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TaiPan

TaiPan
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  • Barron's 400 rebalance adds/drops multiple names [View news story]
    I thought the author said that the ETF for the Barrons 400 was BFOR. If so, it certainly does not outperform SPY or SPX over 1 and 2 years. Only YTD has it outperformed.
    Mar 23, 2015. 04:54 PM | 2 Likes Like |Link to Comment
  • The Time To Hedge Is Now! March 2015 Update [View article]
    Mark:

    If you're not trying to time the market, i.e. you always have these protective options in place, then your title might read : "The Time to Hedge Is ... Like, Whenever!!
    Mar 17, 2015. 03:46 PM | 1 Like Like |Link to Comment
  • Trading The Parabolic U.S. Dollar [View article]
    FXC
    Mar 17, 2015. 03:35 PM | Likes Like |Link to Comment
  • Trading The Parabolic U.S. Dollar [View article]
    If you have a Canadian brokerage account, you could invest in an S&P 500 ETF like XSP which is hedged in Canadian dollars. That means (I must remind myself from time to time) that when the USD declines versus the CAD, your S&P 500 gains are "converted" to CAD hence are protected against USD declines.

    I wasn't able to find such a beast in my US brokerage.

    Or, you could simply invest in ETFs representing other strong currencies like Canada, Australia, China (?), and even the Euro.
    Mar 16, 2015. 12:58 PM | Likes Like |Link to Comment
  • VYM: Challenging The 'Boring' In The Dividend Investing Narrative [View article]
    Author:

    I compared the price chart of VYM with SPY and SPX over several periods, including the peak-to-trough of 2007-2007. I did not notice much difference in performance. It must be in the dividend, then, that VYM outperforms SPX, as you say.
    Mar 14, 2015. 11:33 AM | Likes Like |Link to Comment
  • Trading The Parabolic U.S. Dollar [View article]
    All these trends will come to pass. The problem is knowing when. For those of us who have no confidence that we can predict when with any acracy, it is important to use filters and charts to know when to switch (from USD to EURO denominated ETFs, for example, and to gold ETFs fro another).

    I use ETF replay for my filters, and momentum charts. Anyone else care to share their tools? If desired, we could then go into greater detail about how our preferred tools actually work.
    Mar 14, 2015. 11:23 AM | Likes Like |Link to Comment
  • The Importance Of Total Return With Dividend Growth Investing [View article]
    I think the argument rehearses truisms, but doesn't give practicable investment advice.

    I think there is value in the author's pointing out how much a dividend-growth portfolio can be expected to change over time, i.e. that dividend stocks purchased today may not be held in the portfolio forever. But to try to quantify this point by choosing dividend stocks with a mere 5-year history of rising dividends (as of the early 2000's I recall) is to deviate seriously from the methodology most dividend investors follow. It would have been better consider stocks with a 25-year history of raising dividends as of te early 2000's, and to determine their survival rate.

    I am guessing that the survival rate of the 25-year stocks was much higher than for the 5-year stocks.

    But inevitably some dividend stocks will have to be replaced, maybe not as many as the author suggests in his study, but some. And of course it would be better to sell them high than give them away at low prices. No news here.

    So the argument that total return is important, that dividend investors who are forced to sell flagging dividend stocks for a loss will suffer decreased portfolio return as a result, is self-evident.

    Was it Twain or Will Rogers who advised "buy a stock if it goes up; if it doesn't go up, don't buy it"? Funny advice, but not useful to real investors. I think the author's advice to pay attention to total return is similar. Roughly translated, he is saying 'buy stocks that will go up, not stocks that provide a nice dividend but (unexpectedly) go down'.

    All dividend investors are saying is that stock declines don't matter much if the reasons for choosing the stock in the first place remain valid. The stock will recover, and the dividends will keep rolling in. But if it should become necessary to sell the stock, OF COURSE the price of the stock matters. Better to sell high and look for a good replacement than to sell low.

    Surely there is no disagreement here.
    Mar 10, 2015. 03:53 PM | 6 Likes Like |Link to Comment
  • 5 Common Errors Of A Dividend Growth Forecast [View article]
    "I would suggest that the yield of the replacement stock is very important for yield on cost projections."

    We agree on this; I did not say otherwise. My point was that the portfolio does not necessarily suffer a reduction of YOC if one must sell a stock because dividends are flagging. True, you must redeploy the proceeds from the sale into a new stock with an initial YOC of much less than 10%, but you have more capital to invest in this new stock, hence the dividend income will be similar to the income from the old stock.
    Mar 6, 2015. 09:02 AM | 1 Like Like |Link to Comment
  • 5 Common Errors Of A Dividend Growth Forecast [View article]
    Here is my take on (1) survivorship of stocks and (2) calculating dividend growth (DG) rates of the portfolio and of the individual stock.

    (1) If a DG stock starts to falter (delayed dividend, reduced dividend, declining net revenue, etc) sell it. Replace it with a DG stock from the bullpen, one that now seems more robust. Hanging onto a flagging stock that may well plunge later, as investors lose patience with it, and taking a potentially large loss, is quite detrimental to a portfolio's CAGR.

    Transaction costs of pruning a portfolio periodically are minimal if you are with a discount broker. This is not a major consideration.

    Taxes can be bothersome, but again a minor consideration compared to losing large because of a declining DG stock.

    Therefore, survivorship is not a major concern to me. I don't care if the stocks on a list generated a decade or so ago have largely survived to the present, because I expect to be pruning the portfolio consistently.

    (2) Calculating the yield on cost (YOC) of a portfolio is likewise relatively simple when the investor accepts the need to prune periodically. True, it would be nice to keep a DG stock in perpetuity, and watch its rising dividends create a phenomenal YOC in time. Some stocks will indeed do this. Others will not and will be replaced in the pruning process. If I prune well, I will have a capital gain when I sell a flagging stock, and if I re-invest all the proceeds into the new stock, the YOC of the portfolio will not change even though the dividend yield of the replacement stock is lower to start than the div yield of the stock replaced.

    If I add or withdraw money, Excel offers an XIRR calculation to determine how the portfolio is doing.

    A corollary concern is how to project the dividend yield of the DG stock before I buy it. I don't use forward calculations by analysts' ; they might well be fanciful, optimistic, or biased by the needs of the brokerage firm the analysts work for. Instead, I take the actual 1,3,5, and 10 year dividend growth rates, and use the lowest number to calculate the dividend in ten years. I don't buy any DG stock that reduced dividends in 2007-2009. If the dividend will give me a 10% YOC within ten years, I buy the stock. Of course, it must satisfy other selection criteria, to convince me it will probably be around in ten years. But (again) if it gets pruned from the portfolio in a mere 5 years, that's Life.

    My goal is to have a portfolio of solid DG stocks producing a YOC of 10% in ten years. My (unvoiced) expectation is to do better.
    Mar 4, 2015. 01:05 PM | 1 Like Like |Link to Comment
  • 5 Common Errors Of A Dividend Growth Forecast [View article]
    That was a rather time-consuming and clever way to research the issue. Thanks.
    Mar 4, 2015. 11:37 AM | Likes Like |Link to Comment
  • ETFReplay.com March Update [View article]
    The author seldom (if ever) answers comments. It's a shame, because the basic strategy seems sound, and we all could share our own ways to tweaking the approach.
    Mar 3, 2015. 07:48 PM | Likes Like |Link to Comment
  • 5 Common Errors Of A Dividend Growth Forecast [View article]
    Kurtis:

    How do you get the stocks in the Dividend Aristocrats list of 2001, please?
    Mar 3, 2015. 02:06 PM | Likes Like |Link to Comment
  • The Oil Trade Update [View article]
    Not 46.67%, Edmond; the return was 6.67%.
    Feb 22, 2015. 11:24 AM | Likes Like |Link to Comment
  • Bull Markets Climb A Wall Of Worry -- So Where Are We Now? [View article]
    Maya:

    What is the "8.5% repatriation tax", please? I am a Canadian investing (primarily) in US ETFs. Will I soon be subject to an 8.5% tax?

    Feb 21, 2015. 05:02 PM | 1 Like Like |Link to Comment
  • The Oil Trade Update [View article]
    One follow-on question, Ploutos, if you will. You use one-month periods to assess whether to be in or out of an oil ETF. Did you experiment with shorter periods? If so, I assume that shorter ones were not beneficial, right?
    Feb 20, 2015. 10:07 AM | Likes Like |Link to Comment
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