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  • The Stock Market And Its Master [View article]
    Thank you for the link. I scan this article. 7-9 data points cannot make a statistics (usually it starts from 30) and 1 year might be not representative. If XLU is outlier we have flat horizontal line at about XLF level.
    Jul 28, 2015. 11:41 AM | Likes Like |Link to Comment
  • One Design For A Retirement Income Portfolio [View article]
    IMO first step is to decide on assets allocation based on available and projected capital invested in portfolio and money needs in retirement. Then /for stocks/ to decide kind of equities to have. Then /for DG portfolio/ to decide initial yield accepted, min DGR, and how many DG stocks to have. I addressed the last question in
    Jul 28, 2015. 01:26 AM | Likes Like |Link to Comment
  • Re-Testing The Dividend Spectrum For Total Return Vs. SPY, DIA And Berkshire Hathaway [View article]
    This is more realistic backtest then before. I think the result dismisses the common claim that DGI underperform SP500.

    "I am 39 years old and expect to retire at 65. Therefore my investment timeframe is 25 years." - There is life after retirement 8-). I'd add 35 years to investment timeframe.

    "I live in Ireland where there is little broker competition". You might be able to use Fidelity to lower fees.

    There are DG stocks in CA, AU, EZ - and they are more attractive than US for Europeans now.

    Jul 27, 2015. 10:04 AM | Likes Like |Link to Comment
    Yep. I think it is worth to keep emergency fund and adjust it to inflation.
    Jul 26, 2015. 01:49 PM | Likes Like |Link to Comment
  • Scanning The SA Family For Alpha: Sudburyjakes [View article]
    Regarded Solutions
    Thanks for bring up a good comment. How do you find gems in noise?

    It would be nice if you outline your investment approach in SA article or blog.

    In my opinion: the less you depend from losses, the less investment mistakes you make.
    In stocks losses are usually related with invested capital although negative dividends have happened (
    Currently you can find bonds with negative interest (I think investors in such bonds need to see a doctor). CDs and many bonds now are proposal to loose purchase power of money (I think investors in these need to take Math101 class if they do not know this).

    Jul 26, 2015. 08:26 AM | 2 Likes Like |Link to Comment
  • Knowing What Type Of Owner You Are Is Key To Your Investing Strategy [View article]

    Thank you for very good article, I guess it was influenced by another one in SA.

    To comments
    Yep stocks and e.g. houses can be viewed similar: you want low price when you buy, you want high price when you sell, you do not worry when you live in house or own stock (I ignore shorts here).
    But any your want doesn't count in market. Prices are independent on single investor wishes (except you can corner some stock). So Eli's classification is good to eliminate some worries different types of market players should have and should not have.
    BTW, I live in the same house in Silicon Valley near San Francisco for 15 years, didn't knew it price after I bought it (well I had idea on price direction). Now we are discussing where we want to live in forthcoming retirement (suggestions are welcome) and I have better idea about my house price. FYI: sorry folks now a good 2bedroom condo in San Francisco is ~2M$ and house ~4M$. I guess it might be an indicator of forthcoming inflation.
    Although I prefer to be 3rd type B&H investor I know that RMD will turn me in 2nd type in several years (so I want Congress to cancel it but they are similar to Mr. Market and ignore my wish). Also some events with companies might lead me to sell their stocks (I did and will NOT sell at any div. cut - the reasons are in My spreadsheet collects stock prices but tells me only stocks which moved ~ 10% in a day. I try to find why and mostly ignore.
    Buyandhold 2012: I guess it is more vital for trader to select the right stocks than for you.
    Fcfrag: I'm a Contrarian (in life and investing) but this style fits to Eli's classification (type 2).

    Jul 26, 2015. 02:27 AM | Likes Like |Link to Comment
  • The Stock Market And Its Master [View article]

    Thank you for explanation. You have outlined your experience but not research and their results as pointed in the phrase "Our research shows that dividends can predict roughly 90% of the movement of stock prices over the long-term." from this article. Because most of scholar papers show R^2 ~ 20% hence they cannot "predict roughly 90%", so I asked....

    "worries about dividend cuts too often turned into realities. " - I guess it depends on the level you start to worry. Fortunately dividends are sticky in US and many BoDs try hard to avoid cut. Actually dividend cut prediction models will be the object of research project few SA folks are going to start this fall (door is open).

    "We want it /high dividend growth/ to be highly correlated to price growth and highly predictable."
    I'd agree with 1 sentence above. I don't know how high (!) dividend growth can be predictable for long run. I'd agree that price will growth IF high dividend growth occurs for few years (let say N years) and IMO price growth can be within (0.6 - 1.4)*N period. Robert Allan Schwartz demonstrated that N isn't long for high dividend growth.

    Good luck!
    Jul 26, 2015. 01:41 AM | Likes Like |Link to Comment
  • Dividends & Income Digest: 3 'Common' Mistakes Dividend Investors Make, Or Do They? [View article]
    I invest in DG (~85%) and high yield /HY/ (~15% of portfolio) stocks from end of 2006 and was value investor before. I'd not say that I CHASE yield because I wait right low price (i.e. high yield) sometimes for few years. Some still on watch list.... I'd say that I'm wait yield. Dividend investor needs to understand why stock has high yield to avoid so-called value traps when company can cut dividends. I'm forming research team to develop models for div. cuts (send me SA email if you're interested).

    TR was much more important for me during value investor period. My goal to replace spending during accumulation phase by dividends is achieved, so I'm going to retire soon. Although I'm not pure B&H investor (in this case capital gains are totally irrelevant), I do not plan to harvest my gains even without social security benefits for next several years.

    I use Excel for my quite diversified portfolio monitoring - details are in

    Jul 25, 2015. 11:48 PM | Likes Like |Link to Comment
  • Dividends & Income Digest: 3 'Common' Mistakes Dividend Investors Make, Or Do They? [View article]
    Michael Cutler
    Contribution of dividend in long run - see Just compare SP500 with and without div. reinvested (better in linear scales graph).

    There are no studies for selection of DG stocks for long run. David Fish mentioned Ned Davis Research but it should be taken with a grain of salt -

    Jul 25, 2015. 02:43 PM | 1 Like Like |Link to Comment
  • The Stock Market And Its Master [View article]
    Rising Dividend Investing : Thank you for good article.

    "Our research shows that dividends can predict roughly 90% of the movement of stock prices over the long-term."
    Hmm.... Academic studies (Campbell, Cochrane, Nelson, Lewellen, show that predictability is quite pure R^2 is less than 20% or/and exist only for some periods. What is the difference between your research model and scholar studies?

    Jul 24, 2015. 01:44 PM | Likes Like |Link to Comment
  • Market Timing Is Not Appropriate For Retired Investors [View article]
    Quote for the day:
    An investor looks to dividends rather than to price changes (as a speculator does) to justify the cost of his stock (John Burr Williams, 1938).
    Jul 24, 2015. 01:58 AM | 2 Likes Like |Link to Comment
  • Market Timing Is Not Appropriate For Retired Investors [View article]
    Stocks&BaseballCards /Ben,

    Roth IRA is perfect for DGI esp for high DGR USA stocks. Non-US DG stocks are more suitable for regular account (except few countries). Keep funds until you have ~50K$ invested than expand your own diversification. Watch & control cost of investing (brokerage vs fund fees). DRIP is kind of dollar cost averaging (value averaging is better).

    Good luck
    Jul 24, 2015. 01:48 AM | Likes Like |Link to Comment
  • Market Timing Is Not Appropriate For Retired Investors [View article]
    Sorry I didn't read your previous article and often I do not have time to read comments, but I was very surprise that some folks consider you as market timer.
    You prove that you are not.
    Jul 24, 2015. 01:21 AM | 3 Likes Like |Link to Comment
  • Are Dividend Growth Investors Nuts To Root For Lower Prices? [View article]
    The dividend growth investors /DGis/ should have longer time horizon than average investor (including Capital Gains investors) so many cases of low prices (correctly listed in this good article) are in favor of DGis but should be hated by average investor. Hence DGis probably like low prices more often than average investor and it creates impression (probably correct) of Strange love affair discussed by Adam.

    I think DGI can be viewed as set of approaches for different portfolio phases when attitude to stock price isn't the same:
    Most DGis like to buy cheap, to create higher div. stream for re-investing. It is nice to have low prices esp. if company business still strong and its perspectives are nice.
    There are 3 cases
    i) A DGis takes all (100%) income but don't touch principal. Price is irrelevant at least before RMD age.
    ii) A DGis takes part of income and re-invest the rest. Well it is "slow" accumulation phase.
    iii) A DGis takes all (100%) income sell part of principal. Higher prices are better.
    BTW, case ii) allows to have more concentrated DG portfolio (

    The Long Capital Gains investors want 2 events - low price when they buy and high price when they sell. The Short Capital Gains investors also want 2 events with opposite attitude to prices. Usually Total Return investors are the Long Capital Gains investors and have to play prices game Wall Street proposes for everybody (I guess with purpose to create service fee and with expect to find weaker hands than their own).
    IMO frequency of price decision is inversely proportional to investor success based on primitive math. Just ask yourself: How often investor call stock price right?
    Let assume very good one with 70% ability (and I sure Wall Street agrees to pay such person 1M$/month to act) and apply statistics 101 to this investor (with simplification of course).
    Multiplication Rule of Probability ( says that such investor rather loose than win in 2 trades (07 x 0.7 =0.49). Therefore B&H approach produces quite good results (esp. if investors know what to buy). B&H is possible with stocks which do NOT pay dividends and in this case all good results are purely accounting number (like depreciation) which is imaginary and cannot be used for purchase of food without violation of B&H axiom. DGI (close to B&H but not exactly it) is kind of implementation of B&H results which allows to transfer part of imaginations into currency which can buy food.

    Jul 23, 2015. 07:58 PM | 1 Like Like |Link to Comment
  • RoseNose's Adventure To Reacquire Shares Of 3M Company... And Buy Now! [View article]
    I don't remember the author but "Your own mistakes are the best teacher" is the smart idea.
    I compare my annual fees to broker (as % to invested capital) with now common 10bps many ETFs charge. This comparison isn't 100% correct because a fund fees are based on market value all time you own it and continues until you own the fund, while a broker charges only at action. But this comparison gives me idea about acceptable level of activity.
    Jul 23, 2015. 12:24 PM | 1 Like Like |Link to Comment