Hi AgAu the articles addresses a (portfolio) asset mix and how it performed (returns and beta) quite recently, during a period where equities are performing well, and then how it performed during the equity market correction of 2008-2009.
I have no idea what the future holds. My next article, in the research stage, will address bonds and asset allocation in a rising rate environment - when nothing works (including equities), and when equities are performing well.
Thanks SG. That will help for my next article. I am exploring just that scenario - when nothing works. There may be no where to hide in that case. Breaking even would be decent. yikes.
Anyway, back to the park for game two today. Big ball tourney weekend.
Thanks Gratian. It's a good mix. But who knows what the most optimal asset allocation will be - to manage risk and take advantage of some of the equity market gains?
Shorts may be necessary as one tool, one day? Yikes.
Hey SG, that period is on the list. Want to see what I might be getting into. And yes, CBO is what I use for my portfolio Corp 1-5. I hope that would hold up well for a bond fund.
And I hope most unit holders will be in there for the same reasons, and that when the you know what hits the fan most cbo holders will stay.
I appreciate your comment on not being able to replenish with higher yielding bonds due to excessive redemptions. In that environment hopefully that redemption damage would be over in a relatively brief timespan.
Hi Kibbo, one reason to perhaps not follow the exact model. Mostly what I know about Enbridge and TransCanada is that their stock price goes up and they both pay a dividend.
Canadian and U.S. oil has to be moved and they will be involved. But the situation is political and who knows what politicians will do?
I will continue to hold and trim. It will work until it doesn't. And at that point it will not have cost me a cent. Obvious I'm not a stock picker? Ha. Those companies are there from a previous life. I would agree there are better companies to hold in that space based on payout ratio and other factors.
Certainly. Though if we look at a period when we had low but rising rates from 1950 to 1965 the balanced portfolio 60 stocks to 40 bonds delivered to the tune of some 600%. Certainly equties doing the lifting in that period. No guaranteed of inverse correleation.
The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
Thanks Chester. The issue of asset allocation and DG should not be seen as out of place imo. It appears that most DG writers and 'commentators' here hold other assets, whether it be bonds, cash, pensions or other investments.
There are certainly (also) investors here who hold a large percentage of DG within their portfolios.
I would guess that most investors who adopt dividend growth will manage the risk with other asset classes - but of course that's a guess based on anecdotal evidence.
I would also guess that most newbies will be better off if they address the risks and then manage their own risk profile, and also have a plan for managing their DG holdings during the challenging periods.
The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
Great article, thanks. And certainly those 'new' to equity investing should assess their risk tolerance level - with respect to price declines.
Many experienced investors can experience 50% price declines and can hold on, and even profit from the lower prices available. Those new to the game will not know if they can handle the price volatility, until they are challenged.
And navigating through the dividend cuts, freezes and eliminations can be more than trying. During the last correction 37% of dividend champions (companies that have increased their dividend for 10-25 years) cut, froze or eliminated their dividends.
Those are tough waters to navigate.
One can certainly use dividend growth in concert with volatility reducing holdings.
In isolation HYG or other high yield may not appear too appealing. But perhaps in concert in a balanced portfolio. In the recent environment I've used small amounts of U.S. and Canadian high yield to offer some income, and provided some portfolio and bond diversification. Here's my recent article on a low-beta portfolio (0.2) on a shorter term basis.
Dividend Bubbles Are Not So Bad (Really) [View article]
Thank SG, enjoyed every word. Yes the long term interest rate chart from my article is very telling. And it certainly shows that for rates "no where to go but up". The question will be when.
My next article certainly examines my own risks with respect to interest rates. I may have increased my risk in my rush to 'safety'. And when one examines risk I think they should examine the worst (and also be prepared for) the worse case scenario - whether that be for equities, bonds or any other investment choice.
Dividend Bubbles Are Not So Bad (Really) [View article]
Hey southgent you might be the greatest source of ready information and insight on SA.
I have been working on your exact observation from above - elastic or changing correlations. Though if you chart TLT against DIA over five years and more it looks like the reverse mirror image in uncanny fashion. They even meet in the middle and then separate again. That may not continue, or course.
But I would guess that TLT might remain one of the useful tools for those looking to reduce volatility and protect capital? Certainly in concert with other assets.
Wondering what you would use from today, moving forward over the next 3-5 years to reduce volatility.
The Freakish Low-Beta Portfolio [View article]
I have no idea what the future holds. My next article, in the research stage, will address bonds and asset allocation in a rising rate environment - when nothing works (including equities), and when equities are performing well.
The Freakish Low-Beta Portfolio [View article]
The Freakish Low-Beta Portfolio [View article]
Anyway, back to the park for game two today. Big ball tourney weekend.
VIG: An ETF For Rising Inflation [View article]
I wrote on that here... The brandtastic portfolio
http://seekingalpha.co...
I also charted the VIG top ten and tracked its performance in this article here.
http://bit.ly/10YghrK
And the dividend history of VIG and the top ten here.
http://bit.ly/1134lPO
The Freakish Low-Beta Portfolio [View article]
Shorts may be necessary as one tool, one day? Yikes.
The Freakish Low-Beta Portfolio [View article]
Could be trying times, or maybe we are in an Alice in Wonderland equity bull?
Hopefully something works over the next decade or two.
The Freakish Low-Beta Portfolio [View article]
And I hope most unit holders will be in there for the same reasons, and that when the you know what hits the fan most cbo holders will stay.
I appreciate your comment on not being able to replenish with higher yielding bonds due to excessive redemptions. In that environment hopefully that redemption damage would be over in a relatively brief timespan.
No asset class working is a scary thought. yikes.
The Freakish Low-Beta Portfolio [View article]
Canadian and U.S. oil has to be moved and they will be involved. But the situation is political and who knows what politicians will do?
I will continue to hold and trim. It will work until it doesn't. And at that point it will not have cost me a cent. Obvious I'm not a stock picker? Ha. Those companies are there from a previous life.
I would agree there are better companies to hold in that space based on payout ratio and other factors.
The only stock I hold on purpose is Tim Hortons.
The Freakish Low-Beta Portfolio [View article]
http://seekingalpha.co...
It's a different story when that trend accelerated from 1965 to the late 80's. I am currently doing some research on that period.
The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
There are certainly (also) investors here who hold a large percentage of DG within their portfolios.
I would guess that most investors who adopt dividend growth will manage the risk with other asset classes - but of course that's a guess based on anecdotal evidence.
I would also guess that most newbies will be better off if they address the risks and then manage their own risk profile, and also have a plan for managing their DG holdings during the challenging periods.
The Most Important Thing To Know If You're Using Stocks As Fixed Income [View article]
Many experienced investors can experience 50% price declines and can hold on, and even profit from the lower prices available. Those new to the game will not know if they can handle the price volatility, until they are challenged.
And navigating through the dividend cuts, freezes and eliminations can be more than trying. During the last correction 37% of dividend champions (companies that have increased their dividend for 10-25 years) cut, froze or eliminated their dividends.
Those are tough waters to navigate.
One can certainly use dividend growth in concert with volatility reducing holdings.
Here are a few ideas on reducing volatility ...
http://seekingalpha.co...
4 Reasons To Still Hold High Yield [View article]
http://seekingalpha.co...
It includes high yield in small amounts. Along with a small amount of longer dated ETFs to balance a core shorter bond ETF.
Dividend Bubbles Are Not So Bad (Really) [View article]
My next article certainly examines my own risks with respect to interest rates. I may have increased my risk in my rush to 'safety'. And when one examines risk I think they should examine the worst (and also be prepared for) the worse case scenario - whether that be for equities, bonds or any other investment choice.
Low beta today, higher risk tomorrow?
Dividend Bubbles Are Not So Bad (Really) [View article]
I have been working on your exact observation from above - elastic or changing correlations. Though if you chart TLT against DIA over five years and more it looks like the reverse mirror image in uncanny fashion. They even meet in the middle and then separate again. That may not continue, or course.
But I would guess that TLT might remain one of the useful tools for those looking to reduce volatility and protect capital? Certainly in concert with other assets.
Wondering what you would use from today, moving forward over the next 3-5 years to reduce volatility.