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  • The Dividend Aristocrats And Higher Interest Rates [View article]
    Lots of very good comments from the readership on this article. I think a variety of opinions adds needed depth to the discussion. Thanks to all for reading and commenting.
    Mar 6, 2015. 06:51 PM | Likes Like |Link to Comment
  • The Dividend Aristocrats And Higher Interest Rates [View article]
    I agree vgeorge - when the Fed does start raising rates, the pace could be slow and the terminal rate that they reach in this business cycle will not approach the 5.25% we saw in the last cycle - even the 3.5%-4% long-term target for Fed Funds rate in the FOMC projections appears high today.
    Mar 6, 2015. 06:50 PM | Likes Like |Link to Comment
  • The Dividend Aristocrats And Higher Interest Rates [View article]
    Certainly, -8% is not a rout when you factor in riskier asset classes, but as you point out this was a historically bad year for Treasuries.
    Mar 6, 2015. 06:48 PM | Likes Like |Link to Comment
  • The Dividend Aristocrats And Higher Interest Rates [View article]
    Please link the article Dave
    Mar 6, 2015. 06:45 PM | Likes Like |Link to Comment
  • The Dividend Aristocrats And Higher Interest Rates [View article]
    Subdued interest rates and stocks at all-time high with expanded multiples is an historic anomaly. Usually when stocks are making new highs, we see higher interest rates to account for inflationary pressures in the economy - not the case in 2015.
    Mar 6, 2015. 06:44 PM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Higher Interest Rates [View article]
    I am using the S&P 500 as the most commonly cited market benchmark, but you are correct that this article is comparing a equal weighted index (DA) versus the cap-weighted S&P 500 Index.
    Mar 6, 2015. 06:42 PM | Likes Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    For those interested in a study of the impact of higher interest rates on dividend-paying stocks, please see my recent article:

    http://seekingalpha.co...
    Mar 5, 2015. 10:57 AM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    Nor me - this article is about developing an intuition into potential sources of risk-adjusted returns for readers
    Feb 28, 2015. 01:59 PM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    This is the S&P 500 Total Return Index and the S&P 500 Dividend Aristocrats Total Return Index. The graph is the cumulative total return (including reinvested dividends) of the two indices since the start date. You will not find a price graph on yahoo. ETFs that attempt to replicate this index have not existed for much of the time horizon, but I believe that this is the best way to examine total returns of this strategy versus the market benchmark over a long enough time intervals to capture multiple down markets.
    Feb 25, 2015. 02:40 PM | 4 Likes Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    2 Reb - that is an interesting study. Could you please share the link?
    Feb 24, 2015. 07:22 PM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    There is no survivorship bias here.
    Feb 24, 2015. 07:20 PM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    This index shows the total return of the constituents that met the Dividend Aristocrats qualifying criteria. Non-qualifiers are "sold" each January when the index is rebalanced.
    Feb 24, 2015. 07:19 PM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    You are correct, the issue is the same as for the S&P 500. This strategy owns the constituents that met the Dividend Aristocrat qualifications for a given year. The index is rebalanced each January. If a stock has underperformed because it has cut its dividend, the index performance is capturing this performance in the index total return.
    Feb 24, 2015. 07:17 PM | 2 Likes Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    The source data is S&P, the purveyor of the index.
    Feb 24, 2015. 07:15 PM | 1 Like Like |Link to Comment
  • The Dividend Aristocrats And Maximum Drawdowns [View article]
    David is correct on the approach, which is why I am using index returns. It might be easier to think in terms of the broader S&P 500, certainly we see additions and deletions each year (M&A, bankruptcy, IPOs of eligible firms, etc.). In the case of the Dividend Aristocrat Index, the index is rebalanced each January, and constituents that no longer qualify are removed. Constituents that newly meet the inclusion requirements are added. You can review the methodology yourself through the linked microsite. http://bit.ly/TP3UYO
    Feb 24, 2015. 07:14 PM | 1 Like Like |Link to Comment
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