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Roger F. Goodrich

 
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  • A Diversified, High-Income, Lower-Risk CEF Portfolio For 2015 [View article]

    If one compares the price history of IBB and HQH, then indeed IBB wins. However HQH distributes about 5% in yield versus about 1% for IBB. Pulling income from a field of no to low paying stocks must be done with capital gains, as HQH does. Stocks sold cannot appreciate in the future. I don't know which is better, the return of HQH where shareholder income and management fees are extracted from portfolio total returns or returns from IBB where essentially only capital gains are left for shareholders to harvest. Its the same old game, one has to decide how to play.

    Being retired, I prefer income. And am willing to pay 'reasonable' management fees if they are earned.

    Roger
    Jan 3, 2015. 11:39 AM | 2 Likes Like |Link to Comment
  • A Diversified, High-Income, Lower-Risk CEF Portfolio For 2015 [View article]
    John:

    Thanks for the research and analyses. Good work.

    I looked into HQH. They only paid distribution in part with ROC for 2 quarters in 2009. The web site states that distributions are paid in stock, unless otherwise specified by the shareholder. Does anyone know if they pay in cash? Thanks.

    Roger
    Jan 1, 2015. 03:57 PM | 1 Like Like |Link to Comment
  • Higher Dividends With Less Risk (Part 3): Global X SuperDividend U.S. ETF [View article]
    Stanford Chemist:

    Wow, this is something to chew on. Thanks for the research and analyses. I am wondering why you are concerned with low volatility. Do you equate this with low risk? Risk of losing capital?

    I am retired and mainly interested in yield (when I buy or sell) and dividend growth (while I own the asset). Price variations are of secondary interest.

    Roger

    P.S. I could argue that if there is no sound when a tree falls and no one is there to hear it that there is no volatility in price if there is no one looking at it.
    Dec 26, 2014. 08:08 PM | 3 Likes Like |Link to Comment
  • Buy And Switch Beats Buy And Hold [View article]
    SDS:

    I have been thinking more about your comment and don't think I gave you a proper answer.

    The exact numbers and relationship between the 2 dma(s) is not vital. The S&P500 will go up and down in the future pretty much as it has done in the past. If you have a trigger set, like 50/200, it will trigger whenever the market changes course in a reasonable significant way. Smaller numbers (40/160) will cause more triggers, but will also pay more because the triggers are closer to market tops and bottoms. So it becomes a trade-off between the number of triggers you want to deal with versus the payout.

    In the case I demonstrated there were 20 trigger set in 43 years, probably close to an optimum number. Six of these were positive in that #shares went up. Using the additional criteria discussed in Part 2, one of the false alarms would turn from a false alarm to a positive by using TLT and watching the relative prices between triggers would have flipped another false alarm and increased the gains of one of the positives. These 2 schemes were only used in the period from 2003 on. Possible better results could be gained by using these techniques in the earlier years. I didn't do it because I didn't have a proxy for TLT. Using a loss limit also reduced losses in false alarms.

    Hope this helps clarify the issue.

    Roger
    Oct 9, 2014. 12:39 PM | Likes Like |Link to Comment
  • Buy And Switch Beats Buy And Hold, Part 2 [View article]
    varan:

    Thanks for the comment. I don't deny that another metric would not work better. My main point was that if you could find one that tilted the odds in your favor, you could tap some of that capital gain and convert it to income.

    I looked at the S&P500 200 sma crossovers and there are several (many) instances that I would call 'false alarms' where the crossover only lasted a few days to a couple of weeks. This was particularly true in the 1970s decade where the market had its ups and downs, but was essentially sideways for the whole decade.

    Roger
    Oct 8, 2014. 06:51 PM | 1 Like Like |Link to Comment
  • Buy And Switch Beats Buy And Hold [View article]
    SDS:

    Thanks for the comment (and the plug several days ago).

    I don't 'know' if it will work in the next 10 years. The market will be making major corrections in the future and if a scheme where you can put the sell high/buy low odds in your favor, then you can tap some of this as income, which is the thrust of the article.

    The reason for 50/200 was that in the past there have been several instances where there were the 'touch and go' instances I tried to illustrate. These, I believe, were cases where there was human intervention to prevent a crossover. The fact that the last one happened in 2002 may indicate now no one can afford to attempt it. It said to me that there were a lot of people looking at 50/200 and that in itself could cause it to work.

    Roger
    Oct 8, 2014. 06:35 PM | Likes Like |Link to Comment
  • Are SCHD And NOBL Good Dividend Growth Investments? [View article]
    CharReg:

    I address this to you, but it is not directed to you.

    In my article "ETFs for Dividend Growth Investors, Re-visited", I put together a 6 ETF portfolio consisting of VWO VEU EWC VDC ILF DLS. This group, weighted by the 'r' coefficient, has an 8 year non-l.r. dividend growth of 11.5%. Not a pure up and up curved line, but useable. 11.5% is not a bad number. Will this hold up? Time will tell. I believe it will ebb and flow with the underlying economies, which is OK with me.

    VWO's dividend growth from 2006-2013: 24.3, 47.1, 19.7, -53.7, 49.5, 11.2, 7.6, 15.4. This ETF covers Emerging Markets. You can see some good years in its DG and some very bad years. It goes, I believe with the local and world economies. You probably are aware that the world economy is not doing so well right now, so dividends are off. But it looks like VWO is coming back.

    If you are expecting to find ETF's that perform as well as 'most' DGI's portfolios, you will probably be disappointed.

    David's research is searching for such, and he (hopefully) has found one in SCHD. Time will tell. I am 81 years old and my ETF research is in another direction - what is out there today with a track record. As for me, again, time will tell.

    SCHD looks good and I will probably add it to my pile. But, that is only one ETF. For those who are seriously looking for ETFs, one is not enough, unless you are willing to plunk all your funds in one holding.

    This is a serious subject and I am glad to see the interest in it.

    Roger
    Oct 4, 2014. 04:35 PM | Likes Like |Link to Comment
  • Are SCHD And NOBL Good Dividend Growth Investments? [View article]
    Andysud:

    Try VEU, VWO, VT.

    You will find dg erratic, so you need to look multi-year.

    I have written a few articles on ETFs if you are interested.

    Roger
    Oct 3, 2014. 09:30 PM | 1 Like Like |Link to Comment
  • Are SCHD And NOBL Good Dividend Growth Investments? [View article]
    rosenose:

    I agree:
    ABT - split into 2 unknowns
    DRI - sold off big part of business, unknown use of proceeds
    SWY - bought out by hedge fund that is selling off parts

    SWAN: System Without A Name
    It's there: Google 'acronyms SWAN'

    Just joking..

    Roger
    Oct 3, 2014. 07:48 PM | Likes Like |Link to Comment
  • Are SCHD And NOBL Good Dividend Growth Investments? [View article]
    David:

    Good article! Thanks for the research and analysis.

    Part of the better yield in SCHD is due to the telecoms (VZ & T) in your list. They would bring down DG, but maybe OK. The fact that SCHD is limiting turnover is very good. If you have a winning team, why fire the players!

    I have been doing some research on ETFs. There are some that have a low turnover, reasonable expense ratios, good yield and acceptable DG. Performance (in DG) is spotty, but I believe that due to the underlying economies.

    Roger
    Oct 2, 2014. 04:40 PM | 1 Like Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Not sure I want to weight in on this discussion, but here goes...

    One has to realize that by dividing the dividend stream by a single number, you are really just re-scaling that parameter. If the divisor is a special number (original cost), then the YOC pattern has unique value and its values (for the most part) are not transportable across individual stock or portfolio lines. Therefore, it has limited value as a stand alone metric. More can be gained by looking at the original dividend stream. Those dollars have meaning.

    Repeating the table presented in the article (first 3 columns):

    Year YOC (%) Div Gr Rate(%) Inc in YOC
    2006 2.96 start start
    2007 3.50 18.31 18.24
    2008 3.87 10.43 10.57
    2009 4.15 7.27 7.24
    2010 4.47 7.65 7.71
    2011 4.90 9.76 9.62
    2012 5.38 9.63 9.80
    2013 5.81 8.05 7.99

    It should come as no surprise that the increase in YOC is the same as dividend growth rate (within round off errors). To me, the YOC string has no meaning or actionable wisdom. On the other hand, DGR has much. The first value, 18.31% represents what the portfolio can do when the economy is going full bore. One could look in the future for that same level to indicate that portfolio dividend growth is still healthy. The 2009 value, 7.27% is a low, but in absolute numbers, not too bad. We can relate that to other stocks/portfolios. From there we see 2 years of modest growth, then 2 years of a slight decline. From an absolute sense, this 'partial recovery' is somewhat in line with the economy, so no panic is necessary. I would, however, take a closer look at each stock's dividend growth numbers to see if this pattern was broadly based or the result of a single stock. If the latter, some action might be required.

    The author didn't point out in the article that YOC calculations are a measure of some combination of yield and dividend growth, a metric that could have value in comparing different stocks/portfolios with different combinations.

    If you take this thread to its logical conclusion, you arrive at the Figure of Merit formulas for both types of dividend growth, exponential and linear, that I have discussed in 3 SA articles. That is one approach.

    Another is a take-off of David Van Knapp's 10X10, 10% YOC in 10 years. How about 5X5, 6X6, etc.? This portfolio would pass the 5X5 (4.9%), but fail the next two. Food for thought?

    Roger
    Sep 5, 2014. 04:06 PM | 5 Likes Like |Link to Comment
  • Vanguard Dividend Appreciation ETF: The ETF For Future Income [View article]
    I agree with BoomBoom99. If your key metric is dividend growth, then one should look and compare with (the envelope please) dividend growth. My research indicates that there are several ETfs that have better dg track records than the ones that have dividend or dividend growth in their names.

    I own shares of VIG, but I have 27 other ETFs.

    Roger
    Aug 29, 2014. 01:09 PM | 1 Like Like |Link to Comment
  • Looking Forward, A Growing Dividend ETF Basks In Out-Performance [View article]
    Tom:

    When you say that DGRW has outperformed its benchmark index, you mean price-wise. That has less meaning to dividend growth investors.

    Also, DGRW has a turnover ratio (according to Morningstar) of 31%, meaning about a full overturn in 3 years. It seems to me that if one can pick 'good' potential (or real) dividend growth stocks, one should wait to see if that is forthcoming, rather than churn the portfolio.

    I am not saying that DGRW cannot or will not be a good dividend growth ETF, it is too early to tell. I wouldn't crow yet. My research shows that one can find good dividend growth ETFs in names that don't include 'dividend' or 'dividend growth'.

    Roger
    Aug 28, 2014. 12:18 PM | Likes Like |Link to Comment
  • Spending Principal In Retirement Portfolios [View article]
    Glinsight:

    Thanks very much for the kind words. As I indicated in Motivation C, a good part of this was to work out in my own mind what makes sense.
    Practically, a good part of it is simply Plan B.

    Roger
    Aug 1, 2014. 09:03 PM | Likes Like |Link to Comment
  • Spending Principal In Retirement Portfolios [View article]
    Larry:

    Thanks for the comments. In the first paragraph you have summarized very well what I attempted to convey.

    Sorry about the stiffness. I try to cram as much as I can into these articles. I always did better in my engineering courses compared with the 'liberal studies'.

    Roger
    Aug 1, 2014. 07:45 PM | Likes Like |Link to Comment
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