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Coffee Break Analysis
#1
Good morning....

Just sipping my coffee and playing around with Portfolio Visualizer after reading an SA article warning that DGI may not be the be all-end all as interest rates rise.   Using the DG50 portfolio created by SA author Mike Nadel as a foundation I added a few random picks of my own bringing the portfolio count to 61 stocks.

For round numbers I began with a $1 million dollar portfolio that withdrew 4% (inflation adjusted) annually.  I was able to get PV to look back from 2001-2017.

The three portfolios:

Portfolio 1:  My DGI "61" pure stock (a variation on Mike's Gold Standard DG50)

Portfolio 2:  My DGI "61" adjusted to include a 30% allocation of Vanguard Total Bond Fund (VBMFX)

Portfolio 3:  100% Vanguard Wellington (VWELX) which is roughly a 65/35 allocation.  I have always considered this a a no-brainer for my better half in an emergency...the fund goes back to 1929.

In fact if you substitute Vanguard Growth Index (VIGRX) or Vanguard Total Stock Market Index(VTSMX) in Portfolio 3 at 100% you end up with $200,000 and $100,000 less respectively.

So the bottom line....press on...we've got a good plan here.  If you are just discovering DGI,  Mike Nadel's DG50 series is a great place to start.

Cheers!

Rob

   
There are people who use up their entire lives making money so they can enjoy the lives they have entirely used up
Frederick Buechner
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#2
Thanks, Rob. Curious to know what eleven stocks you added to the base 50. Always good to see analysis like this.
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#3
That's very interesting, Rob. Thanks for the link also. I'm gonna check that out when I have a little more time.
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