Join Early Retirement Today
Reply
 
Thread Tools Display Modes
The FIRE dividend ETF portfolio
Old 05-15-2006, 09:39 AM   #1
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 422
The FIRE dividend ETF portfolio

Well my friend wanted a conservative portfolio and have access to US ETFs but not funds(Alien). He also wanted a super simple portfolio and income of around 4%. I came up with this:

DVY 25%, PID 25%, TIP 25%, GIM 25%

TIP was chosen over AGG as GIM holds little/none inflation guarenteed bonds.
My only worry is the high focus on financials/utilities. So considered IWW and EFV instead but income around 2% only which MIGHT be enough.

Also I would prefer a foreign ETF for foreign bonds rather than GIM (closed end fund) but lno choice currently.

Finally I considered some foreign RE like IGR or RWF for diversification as well as income booster. Might be added later after which IWW and EFV might be able to take over from DVY/PID.

he plans to never sell any shares except for re-balancing.

Cheers!
preben is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: The FIRE dividend ETF portfolio
Old 05-15-2006, 09:54 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2003
Posts: 18,085
Re: The FIRE dividend ETF portfolio

Interesting idea. I guess I would probably shave 2 or 3% of each weighting for a basket of individual securities to play with, but that's probably just the male hormones at work, as UM would say.
__________________
"All animals are equal, but some animals are more equal than others."

- George Orwell

Ezekiel 23:20
brewer12345 is offline   Reply With Quote
Re: The FIRE dividend ETF portfolio
Old 05-15-2006, 09:58 AM   #3
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 422
Re: The FIRE dividend ETF portfolio

He does have some gambling money in another account for single stock fun only. Cheers!
preben is offline   Reply With Quote
Re: The FIRE dividend ETF portfolio
Old 05-15-2006, 10:20 AM   #4
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: The FIRE dividend ETF portfolio

PID doesn't have any exposure to Asia from what I read.* *I'd want a chunk of exposure to those economies.* *With EFV, he'd at least have a chunk of Japan but still no emerging Asian economies.
wabmester is offline   Reply With Quote
Re: The FIRE dividend ETF portfolio
Old 05-15-2006, 10:35 AM   #5
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Re: The FIRE dividend ETF portfolio

Quote:
Originally Posted by wab
PID doesn't have any exposure to Asia from what I read.* *I'd want a chunk of exposure to those economies.* *With EFV, he'd at least have a chunk of Japan but still no emerging Asian economies.
Oh, c'mon, Wab, you're fishing in the wrong place. I'm not buying PID for exposure to Asia and you shouldn't be using that as a reason to not buy PID.

First, with 90 seconds of research I noted that PID's fourth-largest holding is Nam Tai Electronics, which claims to be headquartered in Hong Kong. So you're not reading enough.

Second, the ETF is based on a dividend index and not on country sectors. If you want more exposure to Asia then you should go find a country sector fund.

Third, if Asia is indeed under-represented in PID, I wonder if it's because their companies aren't paying enough dividends to meet Mergent's criteria. So you apparently have a choice right now-- Asia or dividends, but not a lot of both in PID.

It's possible over the next decade that more Asian companies will be added to the index. But I bet that whatever companies are in the dividend index will be outperforming most of the companies that aren't, no matter what language they write their reports in. I think that performance is more important than an arbitrary map line.
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Re: The FIRE dividend ETF portfolio
Old 05-15-2006, 12:01 PM   #6
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: The FIRE dividend ETF portfolio

Where does your friend live/plan to live? It might be sensible to have a higher % in home country currency, to reduce currency risk. Could TIP be replaced with inflation indexed bonds in home currency? Maybe GIM too (replace with nominal local government bonds?) then get currency diversification from the equity, but have about half of portfolio in local currency.
lazyday is offline   Reply With Quote
Re: The FIRE dividend ETF portfolio
Old 05-15-2006, 01:16 PM   #7
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 422
Re: The FIRE dividend ETF portfolio

He plans as crazy/international life as I wherefore the currency exposure is purposely split as mentioned. Buying in home country will expose him to much higher taxes on both income/capital gains (50%+ in taxes...welcome to Scandinavia) so makes no sense. Cheers!
preben is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Dividend Stocks in place of Bonds Hydroman FIRE and Money 89 05-20-2007 02:28 PM
No displayed dividend reinvestment in 401(k) a FIRE and Money 17 03-19-2007 09:12 PM
High Dividend Portfolio vs Portfolio Diversified Across Asset Classes ScaredtoQuit FIRE and Money 36 01-12-2007 12:24 PM
Career decisions / conflict before FIRE bearkeley Young Dreamers 9 07-28-2006 02:26 PM

» Quick Links

 
All times are GMT -6. The time now is 04:58 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.