Seeking Alpha

Dale Roberts

 
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  • Portfolio Keeping You Up At Night? Take One Of These
    Editors' Pick • Thu, Oct. 16 AGG, LQD, SPY 42 Comments

    Summary

    • The recent stock market correction has been picking up steam.
    • If you are feeling a little uneasy, it may be time to add an investment that has a history of going up when the markets went down.
    • Long-term Treasuries and other bond funds have once again "done their thing" in the recent correction.
    • It's not too late to create your SWAN, or Sleep Well At Night, portfolio.
  • How Retirees Made It Through The Last 2 Recessions
    Tue, Oct. 14 CMCSA, CVX, GE 26 Comments

    Summary

    • Many retirees faced a very challenging retirement date from 1999-2002 as they had to navigate through two of the most substantial market declines.
    • An all-equity portfolio of any kind would have been challenged and would likely be very wobbly coming out of the Great Recession.
    • Sequence of return risk should be addressed for most retirees; the equities that deliver that inflation protection must be protected in market downturns.
    • This article provides a very simple asset mix and portfolios that made it through, from 2000, with flying colours.
    • The portfolios allowed investors to spend 4% of assets with a 3% annual inflation adjustment from 2000 to present. Now that's a stress test!
  • For Retirees, Have The Last 15 Years Been The Worst Of Times? Ever?
    Editors' Pick • Tue, Oct. 7 CL, JNJ, KO 62 Comments

    Summary

    • Funding retirement is tricky business, to say the least. What works in one period may not work in the next.
    • Stocks have typically provided the growth engine that allows retirees to beat inflation and maintain an aggressive spending strategy - and maintain that quality of life.
    • But investing in the equity markets takes on additional risks for the retiree, as selling stocks in down years can cripple the portfolio.
    • The last 15 years have been perhaps the most trying time for retirees, especially those who began retirement in 1999 to 2001.
  • Retirees, Don't Count On Stocks To Deliver From Here
    Editors' Pick • Tue, Sep. 30 SPY, VTI 140 Comments

    Summary

    • Many retirees count on the stock markets to deliver the robust growth required to beat inflation and provide an aggressive inflation adjusted spending rate.
    • The stock markets have periods when they have provided 14% plus inflation adjusted annual gains.
    • In periods of high growth, a retiree was typically able to purchase or hold stocks at very attractive and sensible price to earnings ratios. Today is a different story.
    • From today, the equity markets may not provide the growth necessary to provide 4% inflation adjusted returns for retirees.
  • Retirees, The S&P 500 And Cash Are All You Need
    Editors' Pick • Wed, Sep. 24 SPY 188 Comments

    Summary

    • What simple portfolio survived 40 years that included stagflation, the tech meltdown and the Great Recession? The S&P 500 covered by cash.
    • This $1 million portfolio delivered nearly $5 million in income from 1972 to 2012.
    • The total return of the S&P 500 can do the trick and provide the growth necessary to help retirees beat inflation.
    • We'll have a look at the spending ratio of the portfolio and explore what is "the tipping point".
  • We Can't Redefine Risk, It's The Price Silly
    Tue, Sep. 23 DIA, SPY, QQQ 31 Comments

    Summary

    • Investors on average have performed poorly due to the emotional reaction to stock market price swings.
    • Too many investors typically do a lot of buying near the tops (when they feel comfortable) and then sell when prices are falling as they are gripped with fear.
    • It may be dangerous to try to redefine risk, or suggest that investors who address risk are just pessimists looking for the downside.
    • Quite the contrary, any intelligent investor is an optimist by trade. One has to be a long term optimist to invest in the stock markets.
    • It may come down to Mr. Buffett's suggestion that if you can't handle a 50% correction, don't invest in the stock markets.
  • In The Next Correction, Will You Be A Winner Or A Loser?
    Editors' Pick • Wed, Sep. 17 AGG, CSCO, JDSU 144 Comments

    Summary

    • As they say, we all look and feel like geniuses in bull markets, but it is in the market corrections when money is gained or lost.
    • The vast majority of investors have a habit of buying near the top and selling near the bottom, are you prepared to go against the crowd?
    • Are you prepared for a market correction, or collapse? What is your risk tolerance level?
  • There's Very Little Chance Of Beating A Balanced Portfolio From Here
    Editors' Pick • Wed, Sep. 10 AGG, SPY, TLT 73 Comments

    Summary

    • This is now the 4th longest bull market in history. We're in the 2nd longest period without a 10% correction. Every day, we get closer to the next correction.
    • A re-balanced growth portfolio that holds a modest 25-35% bond component offers the possibility of delivering stock market like gains (or better) with a much lower risk profile.
    • The risk return proposition is likely swinging in favor of a balanced portfolio. It might be time to listen to Mr. Benjamin Graham.
  • Thanks Burger King For The Whopping Profits: Here's Where The Money Went
    Editors' Pick • Tue, Sep. 9 BKW, BRK.B, SPY 41 Comments

    Summary

    • I only hold 4 individual stocks, well now that's 3 thanks to Burger King purchasing my favourite known as Tim Hortons.
    • I sold 2/3 on the day that it was announced with a 22% spike, and then 1/3 the following day with another 10% increase in profits. Tim Hortons delivered 250%.
    • Tim Hortons delivered a 250% return from March of 2006 to September 2014, a wonderful and rare gift for an investor.
    • Cash is king, but we need to be in the markets as well. Perhaps I can have my cake and eat it too.
  • In Defense Of The Shiller CAPE Ratio - It Works!
    Tue, Sep. 2 SPY 25 Comments

    Summary

    • The Shiller CAPE ratio measures the price of companies with respect to earnings with a blended approach that takes into consideration a 10 year history of earnings.
    • We should remember that Mr. Robert Shiller does not suggest that an investor use CAPE as a market timing device to get in or out of the markets.
    • The CAPE ratio does offer long term predictive powers, estimating a range of probable stock market returns from a PE level.
    • The current CAPE ratio suggests that today, we are likely looking at very meager or negative returns over the next decade.
  • Dividend Growth Investors, Prepare To Boost Your Returns
    Tue, Aug. 26 AGG, SPY, TLT 39 Comments

    Summary

    • Selecting a group of dividend growth companies can provide a lower risk or lower volatility portfolio.
    • That lower-volatility portfolio may help some investors weather the next storm, but dividend payers can fall hard as well.
    • I fear that many dividend growth investors have not conducted a true personal risk assessment.
    • There can be a false sense of security when it comes to dividends; even the dividends may not hold up in a major correction.
  • Selling My Tim Hortons Was A No-Brainer.
    Tue, Aug. 26 AAPL, BKW, THI 28 Comments

    Summary

    • Tim Hortons was the only stock that I held "on purpose".
    • Tim's was a great story, the strongest brand in Canada - they sell 8 out of 10 cups of quick serve coffee in Canada.
    • Burger King is looking to purchase Tim Hortons, I don't think they would understand what kind of company it is, and how to continue with this incredible solid growth story.
  • Warren Buffett Hates Bonds, Loves Cash
    Wed, Aug. 20 SPY, BRK.A, BRK.B 48 Comments

    Summary

    • Warren Buffett is sitting on his largest cash pile, ever. Warren has a very big chest, war chest that is.
    • Warren chooses cash over bonds for the obvious reason that cash is liquid and available. It's dry power that he can quickly fire.
    • What can we learn from Warren Buffett and his Berkshire Hathaway Funds sitting on cash for a couple of years, not finding much that is investment-worthy?
    • Warren Buffett looks at cash differently than would you and I; to Mr. Buffett cash is a call option that can be priced.
  • The Same Returns With Half The Risk?
    Fri, Aug. 15 AAPL, AGG, EFA 49 Comments

    Summary

    • I created and hold a very low beta portfolio that I have transposed to U.S. holdings.
    • With the return of very modest volatility that portfolio mix has outperformed the broader markets in 2014.
    • Are we again in a scenario where the balanced portfolios will potentially outperform the all-stock portfolios over the next several years?
    • In the scenario of a market correction, the best risk adjusted returns may come from a prudent mix of stocks, bonds and cash.
  • How Dividends Don't Matter In Retirement; A Few Examples
    Editors' Pick • Thu, Aug. 7 BRK.A, BRK.B, NOBL 518 Comments

    Summary

    • Recently I wrote an article entitled Dividends Don't Matter In Retirement Either. Here are a few simple scenarios that demonstrate the power of stock price growth for retirees.
    • It all comes down to the earnings power of your companies. Dividends can help us find that profitability.
    • Investing for total return, even in retirement can be the path to the most successful retirement, with the most income available.
  • I'm Not Selling Anything, I'm Buying Everything
    Thu, Jul. 31 AAPL, VIG, SPY 97 Comments

    Summary

    • Recently, a Seeking Alpha author admitted to selling most everything due to fears of a market pullback and market over-valuation.
    • In my opinion, this author is not yet an investor, but thanks to some recent experience and introduction to emotional risk, he may be on his way.
    • This author teaches us that it is paramount to first have a plan when investing, a plan that prepares us and tells us what to do in any market condition.
  • The Stocks Catch The Bonds - 6.5 Years Later
    Editors' Pick • Tue, Jul. 22 EFA, EWC, SPY 30 Comments

    Summary

    • The year 2008 provided a very poor start date for monies invested in most stocks.
    • From 2008, a typical bond heavy portfolio has outperformed a balanced and balanced growth portfolio that would offer double or more the stock exposure.
    • Sometimes, the market announces that we proceed with caution - is this one of those periods where perhaps returns will be nil or minimal in the short-to-mid term?
    • According to the Shiller Index, this is the third-most expensive market in market history.
  • Dividends Don't Matter In Retirement Either
    Editors' Pick • Thu, Jul. 17 SPY, DGRO 764 Comments

    Summary

    • Stocks are the best performing asset class that provide the best opportunity for growth and returns that can beat inflation.
    • What drives that growth is the earnings power of a company; the actual dividends do not drive earnings power, they are a reflection of that earnings success.
    • Most would agree that the dividends don't matter in the accumulation phase, but the same holds true when harvesting in the retirement phase. What matters is earnings growth.
  • Getting The Returns Without The Risk
    Editors' Pick • Tue, Jul. 8 SPY, TLT 105 Comments

    Summary

    • A bond ladder can typically deliver the total return of the longest dated bond within the ladder.
    • Bond laddering can greatly reduce the chance of having a negative year, even within a bond bear market.
    • What's the sweet spot for the duration of a bond ladder if one fears a rising rate environment?
  • Cutting My Dividends By 35% - Improving My Dividend Growth Portfolio
    Mon, Jun. 23 NOBL, SDY, SPY 124 Comments

    Summary

    • Most dividend growth investors on Seeking Alpha appear to invest for yield, that is likely leaving money on the table.
    • Dividend growth offers the opportunity to outperform the market with respect to total return, but the magic is growing dividends, value and a low payout ratio.
    • I have left behind the higher-yielding Vanguard VYM, and moved into the more pure dividend growth play of the much lower-yielding VIG.
    • We should always remember that in the accumulation phase, all that matters is total return matched to the investor's risk tolerance level.
  • How To Outlive Your Money: A Lesson From Canada
    Mon, Jun. 16 SPY 155 Comments

    Summary

    • Canadian policy mandates that retirees remove 7.48% in their 72nd year. That level of drawdown is a recipe for retirement disaster.
    • The 4% drawdown rule may not apply in current conditions. 3 may be the new 4 when it comes to spending rates in retirement.
    • We'll examine the likely outcome of withdrawing at that high rate over the next couple of decades.
    • We humans are living much longer, and adjustments have to be made. How do we make our money last as long as we do?
  • The Time Warren Buffett Got It Wrong
    Editors' Pick • Wed, Jun. 11 SPY 89 Comments

    Summary

    • Warren Buffett has suggested that a retiree might hold a mix of 90% equities and 10% bonds.
    • The all-stock portfolio actually works quite well funding 4% or more of portfolio value, inflation adjusted, over most 30 year periods.
    • But the equity portfolio increases risk during years of successive market declines.
    • We'll have a look at the 90/10 portfolio for retirees, a 60/40 mix, along with bucketing with cash and bonds to fund retirement in stages.
  • Warren Buffett Was Right About Retirement
    Mon, Jun. 2 SPY 93 Comments

    Summary

    • Many well read studies suggest that one can fund a lasting retirement by withdrawing 4% to 4.5% of portfolio assets.
    • Warren Buffett suggests that investors simply hold 90% S&P 500 and 10% in a bond fund. Is he serious?
    • We'll examine how an all-equity portfolio would have performed in the draw down period over the last 10 years and through the last two market corrections.
    • An all stock portfolio has an incredible track record of making money last for 30, 40, 50 years or more in the spending stage.
  • What If We See The 1940's All Over Again?
    Mon, May. 26 DIA, TLT, SPY 37 Comments

    Summary

    • Just because yields are low doesn't mean that they have nowhere to go but up.
    • The last time we had crippling government debt and historical low yields, they stayed low for a decade and then some.
    • We'll apply the yield hikes of the 1940's and 50's with today's yields on Treasuries to see what kind of performance we would receive.
    • While bonds offered muted returns in the 40's and 50's the stocks came to their defense.
  • How Bad Could It Get For Bonds?
    Tue, May. 20 PLW, GOVT, RINF 19 Comments

    Summary

    • Most investors have only known the good times for bonds. Yields have largely been falling since 1981. That could change in a hurry.
    • Yields on Treasuries are near all-time lows; what happens if those rates spike?
    • We'll look at what history offers as the worst-case scenario.
    • Yields are low, there may not be much in the way of total return protection by way of yield.
  • How Long Can You Afford To Be Under Water?
    Editors' Pick • Mon, May. 12 AGG, EWC, EFA 97 Comments

    Summary

    • When the stocks markets correct, it can take many years for your portfolio to return to its previous total value.
    • In addition to managing the initial price corrections, we should also manage the time period that it takes to move back into positive territory.
    • We'll look at the recovery times in recent market corrections evaluating all-equity and balanced portfolios.
    • It's important to pay attention to recovery periods in the accumulation and retirement or spending phases.
  • There's No Money To Be Made From Here, Maybe
    Editors' Pick • Mon, May. 5 SPY 57 Comments

    Summary

    • The stock markets are entering rarefied territory when it comes to valuations.
    • There is usually not much money to be made from new monies invested at these tops.
    • We'll look at the returns from previous market tops.
    • What is the best strategy, and how do we create dry power out of thin air?
  • If I Was A Stock Picker, Here's What I'd Do
    Wed, Apr. 30 BRK.A, BRK.B, DIA 52 Comments

    Summary

    • I only hold three stocks to date, most of my holdings are by the way of ETFs.
    • Many studies show that one can achieve diversification with 15-20 companies, perhaps I can lower the fees I pay by purchasing enough members of an index that I want to.
    • In the end the most cost effective solution may lie with purchasing an ETF combined with a few individual stock selections.
    • I am looking to capture the market-topping performance of the Dividend Aristocrats and Vanguard's VIG and VDIGX.
  • A Simple Way To Outperform The Market With Beta Power
    Mon, Apr. 21 AGG, SPY, TLT 43 Comments

    Summary

    • The total market that includes the small and mid cap companies has the ability to outperform the broader market S&P 500.
    • Long Term Treasuries are one of the best risk-reducing agents available.
    • What happens when we create a simple portfolio of 75% Total Market VTI and 25% long term treasuries by adding TLT? We still have an market outperform.
    • What if we reduce volatility even further by creating a portfolio of market beating dividend growth companies with those long term treasuries?
  • What Is Total Return?
    Tue, Apr. 15 NOBL, SDY, VIG 58 Comments

    Summary

    • In the accumulation phase, the most important metric is total return once the risk tolerance level is taken into consideration.
    • Total return is widely misunderstood as an investment style. Of course, total return is a measurement of portfolio total value.
    • Focusing on total return vs. total income may provide greater income in the spending phase, when that income is actually required.
  • Actually It Is All About Total Return...Totally!
    Tue, Apr. 8 BNS, CVY, HYG 159 Comments

    Summary

    • It's a simple mathematical fact, $2 million buys more income than $1 million, the goal should then be accumulating the highest portfolio value within your risk tolerance level.
    • Why are many dividend growth investors essentially adopting a spending strategy in the accumulation phase?
    • It's time to separate the accumulation phase and the spending phase.
    • Making the transition from accumulation to spending is a very simple process for a knowledgeable investor.
  • The Most Important Article I Could Ever Write On Dividend Growth
    Wed, Apr. 2 ABBV, AFL, BEN 111 Comments

    Summary

    • The dividend aristocrats have delivered on dividend growth's greatest gift - market beating total return.
    • The formula for total return might be growing dividends supported by earnings growth and a low payout ratio.
    • The dividend aristocrats are populated with many companies that surprisingly still have low to moderate and very manageable payout ratios.
    • When we add the value filters of Vanguard's dividend growth funds we might be able to find the best of the best among the current 54 dividend aristocrats.