Skip to main content

Some advice is pure crap

Retirement Strategy: The Cold Hard Facts Of Dividend Growth Investing

An article on Seeking Alpha of the same title started out pretty well. At least for three paragraphs. He said: "If I had to point to the one truth about dividend growth investing that was the most difficult for me to follow, it was to focus on the income stream, its reliability, its continual growth, as well as its future prospects."

Of course dividend investing is about income stream. You're supposed to live off your dividends in retirement. Well, in some strategies, anyway. 

Then all turned to shit, pardon my French. "Watching the value of my portfolio drop by 20-50% did give me sleepless nights and plenty of heartburn!"

I stopped reading at that point.

Never, ever let your portfolio drop 20 to 50 percent. Keep the 90 to 100 percent and burn the 4% minimum required to live off of and save your money for another day. As an alternative, use money markets or bonds, or -- heaven forbid -- cash. 

Most market downturns last 18 months, so it won't be forever.

Let me repeat my point again that: Never, ever let you're portfolio drop more than 10%.  The number two rule in investing is to use stops. (Number 1 is risk management).

A 50% drop in your portfolio means you have to make 100% to get back to even. 

In the last market drop, it took six or seven years to break even. Can you wait that long? Yea, you might have some dividend streams, but many companies will cut dividends on market crashes. Then what?



Always have a plan for market drops. Always have back-up cash. 

Don't listen to idiots. (And unfortunately, most CFAs and brokers are idiots -- well maybe not idiots; they make money when you're fully invested).

Caveat Emptor!

Comments

Popular posts from this blog

The Hidden Agenda Behind the Global Warming Hysteria

Climate change activists are not just interested in reducing carbon emissions in order to "save the planet." Their underlying desire is to overturn capitalism and replace it with socialist governments worldwide. 

Our story starts with the IPCC, or the Intergovernmental Panel on Climate Change, a U.N. organization. "And any settlement of the Global Warming issue by the UN would entail massive transfers of wealth from the citizens of wealthy countries to the politicians and bureaucrats of the poorer countries." (1)

In 1992, at the first U.N. Earth Climate Summit in Rio de Janeiro, Brazil, Program Executive Director Maurice Strong stated, very candidly: 

"We may get to the point where the only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?" (2)

Former U.S. Senator Timothy Wirth (D-CO), then representing the Clinton Administration as U.S. undersecretary of state for global issues, join…

IRA Taxes: Rules to Know and Understand

Article from schwab.com


Individual Retirement Accounts (IRAs) can be a great way to save for retirement because of the tax benefits they can provide. If you’re eligible, you can choose a traditional IRA for an up-front tax deduction and defer paying taxes until you take withdrawals in the future. Or, if eligible, you might opt for a Roth IRA and contribute after-tax money in exchange for tax-free distributions down the road.


So, what's the catch? There are a few. If you run afoul of some of the IRS rules surrounding these accounts, the penalties can be quite stiff—all the way up to a disqualification and taxation of your entire account.

Ignorance of the law is no excuse, and with few exceptions, the IRS isn’t very forgiving of mistakes. Knowing the rules can help you navigate the many potential IRA tax traps you might encounter on your way to retirement.

Keep in mind that when we discuss taxes and penalties, we’re referring to those at the federal level. In most states, you will also…

Critical Financial Steps When Buying a Home

In my lifetime, I have bought six houses, and sold five. I currently live in the sixth, which was new construction, which was an adventure unlike purchasing an existing home, But the principles of buying a home are the same, whether you are purchasing a new home, or an existing home.

1. Understand why you want to buy a house
Purchasing a home is a major decision that shouldn’t be taken lightly. It’s important to define your personal and financial goals before proceeding. Think about factors such as whether you’re craving more stability, whether it makes sense financially and whether you’re prepared for the responsibility of maintaining a home.

You should explore some resources on Renting vs. Buying before you make the decision. I posted a article with a couple of good videos on this subject, and bankrate.com as an informative article here
2. Dig Into Your Credit Reports and Credit Scores Your credit score and history are the first things all lenders will look at to decide whether or …