Popular Investment Strategies

[ERD50]

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- As I was approaching retirement, interest rates were basically 0% and only fools were buying bonds. ...

And yet, those who stuck to an AA even with bond funds did better than SCHD, and history indicates they will be fine over the long run. My data included those 'foolish' bond funds.

If interest rates take a sharp rise, and some here are stuck with their longer term bonds at older lower rates, I won't call them 'fools'. It's a choice that may or may not work out. We shall see.

... - Most of recent growth of the S&P 500 is because of 7 stocks (that appear to me to be grossly over-valued). ...

While I'd prefer to be more diversified, and am a little, since I invest more in VTI than SPY as I go forward. But has it really been all that different in the past? I don't know, but I suspect it will all average out.

OK, VTI not even as bad as I thought, AAPL, MSFT @ ~ 6%, AMZN @ ~ 3% and it goes down to 1% for LLY at #10. Heavily tech weighted, but it is what it is.

SCHD top 10 go from 4.7% down to 3.8%, so if we added them all up, probably not a big difference - but I'll admit, looks like a bit more diversification in those top ten.

Regardless - if that's so bad, why is even the S&P's volatility only slightly greater than SCHD (and easily offset with just a 5% bond addition)? The proof of the pudding is in the eating.

... One clarifying question - does your volatility analysis assume you re-invest dividends?

If you look at the links I provided, yes, dividends are reinvested. To be clear, I used a 3.3% IAWR, so any divs up to 3.3% would be just drawn off as the cash flow for the withdrawal, nothing left to re-invest. But anything above 3.3% would be reinvested.

ERD50 - thanks for the response. I guess a few more thoughts. My view is EVERYONE de-risks their portfolio somehow in retirement. Some use a 3-bucket strategy, some buy annuities, some have a 60/40 allocation, some invest in dividend stocks, etc. But on this website, it's only dividend investors who are treated like "flat earthers". ...

I will stop here, because I see nothing in my response to you that could be interpreted as treating you like a "flat earther". I presented facts, analysis, data. I was respectful. You have not responded in kind (as far as facts/data/analysis).

The bucket strategy has been challenged here, by me and many others. It's just a complicated, poorly defined (when and exactly how and from where do you re-fill the buckets? That ends up being very fuzzy), and round-about way to describe an AA.

Annuities come under a *lot* of analysis, and a *lot* of critique.

60/40, 0/100, 30/70, 70/30, 0/100 have all been discussed and critiqued here.

You perceive you are being treated differently. I don't get it.

-ERD50

 

[ESRwannabe]

Most of my money is in the etf SCHD and a pension.