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Steve Hassett

 
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  • Dividends Don't Matter In Retirement Either [View article]
    Tadpole, the argument that paying dividends invokes financial discipline is sound. But so do share repurchases.
    Jul 19 03:06 PM | Likes Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Yes. Exactly!
    Jul 19 03:01 PM | 1 Like Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Alan, my point is that if you systematically exclude non dividend growth companies you reduce your set of possible opportunities. It stands to reason that this will reduce total return.

    I understand that this might imply increase complexity but that's not what I'm advocating. Spy and other diversified ETFs are pretty simple and can enhance total return.

    I understand that it gives you peace of mind and you understand and are comfortable with DGI. That it reduces risk. That's good. Stick with it.

    That does not mean it is the best strategy for everyone. Especially if it requires picking specific companies. Weren't Ford and GM dived growth companies? Analyzing specifics companies requires skill and hard work. Not just in picking new investments but weeding out those with poor prospects. While you obviously put in the time, many people don't.
    Jul 19 02:58 PM | 2 Likes Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Cooldude, Great comment. The set aside need only be equal to the required synthetic dividend stream for a defined period.

    You reminded me of a financial advisor who was pitching dividend fund. His argument was that companies that historically paid a high dividend out performed the market. The flaw was that his data was all backward looking. I asked if he could show a study that historically high dividend payers outperform the market going forward. Got no answer.

    My point was not that dividends are bad, only that it was a flawed selection criteria when it was the only criteria.
    Jul 19 12:20 PM | Likes Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Locust, I am not trying to be condescending at all. I was simply stating one very powerful reason why DGI makes investors comfortable.

    I understand the rationale. I'm only suggesting that dividend investors consider alternatives - especially low cost alternatives. Broad market ETFs like SPY, as I understand it, would not be attractive to a DGI but provide more balanced portfolio between growth and income.
    Jul 19 12:05 PM | Likes Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Alan, I'm not throwing stones at DGI. I'm simply suggesting that we are wired for certain behaviors. For example, in my book and articles, I've discussed how Loss Aversion is actually responsible for the equity risk premium.

    In order to make optimal investment decisions, it is helpful to recognize those biases and account for them. If you invest solely in high dividend, you are likely ignoring some great growth opportunities.
    Jul 18 12:49 PM | 1 Like Like |Link to Comment
  • Dividends Don't Matter In Retirement Either [View article]
    Since Dale quoted my article, I will weigh in. I think the reaction from many dividend investors is quite visceral. They prefer to be given an income stream rather than sell shares. This behavior is consistent with the “Endowment Effect” for which Daniel Kahnamen and Amos Tversky won the Nobel Prize. http://bit.ly/19A0grQ. It says that we value things we have higher and are often more reluctant to sell them. This helps explain dividend investor behavior. Selling shares to create income is painful compared to having a default choice of being given a dividend.

    This is how we are wired. It is normal to behave this way but it does not mean it is the best way to behave. I wrote my article for the purpose of exploring the alternative to dividend investing and present the logic of an alternative approach to creating income.

    I understand the peace of mind that an income portfolio provides. It is a very rational approach even though it does not maximize total return.

    What I find interesting is that some dividend investors get angry when presented arguments that show they are not maximizing wealth relative to risk.
    Jul 18 10:40 AM | 9 Likes Like |Link to Comment
  • Market Timing With The RPF Model: Spot Opportunities, Stay The Course, Avoid Mistakes [View article]
    By your definition it is not. I think of a broader definition of market timing that could include any tool that suggests when to buy or sell. You seem to be describing technical analysis and charting.
    Jul 9 11:18 AM | Likes Like |Link to Comment
  • Market Timing With The RPF Model: Spot Opportunities, Stay The Course, Avoid Mistakes [View article]
    Yes that is correct. I'd add that based on a forecast for one or more variables the model predicts where the market should be.
    Jul 9 11:14 AM | Likes Like |Link to Comment
  • S&P Fairly Valued Because 'It's The Same This Time' [View article]
    In case you missed it, here is my latest article on the subject of market timing with the RPF Model: http://seekingalpha.co...
    Jul 8 01:15 PM | Likes Like |Link to Comment
  • S&P Fairly Valued Because 'It's The Same This Time' [View article]
    In case you missed it, here is my latest article that explores the subject of market timing with the RPF Model: http://seekingalpha.co...
    Jul 8 01:14 PM | Likes Like |Link to Comment
  • Market Timing With The RPF Model: Spot Opportunities, Stay The Course, Avoid Mistakes [View article]
    MT, The model is a tool to help evaluate the market relative to your view on the inputs. Relative to earnings and interest rates, the market was fairly valued in 2007 on a trailing basis. The stock market was not in a bubble on this basis.

    However, housing was in a bubble driven by a bubble in mortgage backed securities which were underpriced relative to risk. When this burst, earnings declined and so did the market. If you had seen this coming, you could have profited with or without my model.
    Jul 8 10:55 AM | Likes Like |Link to Comment
  • Market Timing With The RPF Model: Spot Opportunities, Stay The Course, Avoid Mistakes [View article]
    As discussed in this article, the model is a tool for evaluating the market based on an investors view on on the inputs.
    Jul 8 10:46 AM | Likes Like |Link to Comment
  • Market Timing With The RPF Model: Spot Opportunities, Stay The Course, Avoid Mistakes [View article]
    Yes that is mostly correct. I'd clarify the point on interest rates by saying that the threat is a rapid rise of long-term rates above the 4.5% range.
    Jul 7 12:56 PM | Likes Like |Link to Comment
  • S&P Fairly Valued Because 'It's The Same This Time' [View article]
    Yes and I am working on an article to discuss the use of the model for market timing. It is also discussed in detail in my book.
    Jul 4 10:20 AM | 1 Like Like |Link to Comment
COMMENTS STATS
225 Comments
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