more focused on my high yield funds (PRHYX and RPSIX) which, as corporate bonds are less impacted and the price is not inverse to the yield but more or less follows the market. Almost like a nice dividend paying equity.

The price and yields have been within a nice narrow range since about 1992.

I'm currently using these for income while I wait out a flukey market to spring on equities.
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Old 07-08-2012, 11:45 PM   #35
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A 7% guarantee ...
Um, this is not a guarantee. Interest rates have been falling for the last 30 years, and this has given a boost to bond returns. Interest rates are likely to start increasing sometime in the near future, so this is likely to be reversed in the future.
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