Search found 8 matches
- Thu Sep 03, 2009 1:02 am
- Forum: Investing - Theory, News & General
- Topic: What is your preferred withdrawal formula?
- Replies: 25
- Views: 5494
I divert dividends and interest to a VG MM fund. I figure I'm paying tax on them anyway, so I might as well spend it first. Then a fixed monthly "salary" EFT goes from MM to checking at our bank. The portfolio is a diversified indexed-based 50-50 mix. The overall yield is right around 3%, which is (hopefully) well into the safe withdrawl zone, and is about equal to our budget (which includes a decent discretionary chunk). I guess it's kind of coincidence that our yield and our comfortable SWR are essentially the same, but I like not having to pull principal. Right now the MM balance stays pretty constant with a balanced inflow from the portfolio, and monthly outflow to checking. If the MM buffer gets too large, I reinvest some. If...
- Tue Aug 25, 2009 11:53 pm
- Forum: Investing - Theory, News & General
- Topic: The Decumulation Phase
- Replies: 138
- Views: 70892
Re: The Decumulation Phase
On the comment about the risk of the insurance company going under: Depending how deep you are in the red zone, the probability of running out of money holding an investment portfolio generally -at reasonable withdrawal rates- is 40% and higher. (about 45% at 5% initial withdrawal rate, 80% at 6% even with a balanced portfolio) The risk of an insurance company going under is significantly less than 50%. Furthermore, there is a guaranteed amount ($2,000/month in Canada) which is continued to be paid even if the insurer goes under. So, if the person needs $3000/month to meet his basic shortfall, I buy it from two different insurers. $2000/month is actually a pretty decent guarantee. Is that a government guarantee (aka socialism :-) ), or a p...
- Tue Aug 25, 2009 11:47 am
- Forum: Investing - Theory, News & General
- Topic: The Decumulation Phase
- Replies: 138
- Views: 70892
I've read a little bit of it so far, and its very interesting to see how annuities can help outsource some of the risk and improve performance, even in the green zone. However, I think some caution is in order when considering annuities. In Chapter 33 we see With a life annuity, both market risks and longevity risks are eliminated. You have lifelong income, period. Depending on what type of options you choose, inflation risk may also be eliminated. " Lifelong income, period "... Hmm ... I don't see any discussion at all of the addition of solvency/credit risk in the issuing institution. Although I like the concept of annuities, I am not sure I trust any of the existing financial institutions to be around in 40 years! ( If the eva...
- Mon Aug 24, 2009 10:46 pm
- Forum: Investing - Theory, News & General
- Topic: The Decumulation Phase
- Replies: 138
- Views: 70892
I've read a little bit of it so far, and its very interesting to see how annuities can help outsource some of the risk and improve performance, even in the green zone. However, I think some caution is in order when considering annuities. In Chapter 33 we see With a life annuity, both market risks and longevity risks are eliminated. You have lifelong income, period. Depending on what type of options you choose, inflation risk may also be eliminated. " Lifelong income, period "... Hmm ... I don't see any discussion at all of the addition of solvency/credit risk in the issuing institution. Although I like the concept of annuities, I am not sure I trust any of the existing financial institutions to be around in 40 years! ( If the eval...
- Fri Nov 21, 2008 9:54 pm
- Forum: Investing - Theory, News & General
- Topic: Dividend projections?
- Replies: 8
- Views: 2085
Welcome to retirement. Equity dividend payments are an important part of our income. The portfolio is about 50-50. The bond/cd side pays about 4.5%, the stock side pays around 2.5%. So the total cash thrown off by the portfolio is around 3.5% which certainly does pay the bills. Since I'm retired, I don't care so much about NAV and share price, as long as the cash generation is reasonably constant.DaveTH wrote:Neither of the 2 funds you mentioned pay much in the way of dividends. I hope you weren't counting on the distributions to pay the bills.
- Fri Nov 21, 2008 6:25 pm
- Forum: Investing - Theory, News & General
- Topic: Dividend projections?
- Replies: 8
- Views: 2085
Dividend projections?
The bulk of my US equities are in VTCLX and VTSAX. VTSAX pays quarterly dividends, and VTCLX pays yearly. Is there any way to project the December dividend/share for these funds? Is yield times price per share a reasonable estimate? (divided by four for VTSAX since it pays quarterly)... Anyone have a sense of how dividends are holding up? A quick look at GE, Proctor and Gamble, and Exxon seems like they are paying dividends at a fairly constant $$/share. (which as a percent of share price, is obviously much greater). I'm recently retired and living off dividends & interest. Despite large capital losses in the portfolio, the monthly dividends in my bond funds have been refreshingly constant on a per share basis. I'm hoping the same is tr...
- Sat Oct 18, 2008 11:20 am
- Forum: Investing - Theory, News & General
- Topic: Why is Vanguard Intermediate-Term Tax-Exempt Fund down?
- Replies: 38
- Views: 11366
I think a bond fund is best viewed as a fixed income investment. My monthly distribution from VCADX has been remarkably constant, the NAV and the yield typically balance each other out. I think this makes sense, since the underlying bond portfolio is throwing off a predictable $$ amount every month, so that the income per share is relatively constant. In fact I just called vanguard and as of today, my october distribution will be well within its usual small monthly variance, and nothing to be alarmed about. That being said, there is certainly an element of flight from muni's which is driving the NAVs down, I think the NAV is more a reflection of the supply/demand imbalance, than the actual value of the underlying income stream. However, I'm...
- Sat Apr 05, 2008 10:51 am
- Forum: Investing - Theory, News & General
- Topic: Are you concave or convex?
- Replies: 26
- Views: 8340
I think this terminology is clear in the mathematical sense. Given a stock that is going up, if you bet that its rate of increase will increase (i.e. it will accelerate), you are making a convex investment. If you bet that that the increases will slow, you are make concave one.
Of course only one of these strategies will be right at any given time. Given the standard fluctuations in the market, you can make money with either strategy, assuming your timing is right!
Of course only one of these strategies will be right at any given time. Given the standard fluctuations in the market, you can make money with either strategy, assuming your timing is right!