patrick.net

Ok I'll keep 8-10% in dividend stocks with DRIPs since Rin recommends it.
NAC gives me almost 5% tax free btw - though this return may go down with leverage now.

And: Has the the Brexit Issue already been priced in, or will Brexit follies start a European downturn, followed by our own recession? This is an ugly uncertainty.

clambo says

Everyone focuses on the value of the indices while not counting the compounding dividend effect which over time is tremendous.

I remember when the Dow was 4000 and they said it was far too high and ready to crash.

I follow the W5000 index anyway.

When I look at my stock mutual funds over decades, I see a significant % of the increase was actually dividends. I'm not going to give that up.

What are your favorite dividend holds? What do you think about non-dividend-pooping dividend ETFs like NOBL?

rocketjoe79 says

And: Has the the Brexit Issue already been priced in, or will Brexit follies start a European downturn, followed by our own recession? This is an ugly uncertainty.

I think Brexit is a non-issue, outside of a 1 year window. Either:

A. No-deal Brexit. 1.5 months of slight panic. UK declares willingness to trade with EU states on WTO terms, continues open and vigorous trade with US and especially Commonwealth countries. City of London retains global finance hub status. EU later begs for better deal. Boris Johnson strings them along and eventually offers UK-beneficial deal.

B. Foot dragging. UK begs for 3 more months. EU offers shit deal. UK takes it out of low self-esteem. Trade union effectively remains, but with UK as sad economic vassal state of EU. City of London retains global financial hub status.

C. Total capitulation. Reversal of democratically selected outcome. Re-vote on referendum called. Everyone suspects tampering. Vote occurs and 'remain' wins by a nose. Bitter internal acrimony. Crime spikes (even more). Sanctity of UK democracy cast into doubt. City of London retains global financial hub status. Financial life continues unaffected for non-UK citizens.

About Brexit they were not on the Euro. If a large country like Italy or Spain quits the Euro, that may be something else!

cmdrdataleak says

A. No-deal Brexit. 1.5 months of slight panic. UK declares willingness to trade with EU states on WTO terms, continues open and vigorous trade with US and especially Commonwealth countries. City of London retains global finance hub status. EU later begs for better deal. Boris Johnson strings them along and eventually offers UK-beneficial deal.

This is why I'm hoping Modi, Trump, Abe, Moon, Morrison, (forget Trudeau the Wimp) etc. sent a high powered delegation on a speaking tour, perhaps starting at Manchester's Free Trade Hall, talking about all the fantastic, better deals UK Customers will get, and how they'll have to probably setup UK service centers and final assembly locations.

Big names if not launched by the leaders themselves, and really get the Remoaners to actually explain how staying in the EU is less limiting that outside it, which they cannot do. It's incredibly ironic that Remoaners have staked out remaining as "Open" but Brexit as "Provincial" when it is actually the opposite.

Another great way to convince the Left is the Amazon/Google Dublin Tax Dodge will be likely be shut down if the UK makes a clean Brexit. And why Varadkar is scared shitless.

For cmdrdataleak's question, I generally have owned stock mutual funds which have had capital appreciation as the objective. My W5000 index fund may or may not be considered a capital appreciation fund. Although my funds were not focused on dividends, a significant % of the overall return over several decades seem to be dividends anyway.

I have some inherited funds which have a focus on dividends, dividend growth, and income including dividends; Vanguard Equity Income, Vanguard Dividend Growth, Vanguard Wellington, Vanguard Wellesley Income.

Although it may be higher risk, prefer the tax efficiency of my funds that were not focused on income; now I have some tax consequences which I wish I had avoided. I should have sold many of the income producing funds when I inherited them and bought more capital appreciation funds or more of the W5000 index fund.

clambo says

My W5000 index fund may or may not be considered a capital appreciation fund. Although my funds were not focused on dividends, a significant % of the overall return over several decades seem to be dividends anyway.

The dividend for the Vanguard Total Stock Market Index Fund (aka: Wilshire 5000) has averaged about 2%. The total average annual return since 1992 has been 9.62%.

https://personal.vanguard.com/us/JSP/Funds/Profile/VGIFundProfile0085Content.jsf?tab=0&FundId=0085&FundIntExt=INT

This is alarming as I would think this fund should have a total average annual return of at least 11% since 1992 when you consider the amount of appreciation in the 1990s.

AD, my other funds have often performed better than the W5000 fund. On the other hand, it's not going to surprise me on the downside as some other popular funds have flamed out.

My best performing funds have been managed by Primecap in Pasadena (the funds were sold by Vanguard) and some funds at T. Rowe Price

One nice thing about the W5000 index fund was I didn't get a large 1099 from the fund which is also good for long term returns.

If the W5000 fund since 1992 had an average return of 9.62% then that implies that the market itself rose about this amount (minus fees and trading costs in the fund).

Today my expenses for the fund are a super low 0.05% because I have "admiral shares".

Fidelity sells a W5000 fund with 0% expense ratio and no minimum investment.

clambo says

Primecap in Pasadena

Thanks, I'll check out PrimeCap which is located in Pasadena, CA.

From everything I've read, the broad market should average 11% to 12% historically. It looks like the 2000's were hard on the Wilshire 5000 index funds and that is why the Vanguard fund for the Wilshire 5000 is only 9.6% annually since 1992 (and with a 0.12% expense ratio).

More boring grist for the mill about my mutual fund experience for several decades.

I have several kinds of funds, some are managed, some are index funds; some have done very well and some have been average.

But, when I am curious about my net worth on some day after the market closes, if I just look at the W5000 index increase % and multiply it by my stock funds total net, the result is almost identical to adding up the balances that night.

clambo says

But, when I am curious about my net worth on some day after the market closes, if I just look at the W5000 index increase % and multiply it by my stock funds total net, the result is almost identical to adding up the balances that night.

Congratulations you have at best matched the Wilshire 5000's performance.

Over time my total return is slightly higher but I can estimate my net worth increase without too much difficulty.

I haven't done anything, the managers of the mutual funds have done it.

There are a lot of people once working at Merrill Lynch, Bear Stearns, Lehman Brothers and other places who sure wish they had settled for the W5000.

Most investors do worse than the indices and mutual funds because they sell mutual funds to buy the ones which have already gone up and become famous. This actually makes you lag fund performance over time.

clambo says

buy the ones which have already gone up and become famous.

Yes, its called chasing gains.

Go long. Realize the significance of risk premium and efficient market theory.

clambo says

when I am curious about my net worth on some day after the market closes, if I just look at the W5000 index increase % and multiply it by my stock funds total net, the result is almost identical to adding up the balances that night.

I have to log into about 10 websites, copy and paste numbers into my excel spreadsheet. Takes me about 30mins! I only do it about 2-3x per year though. Mint.com and things like that give me the creeps.

"my.yahoo" used to compute and show the market value changes of stocks, etc., pretty well but they messed that up a decade or so ago.

I saw that if I want to add outside investments to my Vanguard page I can see them all together if I want to. I didn't do that however.

Most of my funds are with 2 companies, Vanguard and T. Rowe Price. The other two are small amounts of a couple things which I inherited.

In the 80's and early 90's the people I talked to were older than I; now when I call up they sound very much younger than who worked at these places before. I believe the business has grown huge in the last 30-40 years.

Off the subject even more; I can remember a trade at Merrill, Dean Witter, etc. cost $250; today I get 25 free trades per year and after that they are just $2, even if I want to speak to a human to make the trade over the phone.

The glass is still only half empty...

FortWayneIndiana says

Citibank offer 2.25 on CDs

Capital One is 2.7%, Discover is 2.65%

Didn't Iwog do this and basically throw 125% of his potential net worth into a fire?

On principle I will never, ever, lend my money to a bank in return for lousy low interest and "safety".

Goran_K says

Didn't Iwog do this and basically throw 125% of his potential net worth into a fire?

Watch me do the same!

Yes, that's what America needs is more mutual funds especially index funds. There are now more index funds than there are stocks traded on the NYSE. You'd figure that people would figure out that there is a scam going on when Fidelity came out with index funds that charge no management fees. I figured that "zero bound" would last about a month and I was right. Now there is an EFT that has a negative expense ratio. Definitely the time to invest in stocks is here.

zzyzzx says

Capital One is 2.7%, Discover is 2.65%

Do they have penalties? I just move money to Ally bank which has 2.3% 11month no withdrawal penalty.

Heraclitusstudent says

Goran_K says

Didn't Iwog do this and basically throw 125% of his potential net worth into a fire?

Watch me do the same!

I'm not questioning the logic, just the timing.

I'd wait to see cracks in the dam, hopefully selling 12% or so from the top.

The likelihood that you’ll time exit and rentry correctly isn’t in your favor.

CBOEtrader says

I'm not questioning the logic, just the timing.

I'd wait to see cracks in the dam, hopefully selling 12% or so from the top.

By the time you see the cracks clearly, the market will already have dived.
The timing is a crap shoot.
But a decision needs to be made.

"There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries."

For the record: Brutus got beaten and committed suicide after making that decision.

Heraclitusstudent says

Watch me do the same!

Why? Are you making a big purchase or do you actually think the market is going to crash like Iwog did?