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Old 09-09-2012, 02:17 PM   #41
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Some on this board include CEFs in their portfolios and many be mREIT...But most would only include highly leveraged and high yielding funds as a small component of their overall portfolio and many have planned for returns far less than 10% to meet their retirement income requirements so don't swim much in the high yield pond.
True, but high yield has a place in portfolio diversification for almost everybody. Some folks have it via the total bond fund or total stock market funds and don't even know it. For many people who have planned for normal market returns, the high yield portion of their portfolio has made the low interest rate environment a little easier to handle.
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Old 09-09-2012, 04:27 PM   #42
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I monitor my investments closely. Between stock apprication and my dividends I am up over 10% this year. I suggest you and anyone else go to Morningstat and check the posts of LordXot and Stormwatch17 over the past year.
Once i got this set up It only takes me about 2 to 3 hours per week to monitor these stocks.

I am taking in slighty over $1600 per month in dividends.


I am very interested in putting together a high yield portfolio. May I ask the total value of your portfolio? If you don't want to give it, that is fine; I just really want to know what your overall yield is. Thanks.

Also, business development companies can be very dangerous. TCAP can give a false sense of security as it was begun in 2007, and only had about a 6% loss in 2008, which is outstanding for a business development company as most of them did not weather the big crash well at all. I would make them only a small part of any dividend portfolio, if at all.
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Old 09-10-2012, 11:54 PM   #43
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The guys on the MorningStar income forum are enjoying our thread. See this link:

The Cult of XOT? - Morningstar


I particularly like the part where they say that our forum members think it's courting disaster to retire on less than $5 million in net worth. Well, count me in as one of those disasters, but I sure don't feel like one.

Maybe we should invite Lord Xot to join us, I think he's RE, don't know but suspect he's FI too. He may well enjoy our discussions.
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Old 09-11-2012, 06:36 AM   #44
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I particularly like the part where they say that our forum members think it's courting disaster to retire on less than $5 million in net worth.
I can't find that opinion anywhere in this thread. But I know that I feel far happier with an ER plan that uses 4% return than anything greater. High yield is a valid part of a portfolio, but I would not want to put all my eggs in that basket. I worry that people new to investing will be dazzled by 10% returns and make some dangerous AA decisions.
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Old 09-11-2012, 10:03 AM   #45
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I can't find that opinion anywhere in this thread. But I know that I feel far happier with an ER plan that uses 4% return than anything greater. High yield is a valid part of a portfolio, but I would not want to put all my eggs in that basket. I worry that people new to investing will be dazzled by 10% returns and make some dangerous AA decisions.

Nun, that quote about the "courting disaster" and " 5 Million " appears on the first post of the MorningStar thread, it is the OP's comments, and not what was lifted from this thread. Just below the sections that was lifted from this thread.
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Old 09-11-2012, 10:21 AM   #46
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aha..That is what I have been missing all this time.." some really good spread sheets"....how could I have missed that?
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Old 09-11-2012, 10:53 AM   #47
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Nun, that quote about the "courting disaster" and " 5 Million " appears on the first post of the MorningStar thread, it is the OP's comments, and not what was lifted from this thread. Just below the sections that was lifted from this thread.
Yes, exactly my point. The OP over on Morningstar seems to have pulled that number form somewhere other than ER.org
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Old 09-11-2012, 12:41 PM   #48
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They seem extremely self-assured. Hope that works out for them.
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Old 09-11-2012, 12:46 PM   #49
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Net worth Poll

I believe it was a semantic "dig" at this site as being an overly conservative closed minded retirement website that is not interested in learning new ideas unless they are relevant to people retiring with more than enough money to live on already. At least that is how I read that comment.

Personally, I found the discussion of the high yield topic at Morningstar informative, very well balanced and better than most discussions of financial matters here.
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Old 09-11-2012, 02:00 PM   #50
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Runningman,
I can identify with the sentiment, but there is no need to bring it here, I feel. It just gets us closer to a thread closure. I use high yield in my portfolio, so I am not in the camp that disparages the concept.
All the best.
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Old 09-11-2012, 03:06 PM   #51
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Net worth Poll

I believe it was a semantic "dig" at this site as being an overly conservative closed minded retirement website that is not interested in learning new ideas unless they are relevant to people retiring with more than enough money to live on already. At least that is how I read that comment.

Personally, I found the discussion of the high yield topic at Morningstar informative, very well balanced and better than most discussions of financial matters here.
My educated guess based on posts that I have read here is that if the poll asked $2,$3,$4 and $5 million rather than the range of $2-$5 that most of the responses would have been closer to the lower end of the range - but perhaps I am wrong.
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Old 09-11-2012, 06:58 PM   #52
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Net worth Poll

I believe it was a semantic "dig" at this site as being an overly conservative closed minded retirement website that is not interested in learning new ideas unless they are relevant to people retiring with more than enough money to live on already. At least that is how I read that comment.

Personally, I found the discussion of the high yield topic at Morningstar informative, very well balanced and better than most discussions of financial matters here.
Yes I get that as well. The dividend and income forum on Morningstar is probably close to the hearts of many on this board as it deals with dividends and income investing. I think the area of concern is that high yield investments should form only part of a balanced AA and that anything with 10% plus returns has inherent risks that must be understood and factor into your risk/return calculations.
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Old 09-11-2012, 10:21 PM   #53
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Yes I get that as well. The dividend and income forum on Morningstar is probably close to the hearts of many on this board as it deals with dividends and income investing. I think the area of concern is that high yield investments should form only part of a balanced AA and that anything with 10% plus returns has inherent risks that must be understood and factor into your risk/return calculations.
I like high yield just fine, but there are times you do not want to chase yield. When everyone else is doing it is a good time to stay away.
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Old 09-11-2012, 10:47 PM   #54
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Every few months someone shows up who has excellent returns because they stretch for yield. Sometimes it works; sometimes it doesn't. We never know until quite a bit later.

I believe that most of us would be better off if we filed these stories under "possible, but unlikely over the long term".

Ha
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Old 09-11-2012, 11:01 PM   #55
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Every few months someone shows up who has excellent returns because they stretch for yield. Sometimes it works; sometimes it doesn't. We never know until quite a bit later.

I believe that most of us would be better off if we filed these stories under "possible, but unlikely over the long term".

Ha
Remember the original John galt douche who bought tons of general motors bonds? That cannot have ended well.
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Old 09-12-2012, 07:23 PM   #56
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Remember the original John galt douche who bought tons of general motors bonds? That cannot have ended well.
I remember JG, but don't recall if he had GM or GMAC bonds.

A typical self-serving, knowing far less than my competent financial markets knowledge financial 'advisor' that was managing my grandmother's portfolio before I took over in 2005 had her buy a newly issued GMAC SmartNotes bond that matured in 2014.

During the 2008 meltdown, the bonds traded as low as $.48 on the dollar (with a 7 1/8% coupon). I knew that GMAC wasn't the same as GM, and that it was on (relatively) stronger financial footing, but still was nervous that they would follow the path that GM took. So I sold half of her position in the $.60s in 2009. Managed to makeup the lost ground by shifting the proceeds into some MLP pipelines that did well.

The bonds ultimately recovered, and when we exercised the death put feature after her passing last year, they were trading at around $.98 So he either ended up fairly well screwed, or decently well off (if he stayed the course with GMAC bonds).
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Old 09-12-2012, 10:55 PM   #57
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I remember JG, but don't recall if he had GM or GMAC bonds.

A typical self-serving, knowing far less than my competent financial markets knowledge financial 'advisor' that was managing my grandmother's portfolio before I took over in 2005 had her buy a newly issued GMAC SmartNotes bond that matured in 2014.

During the 2008 meltdown, the bonds traded as low as $.48 on the dollar (with a 7 1/8% coupon). I knew that GMAC wasn't the same as GM, and that it was on (relatively) stronger financial footing, but still was nervous that they would follow the path that GM took. So I sold half of her position in the $.60s in 2009. Managed to makeup the lost ground by shifting the proceeds into some MLP pipelines that did well.

The bonds ultimately recovered, and when we exercised the death put feature after her passing last year, they were trading at around $.98 So he either ended up fairly well screwed, or decently well off (if he stayed the course with GMAC bonds).
Low interest rates

From the link you can see they were 20 year GMAC bonds. A 4 percent withdrawal rate adjusted for inflation and reinvested in the bonds would be quite a tidy sum today I surmise.
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