01-09-2019, 12:48 PM
(12-13-2018, 04:34 AM)crimsonghost747 Wrote: First of all, I agree with the notion that 80 stocks seems to be way too much. Even if you just skim through their quarterly reports and spend 10mins on each, you'll end up using 13h everytime the quarter changes. I know I spend 10min on some, 1h on other reports. I've been between 20 and 30 stocks for a while now and personally that feels like a good range to be in.
Secondly, I'm not too sure why everyone feels like they can't eat out of the portfolio when they get old. Even if you plan on going somewhere after you die, you can't take any of it with you! I get that you want to leave some for your family and that is fine but it's not like you have to leave every dollar you've managed to acquire in your lifetime. Do the math on it, you probably have figured out an X amount of yearly income that you would like to have so you can retire early, right? And you've probably got an estimated sum of where your portfolio needs to be to accomplish that? Just see how that amount (and the time it takes to get to that amount) changes if you choose to withdraw different amounts on top of the dividend income. Even a 2% withdrawal will significantly reduce the amount that you need to get to your goal. And while you withdraw 2% annually, I'm still pretty certain that the value of the portfolio will keep going up.
It's not that one needs to plan on "Not spending the capital". We didn't plan it, but once the portfolio got to a certain size, and we did not need to draw down capital to meet expenses, it continued to grow and compound quickly (the larger it gets the faster it grows). Now we definitely don't have to draw down capital and its still growing. So we build up our cash reserve and just let the portfolio continue on its own.
As for the OP, I believe one should develop their own DG strategy, have an evaluation process, then follow that process to develop a "List of Stocks to Consider". The list would be the stocks one would buy, hopefully at a reasonable price. Ignore all other stocks, or add new stocks after putting the through your evaluation. One does not need to buy or own all stocks on their list, they are just the ones you've screened and determined they meet your own criteria. We are fully invested, retired and only own 12 stocks in all our accounts. I don't suggest 12 is ideal, rather that one does not need to own any specific number, rather, build your portfolio over time and only add new stocks if they meet your buy criteria. Once you have a portfolio you are happy with, add to your current holdings and monitor those holdings and grow your income.