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extremebanker

extremebanker
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  • Straight Talk On The 4% Rule [View article]
    Many times you don't have to leave the country to find places with much lower cost of living. Rural, small towns usually can offer much lower cost of living than large urban centers. I prefer small towns that are fairly close to large urban centers (one hour or less) so you can have the best of both worlds. Many people sell their urban dwellings and purchase cheaper rural homes and use the difference to supplement their retirement income.
    May 1, 2015. 04:01 PM | 9 Likes Like |Link to Comment
  • Straight Talk On The 4% Rule [View article]
    DVK:

    Great article on a very important topic. I believe the most common error retiree's make is they don't have enough risk in their retirement portfolios as inferred by Mr. Bengen. I know many people who have drastically cut their standard of living because they relied too much on bank or credit union interest. That being said, I also think each investor should have a strong risk management program or the ability to hedge during troubled markets. Good risk management allows one to be more aggressive with the markets because it reduces volatility.

    Personally, I expect to move more of my portfolio to Growth and Income as I move towards retirement. I recently commented on the fund FPURX which has a great 20 year track record. No guarantee on the future but one could have withdrawn 4% of their balance each year and their principal and income would have doubled over the twenty years. There were a couple of years when they would have withdrawn less than the previous year.

    The most important thing each investor should do is to save and invest enough to be sure they can get by on 3% since that virtually guarantees they will not run out of money.

    Nice article.
    May 1, 2015. 02:08 PM | 6 Likes Like |Link to Comment
  • My First Quarter 2015 Portfolio Review [View article]
    So how much has your dividend income grown?
    May 1, 2015. 12:53 PM | 1 Like Like |Link to Comment
  • Mr. Valuation Disagrees With Henry Blodget: 'It's A Market Of Stocks' Is Not A Meaningless Phrase [View article]
    I determine good performance or bad performance based on many factors other than the stock market. Yes, I have a growth strategy that I expect to beat SPY each year. So far so good. I also have an income strategy that I compare against treasuries that has nothing to do with stocks. Between these two I have a growth and income strategy that I have used since 1987. This strategy has outperformed the stock market over the long term because it goes to cash during serious market corrections. It will underperform the stock market during strong bull markets. For me, good performance is getting decent returns (much better than risk free returns) with risk that I can sleep well with.

    I think every investor should have and know what their edge is. For Buffett, a lot of his success has come from two factors. The leverage he gets from insurance float and the fact that dividends in a C Corp are not fully taxed. For me, I use tax deferral to improve compounding. I use momentum, size and beta to improve performance. I use moving averages to reduce risk. I use negative correlation to improve performance.

    Each to his own. Dividend stocks represent 15% of my portfolio. The advantage of this strategy is to grow income, defer taxes, gain the step up at death, pay less taxes on qualified dividends and grow total return. These stocks are buy and hold so I really don't compare them to an index because I don't plan to sell them anyway. I have a lot of tax liability with these positions.
    Apr 29, 2015. 08:57 AM | 2 Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    Six:

    I agree that 3% should meet resistance for a while until inflation picks up some steam. In 2006 the yield curve inverted. Fed Funds was at 6% while the ten year treasury was only 5.25%.

    http://bit.ly/WGQM6i
    Apr 28, 2015. 09:50 AM | Likes Like |Link to Comment
  • Bought iShares MSCI Poland Capped ETF With An Investment Strategy Discussion Introduction [View article]
    South:

    My primary investment theme this year is to take advantage of the strong dollar. For me, this simply means adding exposure to EFA and EEM. So far so good.

    As you know, I use relative strength or momentum to help determine allocations. EFA and EEM have climbed to the top of the pack based on three month momentum. I only review a limited number of funds which is adequate for me.

    A simple explanation is foreign markets should be more competitive with the large increase in the dollar. I love it when momentum validates a good fundamental theme. Dividend yields are also better on foreign stocks.
    Apr 28, 2015. 09:36 AM | Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    There have been many corrections in the bond market over the last thirty years. There will be another one again. Maybe soon. Maybe not. The point is there will not be a long term rise in interest rates. Markets will correct quickly when rates rise and then we can start another move down in interest rates.
    Apr 27, 2015. 08:47 AM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    Rich: Yes it was many moons ago. I don't view the DGI threads like I use to since I feel dividend stocks are pricey at this time. I still manage a large dividend portfolio but I have added almost nothing for a good while.
    Apr 25, 2015. 08:41 AM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    DVK:

    No problem!
    Apr 24, 2015. 07:53 AM | 2 Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    Rich:

    I finally checked out the Variable Insurance product that Fidelity has. It is by far the best one I have seen.

    I am nitpicking but all investments have forex exposure since the dollar can go down just as fast as it goes up.
    Apr 23, 2015. 03:16 PM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    DVK:

    You just wrote an article on the benefits of SCHD. I simply pointed out that FPURX may be another choice for someone who wants to simplify things. (For their spouse or non interested relative). FPURX even varies the mix of stocks and bonds to create some semblance of a diversified portfolio. Maybe the wife is not comfortable with the volatility of an all stock fund. I have no idea what the future will bring and neither do you. SCHD doesn't even have a twenty year history not that it makes any difference. I thought the discussion was about how to simplify things for your heirs. FPURX could be a one stop solution to a portfolio with some diversification.
    Apr 23, 2015. 03:06 PM | 3 Likes Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    Withdrawing 4% from FPURX each year for the last twenty years creates a portfolio that has more than doubled and income that has also more than doubled.
    Apr 23, 2015. 01:12 PM | 1 Like Like |Link to Comment
  • Why I Purchased Schwab's U.S Dividend Equity ETF As A Dividend Growth Investment [View article]
    Market Map:

    I currently use this strategy so I am thankful for the numbers. Had not seen a study this long before.

    I use a six month MA instead of ten though.
    Apr 22, 2015. 01:19 PM | Likes Like |Link to Comment
  • It Takes Courage To Not Run With The Bull [View article]
    South: Treasury yields are always paltry when compared to other investments available. The reason for me to buy TLT is to take advantage of the negative correlation it has with stocks. The current correlation of TLT to SPY is -.42 according to ETF Screen. Yes we have had a 30 yr. bull market in bonds. This long term bull market has been interrupted many times by substantial corrections. I am certain it will correct again. If it is a fairly substantial correction I will not own TLT. (break 6 mo MA) Can correlations change? Absolutely, but this has been an investment theme for many years.

    http://bit.ly/1ySfcUQ

    http://bit.ly/1DhMybV
    Apr 22, 2015. 10:12 AM | Likes Like |Link to Comment
  • It Takes Courage To Not Run With The Bull [View article]
    South: TLT can be used many ways other than a buy and hold position. A simple strategy using TLT is to switch between VTI,EFA and TLT on a monthly basis based on three month relative strength. The results are quite impressive. Since 2003 the CAGR is 18.7% with a sharpe ratio of 1.07 and max drawdown of 17.1%. No down years during this period which includes 2008.
    Apr 21, 2015. 08:55 AM | 2 Likes Like |Link to Comment
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