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-   -   Poll:Income/dividend vs total return portfolio (http://www.early-retirement.org/forums/f28/poll-income-dividend-vs-total-return-portfolio-61455.html)

bigla 05-18-2012 04:35 PM

Poll:Income/dividend vs total return portfolio
I have been a total return guy but becoming interested in going to a income/dividend portfolio. I searched and the was no poll that I could find except one that used total return vs a TIPS + 30% equity portfolio.


foxfirev5 05-18-2012 05:43 PM

I voted for the income/dividend portfolio yet I have both. My DW and I have Roth accts which consist of Wellington, Wellesley, Reit Index and High yld Corp bond and High Dividend yield. Our IRA's and 401k consist of a mix of stock and bond funds, mostly index, with a planned total return distribution in retirement.
This goes against the conventional wisdom of placing your highest potential growth investments in a Roth account. However our objective is to draw only dividends from the Roth with no RMD down the road. This can then be passed on to our heirs.
The IRA's and 401k will be drawn down at approx a 4% rate using a TR method with rebalancing to maintain the AA.

Midpack 05-18-2012 06:38 PM

I've always been a total return investor mostly for tax reasons, heavily favoring tax efficient funds. I'll continue to choose funds such that ordinary dividends are equal to or less than withdrawals annually to minimize taxes.

truenorth418 05-18-2012 07:26 PM

I have a customized bucket strategy. I keep a combination of high dividend stocks and high yield corporate bond funds in my taxable accounts bucket. My tax deferred 401(k) and IRAs bucket usually consists of stock funds and strategically chosen individual issues, the goal being to drive capital growth beyond the rate of inflation. I wish there were better high dividend choices at the moment and I wouldn't mind if the market dropped back a bit to uncover more yields in the 4% range. Hopefully the 15% tax rate status for qualified dividends will continue as well.

bigla 05-18-2012 08:27 PM

DW's and my portfolio are all IRA with small Roths. I do have 13.5% of our total portfolios in 2 Bank Preferred's ETFs which have a yeild of about 7%. I have including these 2 ETF a 40 equity/60 fixed income portfolio.

Animorph 05-18-2012 10:11 PM

Total return for me. Better diversity, better taxes, hopefully better portfolio gains.

MichaelB 05-19-2012 05:30 AM

When choosing our asset allocation our objective is total return but we also focus on dividends and income.

marko 05-19-2012 06:16 AM


Originally Posted by truenorth418 (Post 1195982)
Hopefully the 15% tax rate status for qualified dividends will continue as well.

They definitely will ... for the next 7 months anyway.

grasshopper 05-19-2012 08:01 AM

I am a little of both. My 10 year out money is a core balanced fund 65/35. My 5 year money is high dividend equities. My Short-term is investment -grade bonds and MM.

GandK 05-19-2012 08:02 AM

I went to a dividend portfolio in my Roth IRA earlier this year to get my feet wet with this type of investing.

I found these two sites to be the most helpful:

Dividend Stock Analysis and Dividend History - dividata.com
Income Investing, Retirement Investing and Dividend Stocks - Seeking Alpha

scrabbler1 05-19-2012 09:28 AM

Being an early retiree and still only 49 years old, I have a mostly dividend oriented portfolio in my taxable account but with a partial growth element (about 1/3). My IRA has a majority growth orientation (about 55%) because my time horizon there is for another 11+ years, until I might need to tap into it.

WilliamG 05-19-2012 09:59 AM

I didn't vote because I consider our approach a hybrid. Have been retired a dozen years. After carving out a reserve for a period of spending, emergencies, etc., we consider 1/3 of our portfolio "growth" and the other 2/3 "growth and income". The growth is invested in total stock index funds and the growth&income is split between Wellington and Wellesley. We take the dividends from all of these funds (including the Roths), but these are not quite sufficient for our overall withdrawal.

FIREd 05-19-2012 10:20 AM

While total return is always an important consideration, I invest for income.

Chuckanut 05-19-2012 10:41 AM

Utlimately, I think it is all about total return. Dividends are on way of siphoning off earnings. Selling assets is another. With the possible exception of people who know they have very little time left, we all end up keeping an eye on total return. The risks of not doing so are very great.

clifp 05-19-2012 06:00 PM

I use dividend income because I don't have to worry about what a safe withdrawal strategy is. As long as it less than my portfolio's income everything is fine.

However, if dividends start being taxed as ordinary income that will cause me to switch to total return.

CyclingInvestor 05-19-2012 06:26 PM

Dividend, of the increasing kind.

While the health of each company and its earnings are important to me, the current market price is not, unless there are (imo) temporary relative mis-pricings between the different stocks I follow that I can take advantage of.

bigla 05-20-2012 10:04 AM

D7I vs TR
Thanks GandK for those links.

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