Search found 1301 matches

by FinancialDave
Thu Jul 16, 2015 1:22 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

Regarding "price" changes and ex-dividend date: Does this help or confuse the issue? After the close of business on the day before the ex-dividend date and before the market opens on the ex-dividend date, all open good-until-canceled limit, stop, and stop limit orders are automatically re...
by FinancialDave
Wed Jul 15, 2015 11:50 am
Forum: Investing - Theory, News & General
Topic: Dividend stock investing or Total Return?
Replies: 41
Views: 2688

Re: Dividend stock investing or Total Return?

The argument mostly put forward is that you shouldn’t go for income per se at all, but rather you should go for total return from broad market cap index funds and sell down your holdings to generate income as required. Nothing new to add here, but to remind readers that dividends come along almost ...
by FinancialDave
Wed Jul 15, 2015 11:48 am
Forum: Investing - Theory, News & General
Topic: Dividend stock investing or Total Return?
Replies: 41
Views: 2688

Re: Dividend stock investing or Total Return?

The argument mostly put forward is that you shouldn’t go for income per se at all, but rather you should go for total return from broad market cap index funds and sell down your holdings to generate income as required. Nothing new to add here, but to remind readers that dividends come along almost ...
by FinancialDave
Wed Jul 15, 2015 11:37 am
Forum: Investing - Theory, News & General
Topic: Dividend stock investing or Total Return?
Replies: 41
Views: 2688

Re: Dividend stock investing or Total Return?

I use 100% equities in this strategy, but my perpetual income bucket is less than half of my retirement savings. The rest is parked in total return index growth and value. I'm confused by this. If you have 100% equities, where do the buckets come in? Cash you're spending doesn't know where it comes...
by FinancialDave
Tue Jul 14, 2015 1:45 pm
Forum: Investing - Theory, News & General
Topic: Dividend stock investing or Total Return?
Replies: 41
Views: 2688

Re: Dividend stock investing or Total Return?

There are a couple issues that I have written about on other sites, but basically it boils down to two key issues: 1. In the accumulation stage young investors should embrace the volatility that total return investing in equities can bring. You can also "tilt" your index funds toward value...
by FinancialDave
Mon Jul 13, 2015 1:44 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

Have the exchanges always implemented this price drop on the ex-dividend date? The exchanges don't implement the drop at all; it is caused by the market. However, it is reported in the daily change to reflect what investors actually earn. Suppose that a stock announces that it will pay a $1 dividen...
by FinancialDave
Sun Jul 12, 2015 12:59 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

It's a good and well-stated question and analysis. The payment of dividends does not increase the total wealth of the shareholder. Dividends paid are one of the two elements in total return . The other is share price changes. PJW I think in most cases I will agree with the above two statements - ma...
by FinancialDave
Sun Jul 12, 2015 12:43 am
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

The discussion seems to have wandered quite far from the original topic. I find it extremely interesting that limit orders get adjusted exdiv. I've never heard of that before and it actually has substantial implications for long term stop-loss orders. Note that under no-arbitrage conditions, the pr...
by FinancialDave
Sun Jul 12, 2015 12:21 am
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

The price is what the market participants, among themselves, say it is. I don't think any market participants adjust my open limit order down by a dollar for a $1 dividend and I suspect that maybe the same system that adjusts my limit order adjusts most other limit orders as well. Dave If you're pl...
by FinancialDave
Sat Jul 11, 2015 6:13 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

The price is what the market participants, among themselves, say it is.


I don't think any market participants adjust my open limit order down by a dollar for a $1 dividend and I suspect that maybe the same system that adjusts my limit order adjusts most other limit orders as well.

Dave
by FinancialDave
Sat Jul 11, 2015 6:09 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

I understand that there is a discussion about the mechanics of how the market prices the stock dependent on and independent of the payment of the dividend.


And one of the points of trying to determine the above is to figure out if it was ever done differently.


Dave
by FinancialDave
Sat Jul 11, 2015 6:03 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

PJW, Of your 3 explanations #2 seems to have some promise (the price is adjusted by some model) - the question is who is running the model? I watch level 2 realtime quotes quite often, but just like my brokerage limit order on the stock gets automatically lowered by $1 on the ex-date (for a stock th...
by FinancialDave
Sat Jul 11, 2015 4:02 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

Pjw, Ok, I am still not sure I understand exactly what you are saying. Traders exist in the plural sense such as there are many of them and my understanding is they can only trade during extended or normal market hours. My understanding is this price adjustment occurs overnight in the off hours and ...
by FinancialDave
Sat Jul 11, 2015 3:14 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Re: Do Dividends Actually Add To The Total Return of a Stock?

It's a good and well-stated question and analysis. The payment of dividends does not increase the total wealth of the shareholder. Dividends paid are one of the two elements in total return . The other is share price changes. ... Have the exchanges always implemented this price drop on the ex-divid...
by FinancialDave
Sat Jul 11, 2015 1:04 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4407

Do Dividends Actually Add To The Total Return of a Stock?

This is not a question as to whether dividends are good or bad, but a technical question as to whether the dividend payment itself adds anything to the total return equation given its resultant price action on the ex-dividend date. I recently wrote an article breaking out the two components of the T...
by FinancialDave
Mon Jul 06, 2015 1:59 pm
Forum: Investing - Theory, News & General
Topic: Spending from separate retirement buckets
Replies: 46
Views: 4270

Re: Spending from separate retirement buckets

In my own retirement I have basically two buckets that run off two separate goals, for what might be considered two separate spending needs/wants. Prior to spending from the buckets below is some pension money which covers maybe 80% of the needs bucket. The first and primary bucket is a bucket of di...
by FinancialDave
Fri May 22, 2015 11:05 am
Forum: Investing - Theory, News & General
Topic: Paying zero fees on a hand picked stock portfolio
Replies: 66
Views: 4829

Re: Paying zero fees on a hand picked stock portfolio

I do realize I'm on the bogleheads board and this isn't part of the philosophy around here. I am hoping you guys poke holes in this potential strategy. I know you will! Also would be interested to hear if any of you folks employee this strategy and can speak from experience? This is the quote writt...
by FinancialDave
Thu May 21, 2015 10:47 pm
Forum: Investing - Theory, News & General
Topic: What if the US stock market was only 25% of the world by market cap?
Replies: 37
Views: 2796

Re: What if the US stock market was only 25% of the world by market cap?

In general I may apply a small International (10%) from time to time, but I don't rely on it to put beans on the table. As Bogle suggests there are plenty of US multi-nationals that are already investing abroad and in a number of cases they do some currency hedging on their own. My biggest gripe is ...
by FinancialDave
Thu May 21, 2015 10:32 pm
Forum: Investing - Theory, News & General
Topic: Paying zero fees on a hand picked stock portfolio
Replies: 66
Views: 4829

Re: Paying zero fees on a hand picked stock portfolio

For most of us, the debate about whether or not the market is "efficient" is not productive I would contend, as some others do that the market is absolutely NOT efficient in the short term - anyone only has to look at their portfolio a few days in a row to know this, and as a matter of fa...
by FinancialDave
Tue May 19, 2015 11:52 am
Forum: Investing - Theory, News & General
Topic: Paying zero fees on a hand picked stock portfolio
Replies: 66
Views: 4829

Re: Paying zero fees on a hand picked stock portfolio

What the people claiming to be disciples of Benjamin Graham don't mention is what Benjamin Graham said in 1976. In selecting the common stock portfolio, do you advise careful study of and selectivity among different issues? In general, no. I am no longer an advocate of elaborate techniques of secur...
by FinancialDave
Mon May 18, 2015 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard's Personal Advisor Recommendations
Replies: 22
Views: 5152

Re: Vanguard's Personal Advisor Recommendations

But also why is it necessary to reduce your returns by .3% to do so as you can profit from that research for free by just buying the TDF yourself - if it seems too risky decrease the date, if you want more aggressive, increase the date. Because there are many people like my elderly relatives who wo...
by FinancialDave
Mon May 18, 2015 4:58 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard's Personal Advisor Recommendations
Replies: 22
Views: 5152

Re: Vanguard's Personal Advisor Recommendations

My advisor recommended a simple 4 fund portfolio with a 90/10 AA based on my age and risk tolerance. My own personal experience suggests that at least their first pass at this 4-fund allocation will be something that pretty much looks like their target date fund for your age group. Does anyone else...
by FinancialDave
Mon May 18, 2015 4:47 pm
Forum: Investing - Theory, News & General
Topic: Paying zero fees on a hand picked stock portfolio
Replies: 66
Views: 4829

Re: Paying zero fees on a hand picked stock portfolio

What you really need to do is study some of the written material published prior to 2008 by some of those dividend "experts" -- what you may see as I did is they were recommending a lot of banking stocks, which have since needed to do a reverse split just to stay out of the penny stock cat...
by FinancialDave
Mon Apr 20, 2015 4:49 pm
Forum: Investing - Theory, News & General
Topic: Pay taxes for parent to convert to Roth?
Replies: 4
Views: 647

Re: Pay taxes for parent to convert to Roth?

I think the best plan is if family members do not get involved (unless they have to) in other's financial matters, as the best intentions can find a way to end badly and this can strain family relations. Best to leave it alone IMHO. Just hope that your parents live a very long life and spend every n...
by FinancialDave
Thu Apr 09, 2015 11:39 am
Forum: Investing - Theory, News & General
Topic: Why is VDIGX Dividend Payout Always Small in 1st quarter?
Replies: 4
Views: 934

Re: Why is VDIGX Dividend Payout Always Small in 1st quarter

The March distribution is not a real dividend, it is an "Oops, we got more income in 2014 than we previously had thought, so we are dumping out that extra income now." Here's an article about it: https://personal.vanguard.com/us/insights/article/supplemental-fund-distributions-032015 This...
by FinancialDave
Wed Apr 08, 2015 5:41 pm
Forum: Investing - Theory, News & General
Topic: Why is VDIGX Dividend Payout Always Small in 1st quarter?
Replies: 4
Views: 934

Why is VDIGX Dividend Payout Always Small in 1st quarter?

When looking at the VDIGX dividend only portion of the payout each March for the last couple years I notice it is about 1/10th the size of the dividend payout during the other 3 quarters. Does anyone know the technical reason for this? Is it just Vanguard being overly conservative for the total year...
by FinancialDave
Mon Mar 30, 2015 4:49 pm
Forum: Personal Finance (Not Investing)
Topic: RMDs for 25-year-old - take out enough to fund annual Roth?
Replies: 38
Views: 2355

Re: RMDs for 25-year-old - take out enough to fund annual Ro

What is the definition of "full-time"? 1. The student must be enrolled for the number of hours or courses the school considers full-time, during "some" part of 5 calendar months -- the months do not need to be consecutive. 2. The school can be elementary school, high school, uni...
by FinancialDave
Mon Mar 30, 2015 4:25 pm
Forum: Personal Finance (Not Investing)
Topic: RMDs for 25-year-old - take out enough to fund annual Roth?
Replies: 38
Views: 2355

Re: RMDs for 25-year-old - take out enough to fund annual Ro

It might make sense to use the RMD to contribute to the Roth and then make an additional contribution to a traditional IRA without taking a distribution. Especially if the income is near $25k it can allow one to capture a higher Saver's Credit. And yes, grad student TA's can do this. I did it in th...
by FinancialDave
Mon Mar 30, 2015 12:32 am
Forum: Personal Finance (Not Investing)
Topic: RMDs for 25-year-old - take out enough to fund annual Roth?
Replies: 38
Views: 2355

Re: RMDs for 25-year-old - take out enough to fund annual Ro

Just to throw another twist on this story, I have no problem with funding the Roth, but not necessarily if "M" is taking out student loans accruing interest at 7-9% to fund grad school. In the case of student loans, I may just use the minimum RMD to pay down the loan and "book" a...
by FinancialDave
Fri Mar 27, 2015 11:59 pm
Forum: Investing - Theory, News & General
Topic: "Filling Your 401k with Company Stock"
Replies: 20
Views: 1791

Re: "Filling Your 401k with Company Stock"

I was just saying IMHO there is no difference between Enron and ANY other company, at the time. Hindsight is always 20/20, but just about everyone, even those inside Enron were totally fooled until it was too late. My philosophy from the first day I ever invested in a stock has always been that any ...
by FinancialDave
Fri Mar 27, 2015 11:09 pm
Forum: Investing - Theory, News & General
Topic: "Filling Your 401k with Company Stock"
Replies: 20
Views: 1791

Re: "Filling Your 401k with Company Stock"

victorb wrote:I think you should be very careful on how much goes into company stock.
However, there is a big difference between Enron and a company like 3M.


What about Kodak, or many other companies that have been in the DOW over the last hundred years and are now gone?

fd
by FinancialDave
Fri Mar 27, 2015 10:58 pm
Forum: Personal Finance (Not Investing)
Topic: Change W-4 after paying off mortgage
Replies: 11
Views: 989

Re: Change W-4 after paying off mortgage

Or maybe an additional $1100 in taxes owed is not such a big deal You should try to get the taxes owed down to less than $1000 to avoid possible penalties, but if you get to 90% of your tax or 100% of last years tax, those are a couple of "safe harbor" targets that will avoid a penalty. fd
by FinancialDave
Fri Mar 27, 2015 10:52 pm
Forum: Personal Finance (Not Investing)
Topic: Change W-4 after paying off mortgage
Replies: 11
Views: 989

Re: Change W-4 after paying off mortgage

One other very non-technical way that I always used was to just use what I call the iteration method. Make a change to your withholding, look at your next paycheck stub and see how much it changed the withholding. Do some math on how much withholding you need, vs how many weeks have already gone by ...
by FinancialDave
Thu Mar 26, 2015 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 4658

Re: Variable spending strategies paper by Pfau

Hi Wade, thanks for coming back to me. I appreciate your patience and eagerness to discuss. I looked at PMT-based and G-K methods quite in depth, using historical backtesting under various conditions, and looking at many individual cycles. And it is very clear that those methods can go through up a...
by FinancialDave
Thu Mar 26, 2015 10:23 am
Forum: Personal Finance (Not Investing)
Topic: Better place to keep money than savings account?
Replies: 20
Views: 3606

Re: Better place to keep money than savings account?

Thanks for the correction. i-Bond rates can go to zero and stay there but the principle stays intact. Whereas TIPS can loose interest and principle during deflation. Just to be even more clear - TIPS can lose money just like any other bonds when interest rates move -- fyi the Vanguard Intermediate ...
by FinancialDave
Wed Mar 25, 2015 1:47 pm
Forum: Personal Finance (Not Investing)
Topic: Better place to keep money than savings account?
Replies: 20
Views: 3606

Re: Better place to keep money than savings account?

I'm not really comfortable losing any of it. This is the key to your answer -- there have been a number of suggestions for which your capital is protected, or 99% protected (you may lose a miniscule amount if you cash out an I-bond early.) I would (and do) spread the money around a bit, in the diff...
by FinancialDave
Tue Mar 24, 2015 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Better place to keep money than savings account?
Replies: 20
Views: 3606

Re: Better place to keep money than savings account?

I'm not really comfortable losing any of it. This is the key to your answer -- there have been a number of suggestions for which your capital is protected, or 99% protected (you may lose a miniscule amount if you cash out an I-bond early.) I would (and do) spread the money around a bit, in the diff...
by FinancialDave
Tue Mar 24, 2015 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 4658

Re: Variable spending strategies paper by Pfau

So let me re-assert my previous claim: the most spendable money for my hypothetical couple would be from constant dollar withdrawals. Second, on what amounts should the couple base their retirement plans? Certainly, not on the potentially higher amounts available through variable withdrawals, becau...
by FinancialDave
Mon Mar 23, 2015 11:50 pm
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 4658

Re: Variable spending strategies paper by Pfau

When all is said and done, my hypothetical couple are probably best off with the old fashioned, constant dollar, "safe withdrawal" strategy approach. It actually gives them the most spendable money since it gives them an amount on which to do longer term planning ("yes, we can afford...
by FinancialDave
Mon Mar 23, 2015 12:41 am
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 4658

Re: Variable spending strategies paper by Pfau

Sigh. I had hoped for a lot better. What this article and others neglect is to provide any measure of the year to year volatility in spending. In a bad year, they need all of their investment returns to cover their medical care expenses, taxes, insurance, basic food expenses and utilities. What cou...
by FinancialDave
Sun Mar 22, 2015 7:11 pm
Forum: Personal Finance (Not Investing)
Topic: Variable spending strategies paper by Pfau
Replies: 37
Views: 4658

Re: Variable spending strategies paper by Pfau

Beliavsky wrote: Looking at the tables in the paper, no spending strategy stands out as the best to me. Maybe that is the point -- there are trade-offs. If you think about it, you will realize every investing/withdrawing decision involves trade-offs and compromise. You cannot know what optimal will...
by FinancialDave
Sun Mar 15, 2015 2:26 am
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 25974

Re: Bernstein: 2% investment returns over next 20 years

Is that the total return on investment real estate ie price return plus 'cap rate' (cash rent minus cash expenses), or the just price return of owned homes (excluding non cash imputed rent and cash expenses)? I believe it was the price return and it is really the only portion of real estate ownersh...
by FinancialDave
Sat Mar 14, 2015 3:27 pm
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 25974

Re: Bernstein: 2% investment returns over next 20 years

I could say 'if expected returns of stocks are low, I'd just pull my money out and put it in real estate'. I do have some of my money in rental RE, but it's quite apparent that expected returns in real estate are also depressed. That's a bit problematic at best since Berstein points out that the re...
by FinancialDave
Sat Mar 14, 2015 2:28 pm
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 25974

Re: Bernstein: 2% investment returns over next 20 years

I love Dr. Bernstein, but his ability to predict is no better then anyone else's crystal ball. What staythecourse said! But 4% real on stocks does not seem to be any more depressing (or not depressing depending on your viewpoint) than many other recent times. That would equal 7-8% nominal for stock...
by FinancialDave
Sat Feb 28, 2015 1:09 pm
Forum: Investing - Theory, News & General
Topic: Buy and Hold Forever Stocks
Replies: 101
Views: 9964

Re: Buy and Hold Forever Stocks

Buy & Hold forever is really a mistake that if you do it long enough will end up costing you money. Maybe if you have enough diversification (and enough money) you can survive relatively unscathed, but it is no reason to through money away. As long as you aren't of the crowd that believes you wo...
by FinancialDave
Mon Feb 16, 2015 7:51 pm
Forum: Investing - Theory, News & General
Topic: Average amount saved for retirement by age
Replies: 133
Views: 29276

Re: Average amount saved for retirement by age

I've read a number of articles about the average amount an individual has saved for retirement by age and the numbers seem ridiculously low. This doesn't include social security, pensions, or ones primary residence. The following is in the ball park of the majority of my findings... < 35: $6,306 35...
by FinancialDave
Fri Feb 13, 2015 7:33 pm
Forum: Investing - Theory, News & General
Topic: Social Security as a bond?
Replies: 47
Views: 3687

Re: Social Security as a bond?

Isn't SS referred to as a bond in Commom Sense, along with pensions, or am I remembering it incorrectly? You are exactly correct, on page 88 (2010 version Common Sense on Mutual Funds ) John Bogle calls pensions & SS "bondlike" investments. IMO if they are bondlike then you should tre...
by FinancialDave
Sat Feb 07, 2015 11:39 pm
Forum: Investing - Theory, News & General
Topic: Dave Ramsey says you shouldn't own bonds?
Replies: 64
Views: 10063

Re: Dave Ramsey says you shouldn't own bonds?

So I went to his website. On Dave's website, it says that HE does not own bonds. This is probably the greater truth here. I don't know why everyone get's so worked up over a talk radio program. It's not like he is an investment advisor. My experience is that most people don't just get their investm...
by FinancialDave
Sat Feb 07, 2015 4:58 pm
Forum: Investing - Theory, News & General
Topic: Dave Ramsey says you shouldn't own bonds?
Replies: 64
Views: 10063

Re: Dave Ramsey says you shouldn't own bonds?

His rationale was that bond funds are as risky as stock funds... Such a ludicrous proposition would be enough to put all of his future comments into the "noise" bucket for me and just tune him out. (We need ever-increasingly large buckets to contain the noise. Meaningful advice seems to f...
by FinancialDave
Fri Feb 06, 2015 7:29 pm
Forum: Investing - Theory, News & General
Topic: 401k/IRA: Roth, Traditional, or Both
Replies: 10
Views: 1050

Re: 401k/IRA: Roth, Traditional, or Both

Irrespective of any reasons for having a Roth or not having a Roth, they boil down (at least mathematically) to comparing your tax rates now to later or making some assumption to that affect. This is NOT knowable, so my suggestion is to always have some of both, and I'm pretty sure at some point in ...

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