Portfolio Advice Needed Please

L

Letj

Thinks s/he gets paid by the post
Joined
May 23, 2007
Messages
1,255
I've had some money sitting in a money market account for the longest and I am ready to make a move. I initially wanted to invest in municipal bonds but based on my research and some feedback I got from here, I am going to hold off for now. I am now thinking more along the lines of high dividend yield stocks but I don't want to be bothered with picking individual stocks. I know many people on here are also looking to high dividend paying stocks as well. Are you investing in individual stocks or a high income mutual fund. If mutual fund, what funds have you invested with and what's your results so far?
 
Need to know time frame and risk tolerance. Money market is good if you need the money in the very near term, otherwise you are losing money in it, to inflation. Low cost index funds thru Vanguard would be good general advice, some in bonds, some in stocks, with the ratio to be determined by your time frame and risk tolerance.
 
Thanks for your response. I don't expect to need the money for another 11 years.
 
Letj said:
I've had some money sitting in a money market account for the longest and I am ready to make a move.
Click to expand...
OK, that's it, I'm callin' the market top. Tomorrow I'm selling it all at the open and going short on margin. I'll sell OTM call options on whatever else I can get away with.

Letj said:
I am now thinking more along the lines of high dividend yield stocks but I don't want to be bothered with picking individual stocks. I know many people on here are also looking to high dividend paying stocks as well. Are you investing in individual stocks or a high income mutual fund. If mutual fund, what funds have you invested with and what's your results so far?
Click to expand...
But apparently you can put forth the effort to request that we do your research for you?

I feel obligated to point out that I don't invest in "high dividend paying stocks". I invest in a fund of stocks that pay high-quality dividends-- that means the dividends aren't necessarily high, but they're highly likely to be paid for a considerable number of years.

Let me suggest an alternate approach derived from your feeling that you don't want to be bothered. I suggest that you resolve the root cause of the issue that inspired you to put some assets in a money market account "for the longest", that made you feel "ready to make a move", and that causes you to invest in something you can't be bothered to learn about.

Let me suggest that you figure out what the heck it is that you're trying to achieve, how long you're willing to work on the project, and what you want to achieve it with. You need to decide what goal you're saving for, and then you need to decide what asset classes you'd like to do it with, and then you need to decide what your asset allocation is going to be. I'm skeptical that you're still reading at this point, let alone assimilating the verbiage, so for the benefit of the other 8000+ posters I'd recommend the Bogleheads wiki on the subject: Category:Asset Allocation - Bogleheads

Once you figure out your asset allocation then you may be interested in researching the iShares Dow Jones Select Dividend ETF, ticker symbol DVY. But Vanguard probably has a number of similar ETFs & funds paying high-quality dividends at lower expense ratios.

Note that I also picked an individual stock for our ER portfolio, Berkshire Hathaway. It doesn't pay a dividend but it's currently trading at a discount to its intrinsic value, and in 10-20 years I expect it to start paying a healthy dividend. It's a good example of diversifying your assets among 3-4 different classes.

Someday you may also care enough to bother to read Josh Peters' "Ultimate Dividend Playbook" or follow the blog of the Dividend Growth Investor. But for your current attitude & aptitude I'd recommend picking an asset allocation, filling it through funds with low expenses, and rebalancing to stay near that AA.
 
Consider dividend producing ETFs such as IXP (ticker symbol). These ETFs are usually a portfolio of stocks that give pretty healthy dividends. Yet you're not tied to the risk of holding an individual stock. Do a Google search on ETF dividend stocks.

Nords also gave pretty good advice on DVY (above), another very good ETF for what you may need.
 
Letj said:
I've had some money sitting in a money market account for the longest and I am ready to make a move. I initially wanted to invest in municipal bonds but based on my research and some feedback I got from here, I am going to hold off for now. I am now thinking more along the lines of high dividend yield stocks but I don't want to be bothered with picking individual stocks. I know many people on here are also looking to high dividend paying stocks as well. Are you investing in individual stocks or a high income mutual fund. If mutual fund, what funds have you invested with and what's your results so far?
Click to expand...

Letj, I don't know about high dividend yield funds but I get some nice dividends that are adequate for my living expenses, from Vanguard Wellesley, a more conservative choice. https://personal.vanguard.com/us/funds/snapshot?FundId=0027&FundIntExt=INT
 
A boring dividend-paying ETF that I have held for several years now is XLU. It is a basket of utility companies, and is paying 3.92%/yr currently. The expense ratio is 0.19%, as charged by State Street who runs it. Portfolio turn over is very low, as an ETF should be, so cap gain tax is under control of the individual investor. This kind of sector ETF is a good way to get exposure to a particular sector, while getting the benefits of diversification compared to getting individual stocks.

As many other dividend stocks, XLU did well last year, hence has been down a bit this year as investors are rotating out of the sector. I am watching to add more, if and when I harvest gains elsewhere.

I used to hold also UTH, a HLDRS administered by Merryl Lynch but it was recently terminated along with all other HLDRS's.
 
Three words: ETFs, ETFs, ETFs,............:)
 
Vanguard's Total International Stock Fund is a sneaky little dividend payer. VXUS paid 3.1% last year, which is surprisingly similar to the yield of the Power Share International Dividend Achievers ETF (PID).
 
Nords, ducking for cover; somewhat guilty as charged. Just to clarify though; I think I used the wrong term; not that I can't be bothered; I find the process very confusing. For example, I researched a great deal of dividend paying stocks but also observed that they were very expensive which surprised me given the recent lows in the market. In addition, I wanted to be exposed to a sufficient number of companies and sectors so I decided to give up and figured it might be simpler going with a mutual fund.

Thanks all for such great advice! I am going to check out the book Nords mentioned.
 
oh oh oh - ok ok I can't resist. Not advice but but

Psssst Wellesley!

There I said it.

heh heh heh - just couldn't resist. :ROFLMAO::ROFLMAO::flowers:
 
unclemick said:
oh oh oh - ok ok I can't resist. Not advice but but

Psssst Wellesley!

There I said it.

heh heh heh - just couldn't resist. :ROFLMAO::ROFLMAO::flowers:
Click to expand...
One could do worse.

You do need to know that it does not always go up:
VANGUARD WELLESLEY INCOME FUND Fund Chart - Yahoo! Canada Finance

In the last dip it took 4 years to recover its net asset value.

What us old guys are more interested in is the dividends history:
VWINX Historical Prices | VANGUARD WELLESLEY INCOME FUND Stock - Yahoo! Canada Finance

With your time frame of 11 years, it is hard to say what to do. How important is it that you have zero chance of losing capital by then? If you have very specific needs (selling everything to buy a house, for example), you need CDs or TIPS. It can take the stock market 10 years to recover from a big dip.
 
You must log in or register to reply here.

Similar threads

bearkeley
Feedback on Moms Allocation of 200k
Replies
14
Views
1K
Evee
E
Trooper
PSA: Vanguard 2023 Tax Forms
Replies
5
Views
776
Trooper
Trooper
E
Trying to determine Fed Tax exemption (%) for funds w/V funds
Replies
5
Views
631
eroscott
E
S
Managing Withdrawals beyond writing a check
Replies
7
Views
741
steady saver
S
B
transition from saver to spender
Replies
9
Views
1K
Bigdawg
B

Latest posts

Back
Top Bottom