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  • Ready To Retire? Do It With A Dividend Growth Portfolio [View article]
    "DVK is right, it can work in smaller accounts for individuals, my evaluations are handicapped by my own fees and need more scale to be a value to clients." - Doug Meeks

    How refreshing!! A money manager that takes his clients' interest into account BEFORE taking their money.

    I'll go out on a limb and guess that Doug has a very loyal set of clients.
    Feb 22, 2015. 01:23 PM | 6 Likes Like |Link to Comment
  • Ready To Retire? Do It With A Dividend Growth Portfolio [View article]
    "The question was about using dividend ETFs for DGI. What I think troll was saying is, most ETFs hit you on yield (they scrape their fees off their distributions), and many of them also have spotty records on dividend growth. But they are in the same ballpark as DG investing (sort of), so for someone not interested in buying individual stocks, they can stand in." - DVK

    As someone mentioned in an earlier comment, anyone can build their own "ETF" by using the Motif approach:

    You can add up to 30 different individual stocks and buy them as a block (sort of like an ETF) for a single commission of $9.95. You can choose to rebalance annually or not (rebalancing is a single fee of $9.95).

    I haven't used Motif myself, but I set up one of my own 'funds' there based on stocks I selected using a DGI approach. That Motif was built by selecting Dividend Challengers (from David Fish CCC) with a yield of 3+%, DG of 7+%, and Beta 1-.

    The equally weighted stocks I included were:


    Starting date was 8/18/2013

    That Motif was up 17% in the past year and it yields 4.3%. SPY is up about 14.5% and yields 1.8% for a comparison.

    Since creation the Motif is up ~32% vs. SP500's ~23%.

    I don't use Motif as I already have a large enough portfolio to buy 20+ positions in sufficient size to make the commissions small as a percentage. But for someone who is just starting out with small dollar amounts to invest using Motif might be a good way to spread small investments out over a basket of DGI holdings until it grows big enough to buy the individual stocks (say ~$50,000 ballpark).

    I think Motif might provide a good middle ground. You get a diversified DGI portfolio with only small commissions and no fees. The downside is it makes changing individual securities out a bit more challenging. Still if one sticks to high quality, core DG stocks, there shouldn't be much need to change them. For someone saving $500 per month a good DG Motif should reach a value where you can switch to individual stocks in 5 to 7 years.
    Feb 22, 2015. 01:08 PM | 1 Like Like |Link to Comment
  • The Bond Market Has Reached Tulip Bubble Proportions [View article]
    "45 bps for 2 years is ok if the market expects only one rate hike sometimes later and no more hike thereafter." - JoeNextDoor

    A 0.45% yield, when official inflation is running at 1.6% (actual inflation likely much higher), means your money is losing purchasing power for those two years.

    Might as well buy a beaten down tangible asset like oil, gold, or silver where you have a chance of maintaining or increasing your purchasing power going forward rather than lock in a guaranteed loss, IMHO.
    Feb 2, 2015. 08:31 AM | Likes Like |Link to Comment
  • The Bond Market Has Reached Tulip Bubble Proportions [View article]

    Federal Debt has increased by a factor of 20.8 since 1980. ($0.86 T to $18.0 T)

    GDP has increased by a factor of 6.4 since 1980. ($2.8 T to $18.0 T)

    One could argue that nearly ALL economic growth in the past 34 years is a result of borrowed money, as we have borrowed $3.25 for every $1.00 of economic growth.

    In fact, over the past 10 years or so GDP growth has been slowing while the accumulation of debt has been accelerating. We are nearing (or have already passed) the point of diminishing returns. Borrowing or printing more money will only serve to dig the financial hole that much deeper.

    The FED's monetary policy cannot correct our problem without going through a painful recessionary period of higher interest rates. ZIRP loans have been invested in non-productive or wasteful economic activities which only survive due to the low rates and/or by continually borrowing more to stay afloat. Any rise in interest rates will sink those concerns and allow the truly profitable businesses with sufficient natural, low debt margins to consolidate their market share by absorbing their inefficient competitors.

    Our country needs to stop borrowing and start saving again in order to return sanity to the lending of money. FED backed printing maintains the mirage of economic growth but it is only going to make things worse later on when the piper must be paid.
    Feb 1, 2015. 11:15 PM | 1 Like Like |Link to Comment
  • Ally Financial: 67% Of Tangible Book Value Is Laughable [View article]
    "The bailed-out former auto lending unit of bailed out GM, Ally Financial, now the largest non-captive auto lender, reported $355 million in nonperforming auto loans in Q3 2014, up 8% from a year earlier. And during the first three quarters, it charged off as uncollectible $341 million, up 18% from the prior year.
    Over 8.4% of subprime auto loans taken out in the first quarter of 2014 were already delinquent by November, according to an analysis of Equifax data by Moody’s Analytics for the Wall Street Journal. That’s the highest rate of early subprime delinquencies since Financial-Crisis year 2008."

    So I personally am not buying Ally's claimed book value as being dependable. I'm sure they can cook the numbers to support their claims by ignoring subprime the elephant in the room, but the growing trend in issuance and default of subprime auto loans doesn't bode well for Ally's balance sheet in the future.

    I'll pass on this so-called bargain.
    Jan 31, 2015. 11:23 AM | Likes Like |Link to Comment
  • My Roth Conversion Odyssey (Part 2) [View article]
    "But why would you take a 72T distribution out of an account (your Roth IRA) that's growing tax-free for the rest of your life." - horowitzcpa

    One case might be for someone who wishes to retire before reaching age 59 1/2 (assuming they have 'enough' in a Roth retirement account to support themselves off its earnings).

    By using SEPP they can withdraw a steady stream of income from the Roth without incurring the 10% penalty. At 59 1/2, or 5 years later, (whichever is longer) they can stop the SEPP and withdraw any amount from the Roth without penalty.

    The SEPP allows you to avoid the 10% penalty and use the Roth proceeds before reaching age 59 1/2.
    Jan 26, 2015. 07:58 PM | 1 Like Like |Link to Comment
  • My Roth Conversion Odyssey (Part 2) [View article]
    "Also, remember that taxes are due "as you go" so you may be assessed a penalty for not making estimated payments earlier in the tax year." - KKing

    True as far as it goes. However if you withhold (via payroll and equal estimated payments) more than the prior year's tax liability there is no penalty.


    Say your final tax liability for 2014 was $10,000 and you expect 2015 payroll withholding to be $8,000. If you make four $500+ quarterly estimated withholding payments there will be no penalty on your 2015 taxes.

    You may wish to withhold more depending on how large your Roth conversion is (to minimize your tax due with your 2015 return), but you don't have to worry about the penalty applying.
    Jan 25, 2015. 05:25 PM | 2 Likes Like |Link to Comment
  • My Roth Conversion Odyssey (Part 2) [View article]
    Thanks for spelling out the details of your conversion journey David. Articles like this one helped me recognize an opportunity in my own IRA/Roth planning back in December.

    The largest holding in my IRA dropped significantly in price just before the holidays. I was able to convert everything to my Roth account at the lowest IRA valuation my account has ever seen. Since then my stock has recovered significantly and I feel my retirement savings tax planning is now greatly simplified.

    I still have the conversion value to pay tax on, but I felt that the future valuation will only continue to grow so I am better off paying the "minimum" tax now than to continue paying tax on larger values later. That may not be the case for everyone, but it was in mine. In addition, the local business I own shares in experienced a rough year in 2014 so there are losses there to partially offset the conversion 'income'. If I'm lucky the tax I pay will be minimal and the tax benefits will be forever.

    Without articles like this one I would never have been aware of the opportunity to convert when it appeared.
    Jan 25, 2015. 01:19 PM | 2 Likes Like |Link to Comment
  • My Roth Conversion Odyssey (Part 2) [View article]
    "I am taking advantage of 72T distributions from my ROTH before age 59 1/2 which are tax free too." - Brucejfern

    A semantic clarification:

    The 72T distributions avoid the 10% penalty for early withdrawals. I believe that 72T distributions from a ROTH are always tax free.

    The IRS calls 72T distributions SEPP (Substantially Equal Periodic Payments):
    Jan 25, 2015. 12:55 PM | 3 Likes Like |Link to Comment
  • The Swiss National Bank's Move And What It Means For Gold Investors [View article]
    "And gold just got a lot cheaper in Swiss franc terms... " - Gene Jaquet

    Which might lead one to wonder if the SNB will be buying more gold any time soon, while the opportunity presents itself?
    Jan 19, 2015. 11:19 AM | 6 Likes Like |Link to Comment
  • Using MPT Factor Tilts In Stock Selection [View article]
    "I was trying to construct a Modern Dividend Theory to contrast to Modern Portfolio Theory. Step one was to get around the dividend-irrelevance theorem. It is hard to build a theory about something that you first dismiss as irrelevant." - DVK

    It is indeed a sad thing to witness those whose chief limitations are due to self-imposed unquestionable beliefs. To each his own though, I guess.
    Jan 17, 2015. 12:18 PM | 3 Likes Like |Link to Comment
  • Dividend Contenders: 48 Increases Expected In The Next 11 Weeks [View article]
    "Bought DLR just over a year ago ... this make me look like a genius." Dividend Nut

    I also got my DLR in late 2013 / early 2014 for an average price of ~$49.30, but it's due to Brad Thomas' genius, not my own. I was simply willing to buy what appeared to be a well run business at a time when the market could only see its faults and priced it accordingly.

    I must admit I'm pleased with the results so far. :-)
    Jan 17, 2015. 10:56 AM | 4 Likes Like |Link to Comment
  • Update: Gold Resource Reports Outstanding High-Grade Drill Results At Alta-Gracia [View article]
    Thanks for the timely update. I'm pleased as punch that I backed up the truck when GORO dipped down to $3.00 per share. I'm DRIP'ing the monthly 4% dividends and so far the shares are up over 20% (before the drill results were released).

    If we're really lucky the combination of expanding proven resources, increased recovery from the new mill, recently rising precious metal prices, and a possible increase in the dividend will drive the shares much higher into the high single digits, or beyond.

    That'd be nice.
    Jan 17, 2015. 09:59 AM | 1 Like Like |Link to Comment
  • Using MPT Factor Tilts In Stock Selection [View article]
    Nice application of the always touted MPT Factors in selecting DG stocks to own individually. I don't see how the anti-DGI crowd can be against that.

    I keep thinking you should have a subtitle for this article. It reminds me of one of David Fish's Smackdown articles. I'd call it an MPT Factor Smackdown. Ha!!
    Jan 17, 2015. 09:44 AM | 5 Likes Like |Link to Comment
  • A Real Dividend Growth Machine: 2014 Review [View article]
    After reading your first article some time ago I immediately started following your writings. Every new article continues to prove that was a wise choice to make. Your investing execution is spot on too. Thanks for taking the time to share with everyone here on SA.

    In addition to being happy to see you are doing very well I must admit that it's no surprise to me. You have established a framework for investing success that few bother to attempt and it will pay off in the end. Congrats and keep it going.

    Have you laid out a series of portfolio goals (income or total value) over the years until you reach retirement age? If so comparing your results to that series of goals would probably be a positive addition to your reviews, IMHO.

    If you can continue to compound the current portfolio value at 8.8% CAGR you will reach Chowder's $3 Million goal by age 65. Getting there by age 60 would require a CAGR of 10.5%. 13.1% CAGR gets you there by age 55.

    Congratulations. You've put yourself in a quite favorable position at your age. Well done and please keep posting your reviews going forward. Lots of younger folks will be able to see it's possible that way and that can't be a bad thing.
    Jan 12, 2015. 07:17 PM | 6 Likes Like |Link to Comment