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Dale Roberts  

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  • In The Next Correction, Will You Be A Winner Or A Loser? [View article]
    Thanks Bob, absolutely. Lower volatility can be attained in a few ways. Hopefully history will repeat for you.

    Sep 18, 2014. 06:51 AM | Likes Like |Link to Comment
  • In The Next Correction, Will You Be A Winner Or A Loser? [View article]
    Sure thing, I'd hit the Vanguard learning 'centre' online. I have many articles on balanced portfolios. Check out Search risk and balanced portfolios on Seeking Alpha.

    See this article, Investing, It Ain't Rocket Surgery.

    you might even go with one of the incredibly managed Vanguard Wellington Portfolios. Those are hard to beat.

    But you should make investing very simple. It's one of the easiest things we can do in life. If you mimmick the wonderful Tangerine Portfolios it would be as simple as


    Though you'd lighten up on the Canadian a bit - we're only 3%? of the world economy.

    But essentially add some bonds and cash to match your risk tolerance level.

    Feel free to message me behind the wall.

    Sep 18, 2014. 06:49 AM | Likes Like |Link to Comment
  • In The Next Correction, Will You Be A Winner Or A Loser? [View article]
    Glad to hear that Jon, steady as she goes. A little extra powder on the side might help.

    Sep 18, 2014. 06:41 AM | 2 Likes Like |Link to Comment
  • My Dividend Growth Portfolio Business Plan [View article]
    Hi PT, all good business plans also allow for measurement of success as well. Just wondering how you are measuring your success (or need for improvement)?

    The first benchmark might be the broad market for total return SPY.

    And then on Dividend Growth, the aristocrats that outperform the market in the 2-3% range, annual, over time.

    Wondering what you are using as your benchmark(s).

    Thanks, Dale
    Sep 17, 2014. 11:28 AM | Likes Like |Link to Comment
  • Millennials: Bonds Aren't Just For Old People [View article]
    Great article, thanks Matt. Most money is lost or unrealized due to portfolio holdings not matching the risk tolerance level of the investors. Investors historically have turned 9 to 10% markets gains into 2-3%, they buy high when they are comfortable and sell low with fear and panic. Bonds are like shock absorbers, and one's need for bonds does not go away just because yields are historically low.

    Yields could stay low and range bound for decades, again.

    One can minimize bond price risk by staying to the shorter end, holding to duration, or creating a bond ladder, 1 to 5, or 1 to 7 years.

    In a bond bear market the bond ladders delivered in the average area of 4% annual returns, will reducing portfolio volatility. Getting the returns without the risk.

    This is an opportunity for millennials to not invest like their parents, aunts and uncles. And to do that, it will take proper risk management, and likely... bonds.

    Sep 17, 2014. 07:31 AM | 2 Likes Like |Link to Comment
  • Berkshire Hathaway: The Buy For When You Get An Itchy Trigger Finger [View article]
    When it comes to market corrections, there have been 10 down years for SPY from 1965, BRK was positive in all of those years, except for two years. :)

    That is incredible, but certainly odd.

    Sep 17, 2014. 07:10 AM | Likes Like |Link to Comment
  • Berkshire Hathaway: The Buy For When You Get An Itchy Trigger Finger [View article]
    Great article thanks. I recently had some wonderful gains when Burger King bought the wonderful Tim Hortons, and perhaps paid way too much for that company. I put over half of the profits into BRK.B for the exact reasons in your article. They know how to navigate market corrections. They know how to find value today (they are getting 9% on the BKW deal). It's a nice feeling to be in business with Warren and Charlie and friends.

    Sep 17, 2014. 07:06 AM | 4 Likes Like |Link to Comment
  • The 4% Rule Examined [View article]
    Hey, SPY is wonderful and does the trick, and most investors would be more than happy to get those returns. ha.

    Sep 17, 2014. 07:00 AM | Likes Like |Link to Comment
  • The 4% Rule Examined [View article]
    Hey Varna, 2008 was easy to navigate for retirees - with cash. Or with cash and bonds. It's 2000 era that was the biggest challenge. 3 down years in a row.

    2008 was one down year, big, but just one.

    With proper allocation one does not have to sell any shares or equity fund units in a down year.

    Sep 17, 2014. 06:58 AM | Likes Like |Link to Comment
  • The 4% Rule Examined [View article]
    Hi Mantra, just still wondering if you did back test your draw down approach? Say through the 2000s and the Great Recession.

    Thanks, Dale
    Sep 17, 2014. 06:53 AM | Likes Like |Link to Comment
  • The 4% Rule Examined [View article]
    Hi, yes the SP 500 with 3 years cash did work quite well. It was the 2000's that were more challenging to that portfolio. Article to follow, it is very interesting stuff.

    Cash can be king, bonds are the queen. ha. The stocks are the hare.

    Sep 17, 2014. 06:52 AM | Likes Like |Link to Comment
  • There's Very Little Chance Of Beating A Balanced Portfolio From Here [View article]
    Thanks 371, I have no idea where rates will go, they could rise or they could stay low and range bound for decades. But if one needs bonds for risk management, then they need bonds for risk management, that need does not go away because yields are historically low. And bonds and or funds could deliver opportunity of some modest gains but then providing cash available if and when the markets do correct. I think it's the patient investor and consistent investor (dollar cost averaging) who scores from here.

    Again, stocks are not that attractive from these levels either. Nothing looks good? ha.

    On bonds, certain prudent to manage the core portfolio to the shorter end or ladder. A bond ladder (to 5 or 7 year duration) even in a bear market might deliver 4%'ish according to studies. See my returns without the risk article.

    Sep 15, 2014. 06:18 AM | Likes Like |Link to Comment
  • It's Hard To Make A Case For Pessimism [View article]
    Hi Rose, the author was suggesting a price drop of that magnitude was unlikely, and I provided examples of when it did drop of to an even greater degree. That price drop may be important when it comes to risk, for some investors.

    Sep 14, 2014. 07:45 AM | Likes Like |Link to Comment
  • The 4% Rule Examined [View article]
    Hi Mantra, certainly the most troubling times for retirees are periods of high inflation. Nothing worked in the 1970’s, whether it was a successful stock and bond portfolio or all stock portfolio. The same holds true for dividend growth as a possible solution.

    If an investor starts at 4% yield and expect to be covered by dividend growth (as a strategy) the dividend growth must beat or match inflation. To know if your strategy would work, you would have to have the historical dividend growth rates over periods (for higher yielding companies).

    At first blush it appears that harvesting dividend at draw down level of 4% and then using dividend growth to match inflation would fail in a few periods such as the early part of the century, the 1940s and the 1970s. Inflation rates crested above 8% towards 14% to 18% in those periods.

    Did dividend growth rates of high yielders offer those high levels? I would think not. But one would have to know the numbers to be sure. One would also have to account for dividend cutters and freezers that might be removed from the portfolio, potentially selling at depressed levels and hence having a lesser portfolio value – less money to buy income.

    Investors of course, might be wise to confirm their theories before embarking on their investment strategy. You may have done that already. If so, I would appreciate seeing those articles or links on your blog.

    This brings up an interesting area. I will go back and test the 3 years cash with stocks and stocks and bonds through that 1970’s period, inflation adjusted of course. I am hopeful after looking at the real return rates that 3 years of cash might do the trick, or get close.

    Sep 14, 2014. 07:39 AM | Likes Like |Link to Comment
  • The 4% Rule Examined [View article]
    Hi Mantra, you would have to include the most important asset class in retirement - that cash - with the monte carlo draw down scenario tests. Again I used 35% bonds through two major corrections. I would guess it has a near 100% success rate historically back to the depression, again at an increased 5% start rate of withdrawal. 25% bonds would increase the success rate.

    Dividend growth investors would be wise to protect with cash as well - see 2008 and 2009. Many dividend growth investors got hit with cuts and reductions and were even forced to sell assets at a loss and then re-group, with less money - that is if they didn't have cash protection.

    I suggested you might need to harvest shares as your current portfolio is yielding below 3.5%, and your article suggests a 4% inflation adjusted draw down. Chasing yield may or may not be dangerous, but mostly again it is unnecessary. What matters is the underlying growth of the stocks - the growth component in the portfolio - backed by the earnings power.

    Retirement planning can and should be simple, but a prudent approach includes cash (for most) and some bonds will help as well. All said, nothing wrong with an all stock portfolio and enough cash to cover down periods for the more aggressive investor. :)

    Sep 13, 2014. 07:40 PM | Likes Like |Link to Comment