Question about how much dividends fall during recesssions

[ER Eddie]

Quote:

Originally Posted by ERD50 Sorry, I missed this 3 month old reply. But this is the myth that keeps getting repeated, which does not make it any truer. Are you 100% equities? That's not typical. The typical retiree is more like 60/40. At 60/40, you will very, very, very likely never sell stocks during a bear market. A conservative retiree is likely at < 3.5% WR, and a 60/40 AA ought to kick out at least 2.5% in divs, So that 40% fixed will be available to sell/rebalance, and will provide many, many, many years of 1% withdrawals ( the delta of 3.5% withdraw and the 2.5% in divs). So try again. -ERD50

Ok, I'll "try again." You're a bit condescending, you know? You already spent a fair amount of ink earlier in the thread lecturing about what turned out to be a misunderstanding on your part, which I patiently dealt with. Now you're doing it again. I'll take responsibility for this misunderstanding, but I'd ask that you talk to me with respect, and drop the condescending, know-it-all attitude.

Here's my part of the responsibility. I said I didn't have to "sell stocks." However, I was using "stocks" as a shorthand term for my whole portfolio. That's how I think of my portfolio -- it's a bunch of stocks. I'm a lay investor, a KIS type guy, so I use terms loosely sometimes.

To say it more precisely and clearly, by living off dividends, I don't have to sell any part of my portfolio -- equities or securities, stocks or bonds. I like it that way.

My dividend yields run about 2%. My expenses run about 1.75%. So I'm able to avoid selling anything during a recession. If my expenses were in the 4% range, I would have to sell chunks of my portfolio in a recession, to make up the other half. I would start with the bonds, of course. It would be silly to sell equities first.

Fortunately, though, dividends cover my spending nicely, and so I don't have to sell anything. I like that. I don't feel like my hand is forced by economic conditions.

Ok, hopefully that is clear now.

[mrfeh]

Quote:

Originally Posted by ER Eddie Ok, I'll "try again." I said I didn't have to "sell stocks," but I should've been more precise in my language. I tend to use "stocks" as a shorthand term for my whole portfolio. But to say it more precisely, I meant that by living off dividends, I don't have to sell any part of my portfolio, equities or securities, stocks or bonds. My dividend yields run about 2%. My expenses run about 1.75%. So I'm able to avoid selling anything during a recession. If my expenses were in the 4% range, I'd have to be selling chunks of my portfolio in a recession, to make up the other half. I would start with the bonds, of course. It would be silly to sell equities first. Fortunately, though, dividends cover my spending nicely, and so I don't have to sell anything. I like that. I don't feel like my hand is forced by economic conditions.

Every time you receive a dividend, you are effectively selling, whether you realize it or not.

[ERD50]

Quote:

Originally Posted by ER Eddie Ok, I'll "try again." You're a bit condescending, you know? ...

I went back and skimmed the thread, I don't see how anything I've said could/should be taken as "condescending", it sure wasn't meant that way.

I'm just trying to clear up some of what I see as common misconceptions about dividends sector portfolios.

Quote:

Originally Posted by ER Eddie ... Fortunately, though, dividends cover my spending nicely, and so I don't have to sell anything. I like that. I don't feel like my hand is forced by economic conditions. Ok, hopefully that is clear now.

The words are clear, but to me, it's all based on a foundation that just doesn't make any sense, a distinction w/o a difference as it were. mrfeh just put it concisely, so I'll leave it at that:

Quote:

Originally Posted by mrfeh Every time you receive a dividend, you are effectively selling, whether you realize it or not.

-ERD50

[Gavin60]

FWIW,
I have a few different utility stocks, not as flashy and the fast climbing rocket ships of the stock market but a pretty reliable income stream of just over 4%
Right now they are DRIP accounts but at 62 I will draw that quarterly dividend.

[ER Eddie]

Quote:

Originally Posted by ERD50 I went back and skimmed the thread, I don't see how anything I've said could/should be taken as "condescending", it sure wasn't meant that way.

Try again.

Quote:

I'm just trying to clear up some of what I see as common misconceptions about dividends sector portfolios.

I don't have a dividend sector portfolio.

Quote:

The words are clear, but to me, it's all based on a foundation that just doesn't make any sense, a distinction w/o a difference as it were.

We covered that earlier in the thread. I understand what you're saying -- basically that dividends aren't magic money that appears from nowhere; it comes out of a company's overall budget and therefore its overall value. I get that. I never thought dividends were some kind of magic money growing on trees.

I don't agree with your statement that I am selling shares whether I think I'm selling them or not. There's a difference between selling shares and refraining from buying more shares. I don't want to beat a dead horse, though, and it was pretty well handled earlier in the thread, so I don't want to repeat.

Let's just say we have different perspectives and leave it at that.