My Dividend Income Portfolio Online

[photoguy]

Actually I didn't mean dealing with turnover in the index but rather having to deal with a lump sum investment or sale. E.g., my "fund" is up 30% and hits rebalancing bands so I need to sell stuff off. This would be another batch of transactions with number dependent on how closely you want your sample to replicate the index (could be more than dealing with turnover).

I'm most worried about replicating the index (having enough stocks) for classes like small caps where much of the gains are attributed to a small number of companies.

 

[clifp]

Actually I didn't mean dealing with turnover in the index but rather having to deal with a lump sum investment or sale. E.g., my "fund" is up 30% and hits rebalancing bands so I need to sell stuff off. This would be another batch of transactions with number dependent on how closely you want your sample to replicate the index (could be more than dealing with turnover).

I'm most worried about replicating the index (having enough stocks) for classes like small caps where much of the gains are attributed to a small number of companies.

Well I hadn't considered rebalancing at macro level. I guess the easiest way would be to decrease or increase the number of holdings. So if you were currently holding 70 of 146 stocks and 10 of those were replaced in the index,and you were currently overweight you sell all 10 but only buy 7 of the replacements.

To be honest in most cases I think replicating an index is more trouble than its worth. But some specialized ETF have a fairly small portfolio and have a fairly high expense ratio. Often when I look I find I own ~1/2 of the top 25 holding so rather than just buying the ETF I'll just a buy a few more of the missing holdings

I think 100 to 200 stocks is the upper limit when makes sense. So a small cap fund wouldn't be a candidate.

I got interested in the subject because there was a guy, on MrMustache who was in Germany, he had no access to cheap index fund (greater than 1% ER). But he could buy stocks for $4 a shot, he had $500K so buying the top 100 S&P stocks and 25 out of each 101-200, 201-300 next etc was going to cost less than a $1k a considerable savings for the $6K a year in annual expenses.

 

[gcgang]

If I am only 25 (almost 26), should I put my dividend stocks into a Roth IRA or a regular investment account?

I have been buying mainly Ecotality(ECTY) with what money I can spare a month in my regular investment account.

I like ECTY because with the success of Tesla Motors(TSLA) and the other car companies all working towards producing more EVs.

It seems like a great long term stock to buy.


So for a nice monthly dividend I have been looking at Armour REIT (ARR).

Don't do this, man. With your time horizon, the discipline of saving itself will make you FI. Don't screw it up with weird "story" stocks. Most "story" stocks have a sad ending. Just buy the index.

 

[photoguy]

I got interested in the subject because there was a guy, on MrMustache who was in Germany, he had no access to cheap index fund (greater than 1% ER). But he could buy stocks for $4 a shot, he had $500K so buying the top 100 S&P stocks and 25 out of each 101-200, 201-300 next etc was going to cost less than a $1k a considerable savings for the $6K a year in annual expenses.

At 1% I'd be tempted to make my own index fund too. That's a terrible expense ratio. I wonder why he doesn't just buy an ETF?

 

[Rothman]

1% is far too much, buying shares to represent index better, downside is work and tracking, ETF index is by far the best for risk/reward and work.

 

[prof12]

Hey Eladio!!!!!

Hey Eladio--

I've been following your thread and your portfolio for some time and it has been over a month since you posted your July material. Any chance of you posting anytime soon? I really enjoy looking at what you are doing. prof12

 

[bbbob57]

bought POT....any thoughts? I live in California.

 

[LazyErik]

bought POT....any thoughts? I live in California.

I've been watching them for a couple years. I could never figure out the market/how the business worked. After this big dip I might do a little bottom feeding with my fun money......if my DW let's me.