NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
So if in your mid 30s with 2 kids, would you consider leaving the workforce if you had dividend income of $150k + and reinvesting some of it?
Many couples with kids do not make $150K/year, and they do fine.
The question is then, how reliable that $150K income is.
I neglected to do what p4uski did, which was to look at the total return of PSLDX. And it shows a very respectable return since its inception in 2007, with nice Sharpe ratio.
It beat the market for the past 3/5/10 years. Recent performance is not as good; it trails the market YTD, and is about even with the market in the past year.
Looking further into the fund holdings, I saw things that I did not understand at all. This fund is heavily invested in derivatives which may not be available to individual investors. Here's an excerpt of the fund description:
A traditional index fund typically invests in all, or a representative sample, of the stocks in an index in an effort to replicate the return of the index. PIMCO StocksPLUS Long Duration Fund seeks to outperform the index by employing a unique, bond-centric strategy. It does this by purchasing low-cost S&P 500 derivatives and backing this exposure with an actively managed portfolio of diversified long-duration bonds.
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