marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 16, 2011
- Messages
- 8,509
Hi Folks! Been away for a while. I've been busy with several personal issues including selling the 150 year old family homestead (a quality of life issue, not a financial one) and building a new home...all stories for another day (but if your do-good neighbor proudly announces that he's converted his rental house next to you to create "low income housing"...run!)
My predicament: I'm at a bit of a loss and come here for some context and/or perspective.
Background: RE'd 15 years ago and since then we've lived quite nicely on 1) MF dividends and cap gains and recently 2) SS. Have never had to sell a share.
Most dividends and CG's are within my IRA at TRPrice. No individual stocks; various MFs representing a 60/40 mix; reallocate as needed. We average about 7.5% total return with typically 2.1% of that in dividends and 2.7% in CG's and the rest organic growth. About 70% of that income arrives at year end.
We are "don't touch the principal" types and find that dividends and cap gains fill the gaps nicely and have been fairly consistent over the years, representing about 80% of our income stream.
Let's not get into "dividends and cap gains ARE part of the principal", ok?...I get that. Admittedly, a bit of mental gymnastics but fundamentally, we take comfort in having the same amount of shares at year's end as what we started with and allowing those shares to grow organically over time while delivering an income.
Here's my dilemma: This year's year-end dividends have come in at about half of historic levels (even lower than '08/'09); somewhat expected considering the Covid economy. Year-end cap gains came in higher than normal levels and between the two have essentially given us the same income as usual.
I'd hate to 'reach for yield' as I view that as bad as market timing but wonder if it's time to review my overall strategy and radically adjust or just sit tight and see how things evolve over the next few months.
Having said that:Strategically, I'm thinking of temporarily moving a certain amount of money from one fund into another to gain a nice chunk of the Year-End dividend/Cap Gain piece and then, after wash-sale time, moving it back to the original fund (which has better growth).
Any insight appreciated.
My predicament: I'm at a bit of a loss and come here for some context and/or perspective.
Background: RE'd 15 years ago and since then we've lived quite nicely on 1) MF dividends and cap gains and recently 2) SS. Have never had to sell a share.
Most dividends and CG's are within my IRA at TRPrice. No individual stocks; various MFs representing a 60/40 mix; reallocate as needed. We average about 7.5% total return with typically 2.1% of that in dividends and 2.7% in CG's and the rest organic growth. About 70% of that income arrives at year end.
We are "don't touch the principal" types and find that dividends and cap gains fill the gaps nicely and have been fairly consistent over the years, representing about 80% of our income stream.
Let's not get into "dividends and cap gains ARE part of the principal", ok?...I get that. Admittedly, a bit of mental gymnastics but fundamentally, we take comfort in having the same amount of shares at year's end as what we started with and allowing those shares to grow organically over time while delivering an income.
Here's my dilemma: This year's year-end dividends have come in at about half of historic levels (even lower than '08/'09); somewhat expected considering the Covid economy. Year-end cap gains came in higher than normal levels and between the two have essentially given us the same income as usual.
I'd hate to 'reach for yield' as I view that as bad as market timing but wonder if it's time to review my overall strategy and radically adjust or just sit tight and see how things evolve over the next few months.
Having said that:Strategically, I'm thinking of temporarily moving a certain amount of money from one fund into another to gain a nice chunk of the Year-End dividend/Cap Gain piece and then, after wash-sale time, moving it back to the original fund (which has better growth).
Any insight appreciated.