A list that generates income

[ERD50]

Turned out to be a darn good list: 43.8% XIRR after 2 years!! In the mean time, the S&P 500 had an XIRR of 19.5%.

Not only did the items in the list come through on dividends, they also had a whole bunch of price appreciation.

The original post, two years ago, suggested a dividend yield of 13.3%. Using the $180K initial investment, the yield was 13.1% the first year and 12.5% the next year ($23.6K and $22.5K, respectively, March to March).

Because of the price appreciation, the yield looks lower as calculated against today's pricing, but the payouts hung in there at the $23K level, similar to the historical values reported in the original post.

Maybe this was just a fluke for the kind of market we've had in the last two years, but boy, this list far exceeded my expectations. Don't tell ERD50 that dividend stocks "worked"

If you want to check my math:
https://drive.google.com/file/d/1RUvtBvzSROD8OZr_mtgU7XHO-fREy1OH/view?usp=sharing

I did a quick look, if I understand correctly, take a look at formula in Column S. Will change your XIRR on the list significantly.

Yes, math is off. Those pesky relative vs absolute addresses! Looks like COL S should be:

" =+R3*$B3 "

Well, I was going to say that any group of stocks ought to be expected to outperform ~ 50% of the time, but in this case, if I did my math right, I see:

7.25% Total Return for your "list", using simple (2018Val+Divs)/2017Val

While for SPY, I get:

18.50%

Sorry, no cigar for you, not even close. But it might "work" next year. Or the year after, or maybe...

-ERD50

 

[sengsational]

Yes, math is off. Those pesky relative vs absolute addresses! Looks like COL S should be:" =+R3*$B3 "

Thanks for checking my math (I updated the spreadsheet).

The XIRR now comes out to 19.9%. That aligns with $23K in growth, and $23.5K and $22.5K in dividends, divided by the starting value, divided by 2 to annualize over the two years [(23.6 + 23.5 + 22.5) / 180 / 2 = 0.193]

That's a much more comfortable answer, to me, anyway, as I would not expect that high level of price appreciation on stocks like these.

So much ado about nothing. The list ("the" list, not "my" list ) kept up with the S&P 500. And the S&P 500 probably has a lower beta.

 

[michelek]

NRZ is predicted to do well in a rising interest rate scenario.