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Re: Where do stock dividends go before distributed by a fund

When a mutual fund recieves a dividend payment from a holding, where does the dividend go before it is distributed by the fund? Lets say, for (rough) approximate example, that ⋅ Apple generates a 47 cent dividend on November 10th ⋅ Apple stock was worth $108.83 each on November ...
by FinancialDave
Fri Dec 19, 2014 4:07 pm
 
Forum: Investing - Theory, News & General
Topic: Where do stock dividends go before distributed by a fund?
Replies: 5
Views: 544

Re: Please debunk this CNN Money article on dividend investi

http://www.fool.com/investing/general/2014/12/17/how-to-pick-the-best-dividend-stocks.aspx Wrote: "According data from Goldman Sachs, dividend stocks tend to outperform their nondividend-paying counterparts by a considerable margin over time. A $10,000 investment in nondividend stocks in 1972 ...
by FinancialDave
Fri Dec 19, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Please debunk this CNN Money article on dividend investing
Replies: 26
Views: 2201

Re: Beta vs Excess Returns

Valuethinker, That's what I meant - If the Beta is less than one, but the returns of the stock are greater than the SP500 (most frequently used reference), then not all of the excess returns could have been predicted by just using the Beta alone. In other words you can't generalize that lower Beta s...
by FinancialDave
Thu Dec 18, 2014 5:09 pm
 
Forum: Investing - Theory, News & General
Topic: Beta vs Excess Returns
Replies: 3
Views: 453

Re: White Coat Investor in Forbes

James,

Well done!

Big time baby!

:sharebeer
by FinancialDave
Thu Dec 18, 2014 12:36 pm
 
Forum: Investing - Theory, News & General
Topic: White Coat Investor in Forbes
Replies: 35
Views: 5441

Beta vs Excess Returns

I am trying to resolve in my mind the following quote from the Wiki on Beta: Eugene F. Fama and Kenneth R. French found that on average, a portfolio’s beta explains about 70% of its actual returns. For example, if a portfolio were up 10%, about 7% of the return can be explained by the advance of all...
by FinancialDave
Thu Dec 18, 2014 12:11 pm
 
Forum: Investing - Theory, News & General
Topic: Beta vs Excess Returns
Replies: 3
Views: 453

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

This is a very interesting analysis, thanks Financialdave for sharing. One challenge noted in the column is calculating an RMD rate prior to age 70. Using a flat 3.65% withdrawal rate from limited time period between ages 65-70 seems reasonable given the results shown here, but what of a longer per...
by FinancialDave
Sat Dec 13, 2014 1:15 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2185

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

Actually, the article's 65-years-old retiree with $250K is possibly receiving $15K (or more) in Social Security payments. In 1973, his income would have started at $27,500 using VPW+SS, instead of $25,000 using a 4% SWR+SS (and less using RMD+SS). It would have gone down a little during the high-in...
by FinancialDave
Fri Dec 12, 2014 8:04 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2185

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

This thread is largely arguing semantics. So in my opinion - So in my opinion, the thread has gone off the original topic - at least to some degree. The results from my study seem to indicate that variable withdraws at least in both the 1973 & 1975 case, provided MORE than a 50% improvement of ...
by FinancialDave
Fri Dec 12, 2014 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2185

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

A fluctuating income in retirement is just fine so long as it exceeds your needs by 50% or more. A portion of my own income is from a variable annuity adjusted monthly, hence never the same paycheck twice... You guys are just missing the whole concept of an emergency fund or a large cash balance in...
by FinancialDave
Fri Dec 12, 2014 4:10 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2185

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

FinancialDave, Thanks for the reference to the VPW speadsheet, but I must forward your thanks to the awesome Bogleheads team behind Simba's backtesting spreadsheet for providing the data on which you based the backtests of your article. Simba's backtesting spreadsheet actually contains a much riche...
by FinancialDave
Fri Dec 12, 2014 11:33 am
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2185

Re: Building a new Excel spreadsheet

In a tax advantaged account there is no need to track dividends and capital gains. Just update the number of shares. Don't create work you don't need. That's exactly right, I failed to notice both the accounts were tax-advantaged. There is no need to track the cost basis, unless you also want to ad...
by FinancialDave
Thu Dec 11, 2014 11:33 pm
 
Forum: Investing - Theory, News & General
Topic: Building a new Excel spreadsheet
Replies: 33
Views: 2980

Re: any studies of real-world retirement outcomes?

Actually it would be more interesting to know how Bogleheads who have retired now are doing. Did the Bogle Path get you to your goals? Do you have any word of advice or lessons learnt looking back? Much appreciated! I only wish I had found Bogleheads more than 2 years before I retired -- I could pr...
by FinancialDave
Thu Dec 11, 2014 11:26 pm
 
Forum: Investing - Theory, News & General
Topic: any studies of real-world retirement outcomes?
Replies: 20
Views: 1864

Re: any studies of real-world retirement outcomes?

I've asked this before, does anyone enjoy retirement or life or is it a constant "we are doomed" mentality so let's not enjoy life at all. Just asking? LOL I think I'll take a break to after Christmas, I'm scared that if I buy a Christmas gift for the grandkids I'll stress about not havin...
by FinancialDave
Thu Dec 11, 2014 6:51 pm
 
Forum: Investing - Theory, News & General
Topic: any studies of real-world retirement outcomes?
Replies: 20
Views: 1864

Re: Building a new Excel spreadsheet

kmok, I think OP means dividends and cap gains distributions, which I think you would basically treat the same way if they are both re-invested. Dividends and capital gains distributions increase the total share count and add to the cost basis of the original investment - so they don't come in at ze...
by FinancialDave
Thu Dec 11, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Building a new Excel spreadsheet
Replies: 33
Views: 2980

Comparing Results from VPW, RMD, & 4% Rule Withdrawals

First I want to say thanks to Longinvest and others who have done much work on the VPW spreadsheet. I realize I can't do it justice in a short article such as this one just released: http://seekingalpha.com/article/2747405-safe-withdrawal-rates-part-2-variable-withdrawals My attempt was to compare a...
by FinancialDave
Thu Dec 11, 2014 3:19 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2185

Re: BOGLEHEAD CONTEST -- Dec 9th

I see 1st place tomorrow, then it's over!

:happy
by FinancialDave
Tue Dec 09, 2014 6:33 pm
 
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- November 2014
Replies: 14
Views: 2093

Re: BOGLEHEAD CONTEST -- November 2014

Wow, I'm into the top ten --- looking for sideways from now until the end of the year!

:sharebeer
by FinancialDave
Tue Dec 09, 2014 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- November 2014
Replies: 14
Views: 2093

Re: [Shiller's] data set and the Facts of the Matter

If I am not mistaken, does not everybody calculate the total annualized return for the year by reinvesting the dividends and comparing the starting value on Jan 1 to the ending value on Dec 31? They do not average any price data. fd Some take starting value on July 1 and ending value on June 30th. ...
by FinancialDave
Thu Dec 04, 2014 5:42 pm
 
Forum: Investing - Theory, News & General
Topic: [Shiller's] data set and the Facts of the Matter
Replies: 14
Views: 1650

Re: [Shiller's] data set and the Facts of the Matter

It's definitely more correct than just using the value for one day and throwing out the rest of the days. Think about this: Suppose prices are 100 all through the month and jump 10% on the last day of the month. Then fall back to 100 the next day. If you sample only on the last day of the month you...
by FinancialDave
Thu Dec 04, 2014 3:17 pm
 
Forum: Investing - Theory, News & General
Topic: [Shiller's] data set and the Facts of the Matter
Replies: 14
Views: 1650

Re: [Shiller's] data set and the Facts of the Matter

Thanks for all your thoughtful comments so far -- I have not seen anything on this more technical issue that I brought up. but the problem seems to stem from the standard way we apply Portfolio returns using discrete simple return data on an annualized basis vs the way Schiller "cut" up t...
by FinancialDave
Thu Dec 04, 2014 12:38 am
 
Forum: Investing - Theory, News & General
Topic: [Shiller's] data set and the Facts of the Matter
Replies: 14
Views: 1650

Re: If implementing simple ETF strategy how do I take income

In fact, if a corporation pays a dividend, the corporation is invading its own principal ; after the corporation has paid the dividend, it has less cash for its own operations, and the share price will decline to reflect that change. High-dividend stocks show less growth in share price than low-div...
by FinancialDave
Wed Dec 03, 2014 12:43 am
 
Forum: Investing - Theory, News & General
Topic: If implementing simple ETF strategy how do I take income?
Replies: 7
Views: 852

Re: What % of your fixed-income is TIPs?

When breaking down your portfolio, what portion (or %) of your fixed-income/bonds are TIPs? I am just stating what I do. I am a sloppy investor. This is not a recommendation. 40% of my fixed income is in individual TIPS (not a TIPS fund). Can a case be made for a majority or all of your fixed-incom...
by FinancialDave
Wed Dec 03, 2014 12:29 am
 
Forum: Investing - Theory, News & General
Topic: What % of your fixed-income is TIPs?
Replies: 71
Views: 3500

Re: [Shiller's] data set and the Facts of the Matter

Thanks for all your thoughtful comments so far -- I have not seen anything on this more technical issue that I brought up. but the problem seems to stem from the standard way we apply Portfolio returns using discrete simple return data on an annualized basis vs the way Schiller "cut" up th...
by FinancialDave
Tue Dec 02, 2014 2:28 pm
 
Forum: Investing - Theory, News & General
Topic: [Shiller's] data set and the Facts of the Matter
Replies: 14
Views: 1650

[Shiller's] data set and the Facts of the Matter

I have to admit I have "played" around with the Shiller data set for a couple years now, but I guess I did not realize the implications of how it is constructed and I guess I am just looking for some opinions from someone with a degree in finance as to whether this data is really being app...
by FinancialDave
Tue Dec 02, 2014 12:54 am
 
Forum: Investing - Theory, News & General
Topic: [Shiller's] data set and the Facts of the Matter
Replies: 14
Views: 1650

Re: Safe Withdrawal Rates - Is the 4% rule still good?

Is there really anyone who thinks when they actually get to retirement they can spend a level 4% and nothing bad can happen? IOW there seems some element of knocking over a straw man in criticizing 'safe withdrawal rate' when it comes to all but the most naive investors. I would suggest that the te...
by FinancialDave
Sun Nov 30, 2014 6:20 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

OP. Kinda depends on where you are and what type of stuff you have for retirement and during retirement, Doesn't it? :? When we were 58/61 yo, I looked into this. We were screwed in 2008. I applied the James T. Kirk Solution ( only to be used in situations where failure is certain. ) Now at 64/67, ...
by FinancialDave
Sun Nov 30, 2014 3:55 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

Is there really anyone who thinks when they actually get to retirement they can spend a level 4% and nothing bad can happen? IOW there seems some element of knocking over a straw man in criticizing 'safe withdrawal rate' when it comes to all but the most naive investors. I would suggest that the te...
by FinancialDave
Sun Nov 30, 2014 3:39 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

To the OP: I believe the 4% SWR rule is dead for those planning for a 40-year retirement. I am 49 and planning on 2.5% SWR. The article showed clearly that the 4% rule is not dead for a 40 year retirement. In fact all the charts I showed were essentially 40 year charts. It was just that all the dat...
by FinancialDave
Sun Nov 30, 2014 3:31 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

Yes, and in most scenarios even the real value of the portfolio, let alone the nominal value, will be greater 27 years later than the starting amount. If one has had the bad luck to be on one of the few trajectories where the portfolio is headed to zero, hopefully one will have done some hard think...
by FinancialDave
Wed Nov 26, 2014 11:42 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

I recommend that you run through a bunch of withdrawal scenarios using the Monte Carlo simulator on Vanguard's web site.....aim for 95% success over 30 years.....of course, you have to find the simulator first......it's buried about 4-5 layers deep. To what end may I ask? To compare random numbers ...
by FinancialDave
Tue Nov 25, 2014 11:42 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

I did read the Article ! - Nicely written ! FD - Have you looked at VPW ? - A safer Withdrawal Rate, that probably lets you spend more money. Fixed Percent WRs are soooo yesterday. :happy I took some time studying the VPW calculations -- I found that I could withdraw even 10% from my portfolio ever...
by FinancialDave
Tue Nov 25, 2014 6:38 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Re: Safe Withdrawal Rates - Is the 4% rule still good?

To all those who didn't really take the time to read the article I will post a quote here from the article: Now some might comment, "Past performance from these historical results is no guarantee of the future." This is very much a true fact that all investors should realize. However, desi...
by FinancialDave
Tue Nov 25, 2014 3:06 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Safe Withdrawal Rates - Is the 4% rule still good?

I have done some work on Safe Withdrawal Rates, that I think says the 4% rule is still very much a good starting point for retirement planning: http://seekingalpha.com/article/2709635-safe-withdrawal-rates-part-1-retirements-4-percent-rule I have given the Boglehead excellent Wiki entry on Safe With...
by FinancialDave
Tue Nov 25, 2014 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 84
Views: 7961

Wellington Closed?

I have seen some comments on two different blog sites in the last week about Wellington being closed to new investors. As far as I know this isn't true, is it?

Are they closed maybe to some brokers or institutions but still open to owners of their own Vanguard account?

fd
by FinancialDave
Tue Nov 25, 2014 12:06 am
 
Forum: Investing - Theory, News & General
Topic: Wellington Closed?
Replies: 2
Views: 968

Jim Cramer recommends Vanguard - Almost!

Once in awhile you have to give credit where credit is do just like Jim Cramer did on tonight's show. A lady calls in wanting to know which of all the many index funds she should invest in because the "list is so long." After rambling a bit about the ETF SPX, he winds up the call with - &q...
by FinancialDave
Wed Nov 19, 2014 10:01 pm
 
Forum: Investing - Theory, News & General
Topic: Jim Cramer recommends Vanguard - Almost!
Replies: 1
Views: 1194

Re: "Schwab Intelligent Portfolios"

One of the things I'm not looking forward to in retirement is deciding how to draw down my annual needs from my portfolio at the beginning of each year. I know current thinking is draw from taxable, then tax advantaged, then Ross. I've been told by more than one CPA and tax attorney (non involved i...
by FinancialDave
Wed Nov 19, 2014 5:58 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 6792

Re: "Schwab Intelligent Portfolios"

There are different types of fundamental weightings -- one which I really like is the equally weighted S&P 500 RSP -- this is very easy to understand and is not suspect (at least in my mind) to someone's interpretation of what is the best fundamental parameter (such as P/E, cash flow, etc.) In t...
by FinancialDave
Tue Nov 18, 2014 3:44 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 6792

Re: "Schwab Intelligent Portfolios"

Riptide, While my purpose is not to give you investing advice, as you need to do what is right for you, what it appears at least from this viewpoint is someone looking for the "next best thing." Some may call it reaching for returns or seeking more alpha. IMHO it is the best way to lower y...
by FinancialDave
Tue Nov 18, 2014 2:27 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 6792

Re: Value Investing or Dividend Investing - Which Is It?

Ok, let me be more clear for those that don't have access to SA or what to register. This is a 100% equity portfolio made up of the following 3 Vanguard Funds, which were selected for a value tilt, similar to what one might find in a portfolio made up of all dividend stocks, but without having to bu...
by FinancialDave
Sat Nov 15, 2014 12:17 pm
 
Forum: Investing - Theory, News & General
Topic: Value Investing or Dividend Investing - Which Is It?
Replies: 4
Views: 985

Value Investing or Dividend Investing - Which Is It?

Is it one in the same, or are you stuck on just one side of the fence?

http://seekingalpha.com/article/2682355-setting-up-a-portfolio-that-millennials-can-relate-to

The short story is I pick a Value-tilted Vanguard 3-Fund Portfolio as a play on Dividend Investing.



fd
by FinancialDave
Sat Nov 15, 2014 1:21 am
 
Forum: Investing - Theory, News & General
Topic: Value Investing or Dividend Investing - Which Is It?
Replies: 4
Views: 985

Re: Is Boglehead investing becoming the conventional wisdom?

Up until a week ago, I had never heard of Boglehead investing. In my little part of the world practically NO ONE invest on their own like you all and like I am trying to learn from you. I only know of two others that were DYI investors. Most everyone paid professionals (??) Even talking about dyi i...
by FinancialDave
Fri Nov 14, 2014 12:05 am
 
Forum: Investing - Theory, News & General
Topic: Is Boglehead investing becoming the conventional wisdom?
Replies: 23
Views: 3111

Re: Is Boglehead investing becoming the conventional wisdom?

I guess the question could be: What would happen if everyone indexed? Would that not mean that everyone would get the market return? If that were to happen, an ambitious individual would have the bright idea that he could do better simply dropping the worst stock and doubling up on the best stock i...
by FinancialDave
Fri Nov 14, 2014 12:03 am
 
Forum: Investing - Theory, News & General
Topic: Is Boglehead investing becoming the conventional wisdom?
Replies: 23
Views: 3111

Re: Tax-loss harvesting

Abraham: Tax-loss harvesting can be simple or complicated. I prefer "simple." This is all you need to do (2 steps): 1. Before year-end, sell any taxable fund with a loss and put the proceeds in a safe liquid investment. 2. After 30 days, repurchase the fund (or another fund if you prefer)...
by FinancialDave
Mon Nov 03, 2014 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 6792

Re: If I am a LT investor, should I forgo a bond allocation?

I will say that an 85% stock/15% long-term bond portfolio had a slightly higher return than a 100% stock portfolio (9.93% vs. 9.84%) from 1972-2012 with lower volatility. Most of the people are totally missing the reason. A small bond percentage will result in a higher (not less) risk adjusted retu...
by FinancialDave
Thu Oct 30, 2014 6:35 pm
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2229

Re: REIT Index Fund in a SEP IRA vs Roth IRA

Except one is pre tax, and one is post tax. They are not the same thing, and, depending on how gains from REIT's are taxed, one might be MORE advantageous than the other, are they not? Is it not recommended that REIT's NOT be held in taxable accounts? Johnny, In re-reading all your posts, I think t...
by FinancialDave
Thu Oct 30, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: REIT Index Fund in a SEP IRA vs Roth IRA
Replies: 9
Views: 611

Re: If I am a LT investor, should I forgo a bond allocation?

I would like to re-stress a couple of important points that have been said by others, and I agree with wholeheartedly: 1. SS is a bond investment that most people accumulate over time. This said, as a young investor, there is good reason to be 100% stocks in your investment asset allocation if this ...
by FinancialDave
Thu Oct 30, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2229

Re: 401k rollover

Well you did see the part where the OP expressed a desire to do multiple rollovers from the 401k to do DCA so if the funds there were in stocks there and used to purchase more stocks then how would DCA happen? Somehow, there seems to be a disconnect on what people thinks goes on during a 401(k) rol...
by FinancialDave
Thu Oct 30, 2014 12:44 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k rollover
Replies: 21
Views: 1355

Re: If I am a LT investor, should I forgo a bond allocation?

Yet another question is how certain you are of your horizon. Life or deep economic woes might force a short horizon on you, and then what. This can be either health or extended unemployment (the latter well correlated with crashes), or even a golden opportunity that you don't have any liquid money ...
by FinancialDave
Thu Oct 30, 2014 12:10 am
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2229

Re: REIT Index Fund in a SEP IRA vs Roth IRA

I can't see how putting a REIT in a tax deferred account (IRA) or a tax free account (ROTH) is going to make much difference. In one case there are no taxes and the other case the taxes are at your ordinary income tax rate - neither account is affected by the type of investments. fd So that was my ...
by FinancialDave
Wed Oct 29, 2014 11:55 pm
 
Forum: Investing - Theory, News & General
Topic: REIT Index Fund in a SEP IRA vs Roth IRA
Replies: 9
Views: 611
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