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  • The Dividend Growth Investor's Version Of 'A Christmas Carol' [View article]
    And here's something that will make you think ... On the ex dividend date of a stock or stocks held in a portfolio within the DG universe, using "fresh" capital, buy additional shares * in the amount of the price drop reflected by the (ex) dividend. Over time, this would reflect a "true" compounding of capital, as spelled out in dividend reinvestment theory, by exploiting the deficit created ( getting the stock at a (momentary) discount ) from the disbursement of funds from the retained earnings side of the ledger via the accounting mechanism.

    * this, in addition to the DRIP or "reinvestment" of the "received" dividend into shares
    Dec 20, 2014. 10:31 AM | 2 Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Thanks for the article. Non taxable is the way to go. The Roth IRA, if utilized properly, is one of the best "free lunches" offered. I stress to my younger clients to build wealth there as I have been aggressively growing wealth in my personal Roth since year 1994 and am now set for life ...
    Dec 19, 2014. 11:34 AM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Rebalancing does in fact add "value" to portfolios that are intended to be held for many decades. Rebalance premia garners it's results from the use of volatility, and investment managers usually reserve rebalancing for uncorrellated asset types, such as the 60 / 40 stock bond mix products.
    It can, though, also be applied to stock portfolios ( which are, of course, inherently volatile ).
    Examples: a $100K div payer stock portfolio mrk, jnj, mcd, ko, pg, mo, ed, ge, xom, mmm ( divs reinvest ) :
    1970 - 1990 buy and hold = $1,825,688
    annual rebalance = $2,455,925
    1991 - 2014 (Sept) buy and hold = $1,336,996
    ann rebalance = $1,801,149
    $90K non div paying growth stock portfolio amgn, altr, ann, emc, cah, cern, igt, nke, schw :
    1991 - 2014 buy and hold = $7,949,500
    annual rebalance = $19,712,300
    $100K utility stock portfolio awr, msex, wtr, CTWS, sjw, ugi, ed, wec, duk, oke :
    1991 - 2014 buy and hold = $2,090,695
    annual rebalance = $1,949,600
    annual rebalance = $2,090,695
    The utilities portfolio had the smallest premium; hence with the least volatility of the 3 portfolios.

    Some investors are reluctant to maximize the terminal value of their asset base in the accumulation phase because it is too complicated or too much trouble. Yet with the new platforms that offer simple rebalance execution ( Motif Investing is one with 30 stock portfolio) and the extra premium that rebalancing adds, at least an investor has another option towards achieving excess asset value growth during "accumulation".
    Dec 18, 2014. 10:26 PM | 1 Like Like |Link to Comment
  • What's More Powerful Than Compound Interest? [View article]
    Just make sure that novice investors understand that the dividend compounding effect is most useful during the start of and through the deaccumulation phase of retirement ( when you uncheck the reinvest dividends box in your brokerage account stock proceed options page and start receiving the dividends for income or have a new allocation of $ from which to derive income ).
    In the accumulation phase, most want to maximize their total asset base / "terminal value" up to the beginning of the deaccumulation phase. There are "styles" of portfolioss and portfolio factors that drive returns and asset bases into a higher terminal value than exclusively with a portfolio of stocks with growing dividends and dividends to reinvest.
    Dec 18, 2014. 09:39 AM | Likes Like |Link to Comment
  • Allocation Or Stock Selection - An Example [View instapost]
    Also, the process of the rebalancing of the stock / bond mix performs real geometric compounding vs. the "imagined" compounding of dividends in "dividend reinvestment" portfolios .
    Dec 18, 2014. 09:16 AM | Likes Like |Link to Comment
  • Another Take On Why Timing The Market Does Not Work [View article]

    The discovery and invention of robust tactical risk management process' involves a virtuous circle ( and hopefully not TOO many thousands of hours of ) of: 1) the acquisition of vast data series topical to economic, technical, monetary, equity metrics, etc. factors 2) the (luxury of) "time" and funding for testing and manipulating the data, and 3) aptitude and expertise in a) eliminating resulting trial and error experimentation on / and the data series that lead to erroneous outcomes b) retaining the data that leads to favorable statistical outcomes, further, to the development in the 4) aptitude and expertise ( and perhaps a little luck ) in conceptualizing / refining a "finalized" statistical multi-variable model. 5) a few years of real time portfolio management doesn't hurt either.

    As the financial products / brokerage / banking industry is 95% sales and marketing, there isn't ( the need for ) funding for tactical "research" divisions. This type of research takes place in academic institutions, hedge funds, and privately funded operations. Vanguard, taking a majority share of the retail exchange traded products, is certainly not going to contradict it's buy and hold ideology with the prospect of "tactical" allocation.

    Yet there is a growing population of boomer generation investors that needs geometric asset growth:
    Dec 17, 2014. 02:11 PM | Likes Like |Link to Comment
  • Are You Beating The Market? It's Important To Know [View article]
    The giant shift towards investing involving the buying and holding of "the benchmark" has been occurring ala Vanguard and and Fidelity. Investing in these products and "matching" the benchmark will be useful in quantifying and portraying realistic return assumptions to the large segment of "underfunded" "boomer" generation workers. These assumptions may realize surprising downward adjustments to their lifestyles. This taking into consideration that this population's average household retirement account balance is $111K*, remaining full time employment may be 10 years or less, and that these products achieve a historical sub 9% compound return over the next 10 - 15 years.
    * data from Center for Retirement Research of Boston College
    Dec 15, 2014. 10:20 AM | 2 Likes Like |Link to Comment
  • Dividend Growth Investors Focused On Income Earn Higher Total Returns [View article]
    You can use a combination of : 1) this calculator for constructing and calculating individual stock portfolio total return

    2) Morningstar is one of the best platforms for doing mutual fund research and return calculations
    Dec 14, 2014. 10:17 AM | Likes Like |Link to Comment
  • Stocks - The Usual Suspects Affect Friday, But Turn In Store [View article]
    Sounds like you might be going by feel ( or maybe you're using a systematic approach ? )

    The best way to enter a position in a decline of this nature is use a unemotional sytematic methodolgy to identify a valid pullback and then confirm the "turn up".
    First, using a tactical asset allocation model based on a statistical framework with multi decade price history, we can identify a favorable, neutral or high risk market environment
    Then, within that, we look for a pullback (viewed within the favorable the Nov - Jan 3rd period, of which you are right in identifying, for this particular application), and utilize a high confidence price oscillator rule set which can unemotionally pinpoint the "turn" and consequent entry.

    Since, at the beginning of the year the risk for 2014 had been verified as a neutral profile, we are able to identify a valid pullback on the Sp500 ( this week ) and apply the price oscillator. Now we will look to next Friday for the price oscillator to, mathematically, indicate the "turn" and hence an positional entry.
    Dec 12, 2014. 09:39 PM | Likes Like |Link to Comment
  • Adaptive Asset Allocation: Simulation And Experimentation With ETFs [View article]
    We appreciate multi product rotation strategies, but are wary of the limited data set that is available for backtesting. We are also strong proponents of a "cash" allocation component as, in a few instances, black swan risk events and market dislocations exceed a model's assumptions and create "correlation" risk between equities vs. bonds. We find that the QQQ and MDY provide the best terminal growth for the lowest expense.
    Dec 11, 2014. 11:32 AM | Likes Like |Link to Comment
  • Why Bother Diversifying, Just Buy Berkshire Hathaway [View article]
    You could also mitigate risk and add value by applying an empirical, statistically driven, peer reviewed tactical allocation model:
    Dec 10, 2014. 06:39 PM | Likes Like |Link to Comment
  • Why Buy-And-Hold Doesn't Work For Investor Wealth Builders [View article]
    Agree ...
    Dec 9, 2014. 10:19 PM | Likes Like |Link to Comment
  • Long U.S. Stocks? Caveat Emptor [View article]
    No matter how one extrapolates outcomes, the important thing is that your portfolio asset allocation decisions create value over a stated buy and hold benchmark (ex fees and transaction costs) over a long time frame. The buy and hold of a simple select 10 stock utility portfolio has created alpha; even over Jeremy Siegel's hallmark "SP10 dividend portfolio" and with much less drawdown over the last 24+ year sample.
    Dec 9, 2014. 01:17 PM | Likes Like |Link to Comment
  • Vanguard Dividend Growth - Beating The Market With Regularity [View article]
    Yes .... the choice of individual stock selection / dividend growth funds in modern retirement plans is a very large obstacle for many worker/investors; a factor not brought up very much in these articles.
    Dec 8, 2014. 05:59 PM | Likes Like |Link to Comment
  • 10 Reasons Why A Severe Drop In Oil Prices Is A Problem [View article]
    No need to fret ... the oil industry needs to convert it's operations over to solar, wind, and geothermal ( whose developement is (and needs to be) overtaking fossil fuel ) anyway.

    The master plan (coming soon)
    Dec 8, 2014. 10:43 AM | Likes Like |Link to Comment