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  • Buybacks Vs. Dividends: PowerShares BuyBack Achievers Portfolio Comes Out On Top [View article]
    Thanks for "new" insightful research ... related article
    Aug 20 07:59 PM | Likes Like |Link to Comment
  • Retirement Strategy: How Dividend Income Grows To Staggering Levels By Reinvesting And Compounding [View article]
    Yes, and it all equates to total return. Accumulating the most $ total return (within your risk tolerance and preferably in a tax deferred account), whether it be with MLP's, growth stocks, futures, quality dividend stocks, small caps, emerging market stocks, precious metals, etc., in your accumulation phase up into the withdrawal phase of retirement, is the goal. The gains accumulated via these means (if other than quality dividend stocks), can then be applied towards purchasing a portfolio of quality dividend stocks with the attendant income stream. Armed with the knowledge that an average historical total return for a well diversified dividend growth portfolio is between 10% and 12% (includes the "staggering growth" that results from reinvestment) can lend perspective in weighing returns via other options in getting to that goal.
    Aug 18 09:39 PM | Likes Like |Link to Comment
  • Dividends Matter, But Not For The Reason You Think [View article]
    Diversification can also mean holding other stock universes that can ultimately provide more total return in the future than "quality" dividend growth stocks exclusively. Investor "A" with $1+ million and secure pension and employment within 5 - 10 years of retirement, will have different goals from investor "B" who has gotten a "late start" in asset accumulation with, say, less than $100K and no pension. Investor "B" investing exclusively in a large portfolio of dividend growth stocks ( represented by DRIPX fund with 63 stocks ) at 10% CAGR probably won't make up the asset accumulation shortfall easily within 20 years. By diversifying into a Small cap ETF with a proven methodolgy and low fee structure (NYSEARCA:VBR) and a growth ETF (NASDAQ: with same, investor "B" can get further towards their goals.
    The links below shows various stock portfolio universes and corresponding compound annual growth rates. "Dividend growth favorites" represents CAGR of a highest optimal return for a 10 stock dividend growth stock portfolio. DRIPX is a "real time" fund representing a more realistic portfolio of 63 quality dividend growth stocks and corresponding CAGR with inception in 1999. As we can see, over various time frames, the DRIPX garners about 60% of the highest optimal DG portfolio and performs at the lower end of the 3 universes.
    As the different styles go in and out of favor, the diversification would cover the market "favoritism" and provide a higher CAGR.

    If investor "B" were more "intrepid", then they could use empirically derived tactical asset allocation with risk mitigation in the same manner here:
    Aug 16 06:25 PM | 1 Like Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Maybe it could become a new cognitive bias; "Dividends as free money illusion"
    Aug 13 11:33 AM | 1 Like Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    That chart has been used numerous times. It really should be annotated with CAGR. 10.5% - 11.5% CAR seems to be about the return that has been norm in these articles depending on what/ # of stocks are in the portfolio. Now back in 1972, if you would have bought and held 10 of the "survivor" stocks that happen to be DG "favorites", the return would be 14+%.
    Aug 13 11:22 AM | Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    Yes, but even the ex-div date stock price adjustment is debated in these articles / comments !
    Aug 12 01:28 PM | Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    Chart link below representing "real" time performance of Dimensional fund DFSVX Small Cap value, 3 factor Fama and French methodolgy compared to M63 fund DRIPX ( excellent benchmark of the DG methodolgy, IMO; dividends reinvested for you within the fund ) . Vanguard Small cap value (NYSEARCA:VBR) could also be used for small cap .
    Both Small Cap and DRIPX could be good choices for a "diversified" portfolio, each with the same volatility, and without doing the maintenance required ( making annual rebalancing adjusments, individual purchases, setting up DRIP plans, dividend reinvestment transactions, etc.) for a large portfolio of individual DG stocks ( unless the average person "has time" for doing such activities )
    Aug 12 12:01 PM | Likes Like |Link to Comment
  • Why Dividends Matter Until They Don't [View article]
    Don't count out small cap value. With risk mitigation (Market Map tactical model; hopefully, eventually to use the process as an ETF ), small cap value could be a part of a diversified portfolio in an investors accumulation glide path years.
    K. French data used in calculations below.

    We agree with the tenents of a dividend growth portfolio. Yet, it depends where one is in their accumulation path. Are they behind ? How much have they accumulated and how old are they ? If they are "older" and are behind or "late starters", then 100% dividend portfolio won't get them to where they want to be. This is a population that needs to be served and they need to accelerate their accumulation for any possible chance of a sustainable retirement.

    Also, M63 fund DRIPX, an excellent representative "benchmark" for dividend growth portfolio had a -52% drawdown from 2007 - 2009 ( if that sort of thing is relevent ) . All DG portfolio drawdowns are not created equal.;dataParams=%7B%22zoom...
    Aug 11 04:38 PM | Likes Like |Link to Comment
  • How Dividends Don't Matter In Retirement; A Few Examples [View article]
    Hard to get a handle on what % of the population has exposure to the stock market or even knows how to open a brokerage account. In my social sphere, I know a "handful" of people. And of that handful, just a couple/few seem to grasp basic concepts ( and these are very intelligent people with master's and Ph'ds ) and have actually conceptualized some sort of "plan" above just holding mutual fund(s) in their 401K's or handing money over to a financial advisor. There seems to be a small population on these DGI forums that participate in discussion and who grasp some/the "concepts". If there is dissonance amongst the practitioners of the method, then how can the "financially uneducated" understand it ( not to mention "value trades, real estate, momentum stocks, options, debt, emerging markets, private equity, ipos, or other forms of trading/investing"?
    Aug 10 10:16 AM | Likes Like |Link to Comment
  • How Dividends Don't Matter In Retirement; A Few Examples [View article]
    Berkshire H is fine but, since in one's accumulation years, you don't care / not supposed to care about the fluctuations in the market ( or so the theory goes in the buy and hold, dividend growth portfolio "mindset" ), why not try to accumulate, tax deferred, as much as you possibly can with small cap value such as Vanguard small cap value (NYSEARCA:VBR), and then right after you retire, construct the high yield / low payout portfolio for income?

    Small cap value VBR vs. Berkshire H vs. benchmark Dividend portfolio M63 ( total return )
    Surprisingly, volatility was the same between the small cap VBR and the Dividend fund yet small cap accumulates more $ for future dividend stream ...
    Aug 9 04:04 PM | 1 Like Like |Link to Comment
  • A Volatile Cocktail: A Poor July Ahead Of The S&P 500's 'Most Dangerous' Months Of The Year [View article]
    Our work shows moderate drawdowns during Aug and Sept. and moderate loss during the 3rd qtr. ( historically ).

    And if not, we still stay focussed on 20 years investment time frames
    Aug 7 10:50 AM | Likes Like |Link to Comment
  • A Volatile Cocktail: A Poor July Ahead Of The S&P 500's 'Most Dangerous' Months Of The Year [View article]
    Thank you sir .. will do
    Aug 6 01:36 PM | Likes Like |Link to Comment
  • A Volatile Cocktail: A Poor July Ahead Of The S&P 500's 'Most Dangerous' Months Of The Year [View article]
    Do you have an .xls for the info depicted above contained in the "maximum drawdown for the SP500 in Aug and Sept" plot charts ?
    Aug 5 05:14 PM | Likes Like |Link to Comment
  • Does Share Price Recover After Dividends Paid Out On The Ex-Date? Part 2: A Case Study With Exxon Mobil [View article]
    The dividend, for whatever rationale for why it is paid, out of what account it comes ( retained earnings, sale of equipment, etc ), if the stock price/company value is adjusted/reduced when distributed, etc., is something that the shareholder has to make a decision about (as compared to a non dividend payer). Ultimately, total return calculation is where the rubber meets the road.

    If one was transported back to 1995 ( Crosetti's date reference ) to weigh selections for a portfolio with couple of the non div paying, institutional tech "darlings of the day", and the fast food darling (NYSE:MCD) on the list, and then fast forward...

    INTC ( non div payer up until until recently ) would have returned 13.1 % CAGR 1995 - present ...
    MSFT ( same non div .... ) return 1995 - present 15.6 %
    MCD would have returned 6.38% CAGR 1995 - present if you hadn't reinvested dividends ( vs. 10.8% with reinvestment according to Crosetti )

    Whether or not the stock price / value of the company gets "adjusted" during 19 years of div distribution "dates", MCD returned as shown above ... And, as the phrase "compounding of dividends" is thrown around, 10.8% seems like an "OK" return for one of the great powerhouse "growth" companys that pays dividends vs. other powerhouse "growth" companies that did/do not. Yet, if the shareholder has to be responsible for the distributed proceeds and reinvests them back into an exquisitely managed company ( hence the shareholder is making an excellent judgment on for whom the proceeds are given ), then why is the return not greater ?

    This is proof the in the "accumulation phase", one MUST reinvest the dividends ( if the the company is well managed ) or they are they are shortchanging themselves ( at least in this simple portayal ).
    Aug 4 12:27 PM | Likes Like |Link to Comment
  • If Dividends Reduce Intrinsic Value, Will Dividend Investing Become Inferior? [View article]
    You either believe that a dividend reduces the intrinsic value of the company / share price on ex div date or you don't. There have been valid, yet complicated arguments on both sides. Aside from that, running a portfolio through a reinvestment calculator is as empirical of a way as any in performing a true analysis of past total return.
    Also, the M63 fund is a good benchmark in which to compare results ( with the exception that the data sample is not large; back to 1999). If you (have) manage(d) to achieve > 6% per annum over the same time frame with other portfolios / vehicles with the same volatility and comparative management time, then you're that much closer to retirement asset accrual goals.
    Jul 31 12:02 PM | Likes Like |Link to Comment