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Roger Nusbaum  

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  • Myopia And Market Function [View article]
    I might swap the word 'losses' for 'declines' in your first sentence. A diversified portfolio of funds and high quality individual issues tend to decline and come back without permanently impairing capital. Obviously not every holding can come back but I agree with the Benartzi premise that most of it is behavioral in nature.
    Nov 13, 2015. 10:18 AM | 1 Like Like |Link to Comment
  • Back To Bodie And The 10/90 Portfolio? [View article]
    I did not say it was better but you're looking backwards at a time when inflation was almost nil, arguably not enough inflation based on the Fed's stated objective. If there is ever inflation (as measured by CPI) it would makes sense to expect that TIPs (the treasury product, not necessarily a particular ETF) would outperform.
    Oct 30, 2015. 10:09 PM | Likes Like |Link to Comment
  • Back To Bodie And The 10/90 Portfolio? [View article]
    "and from Bodie's viewpoint, INFLATION risk should be mitigated by the TIPS exposure."
    Oct 29, 2015. 08:28 AM | Likes Like |Link to Comment
  • Is The 4% Rule Becoming The 2% Rule? [View article]
    the answer lies in sequence of returns. 70/30 for the guy who retired July 1st, 2007 very reasonably became very problematic especially if they had a market weight to dividend paying financial stocks.
    Oct 7, 2015. 05:43 PM | 2 Likes Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    yes, I still believe in 'whatever you got, 4%' more practically 1% every three months, of course less would be better if possible.

    a diversified portfolio will have some amount of yield (dividend and fixed income interest payments). maybe the yield is somewhere between 250 and 300 basis points meaning that another 100-150 basis points might need to be realized to get to 4%.

    in a diversified portfolio that includes individual issues and ETFs (this what the portfolios I manage look like) there are always names doing very well and some that are not doing as well. Just about any time I have needed to sell there have been at least a couple of names that can afford to be sold down some to be closer to their original intended target weight.

    Another source is selling (in the right type of account) for tax reasons like realizing a loss or gain or offsetting the capital loss/gain of a previous trade.

    Yet another source is from when tactical trades occur in the portfolio. Of course there is usually, but not always, visibility for needing to raise cash so selling a $20,000 position for tactical reasons maybe only $15,000 or $16,000 gets reinvested.
    Oct 5, 2015. 08:21 PM | 2 Likes Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    It seems like you're having a different conversation. The question was about "solid dividend stocks" and that is what I gave my opinion on. There are more "solid dividend stocks" from the financial sector that went on to fail or close to it than we are likely to remember.

    And obviously companies with long track records of dividend growth will occasionally cut or eliminate their dividends. We know this is true as the constituency of SDY has changed over the years.

    Fannie, Freddie, Lehman, Merrill Lynch, Wachovia, AIG, Citi are examples of failures or near failures with "solid" histories. Many of the other big banks were forced to cut their dividends to a nickel per quarter.

    That is the simple explanation to the reader's question. Your comments read like they are emotional, maybe they aren't but that is how they read, I am not comparing anything, I am addressing the readers's question about possible drawbacks to just owning "solid dividend stocks."
    Oct 3, 2015. 05:13 PM | 4 Likes Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    'failure' refers to companies that failed not a strategy
    Oct 2, 2015. 05:03 PM | 1 Like Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    15 or 20 years ago a portfolio of "solid dividend paying stocks that raise their dividend payouts each year" wold have reasonably included a healthy dose of financial companies that of course failed a few years later. The widespread failure caught many people off guard as evidenced by the weighting that financial stocks had in the broad indexes and the widespread fallout to many professionally managed portfolios as well as DIY portfolios. Is a smaller scale but similar event unfolding now with energy stocks and MLPs?

    Presuming to outguess the next one is a risky proposition IMO. Additionally I don't believe a portfolio with nothing but 3-5% yielders is very well diversified as opposed to a portfolio comprised of stocks with different types of attributes.
    Oct 1, 2015. 07:32 PM | 3 Likes Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    what you outline is the opposite of panic selling but I am telling you people panic and sell indiscriminately at a point of heightened emotion and desperation.
    Oct 1, 2015. 07:19 PM | Likes Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    even modest price appreciation from the equity portion of the portfolio can mitigate the loss of purchasing power. Year 1 take 4% of $500,000, year two take 4% of $512,000 and so on. market declines might mean taking less which is part of the flexibility I'm talking about.
    Oct 1, 2015. 07:17 PM | 1 Like Like |Link to Comment
  • Say Goodbye To The 4% Rule? [View article]
    I did not take the Pfau article to be a sales brochure for annuities. I am not licensed to sell annuities and have never sold one but I know plenty of people with them and they love them (I don't get it but there you go).

    As far as the 1% assumption for fees, I am pretty sure he is assuming that people hire an advisor.
    Oct 1, 2015. 07:14 PM | 4 Likes Like |Link to Comment
  • Bear Market Coming? Bear Market Here? [View article]
    no symbols mentioned in the post, as I understand it you disclose when you mention something you own.
    Sep 25, 2015. 08:58 AM | 1 Like Like |Link to Comment
  • Learning From Target Date Funds Without Actually Using Them [View article]
    Well the link provided discusses the term. Additionally I've written dozens of articles about liquid alternatives/diversifi... I have 11 years of context in past posts that I am working with, there is not enough room in a new post to recreate all that context.
    Sep 16, 2015. 07:14 PM | Likes Like |Link to Comment
  • A Dividend Growth Investor's Perspectives On Advisor Perspectives' 'Use And Abuse Of Dividend Strategies' [View article]
    He used the term dividend zealots, funny, I thought that one was mine, nice article Dave.
    Sep 11, 2015. 10:56 AM | 1 Like Like |Link to Comment
  • Stop Order Drawbacks [View article]
    be careful for the recoil, meaning something like the flash crash or other distortion. Your stop limit at $30 on a stock that was at $40 gets elected on a gap down to $20 and you now have a limit in at,say $29, the distortion the corrects itself and the stock then races up, executes your limit at $29 and closes the day at $40 where it started all while you are doing errands. Extreme example but this is essentially what happened.
    Aug 27, 2015. 08:50 AM | 2 Likes Like |Link to Comment