Posts: 2,398
Threads: 54
Joined: Jul 2013
Reputation:
35
(04-25-2021, 07:36 PM)ken-do-nim Wrote: Hi Eric,
I was studying your portfolio, and I noticed that the overall yield is 2.72%, similar to your parent's proposed portfolio of 2.66%. Do you choose stocks that just happen to arrive at those yields when mixed together, or do you consciously work to pick stocks that come to around that figure?
Was pure coincidence that the yields ended up with similar values.
I could easily bump up the income for my parents' portfolio by swapping out some of the ETFs for more in individual stocks. It was put together as a starting point for them to look at, they haven't made any final decisions on it yet.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
(04-26-2021, 02:03 PM)EricL Wrote: (04-25-2021, 07:36 PM)ken-do-nim Wrote: Hi Eric,
I was studying your portfolio, and I noticed that the overall yield is 2.72%, similar to your parent's proposed portfolio of 2.66%. Do you choose stocks that just happen to arrive at those yields when mixed together, or do you consciously work to pick stocks that come to around that figure?
Was pure coincidence that the yields ended up with similar values.
I could easily bump up the income for my parents' portfolio by swapping out some of the ETFs for more in individual stocks. It was put together as a starting point for them to look at, they haven't made any final decisions on it yet.
You could easily put them above 3% and still have plenty of growth plays.
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
Ok; the reason I asked is because I'm making a conscious effort to keep my portfolio yield between 2 and 2.5% for the time being. Too little and I'm too heavy on pure growth; too much and I'm too light on pure growth. I was wondering if you were thinking along the same lines.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
(04-26-2021, 07:31 PM)ken-do-nim Wrote: Ok; the reason I asked is because I'm making a conscious effort to keep my portfolio yield between 2 and 2.5% for the time being. Too little and I'm too heavy on pure growth; too much and I'm too light on pure growth. I was wondering if you were thinking along the same lines.
That is a perfect place to accumulate IMO. Still well above SP500 yield so you get some income to re-invest. A lot of those stocks paid 3%+ not so long ago. Share price just outgrew the dividend raises which usually means a stock that gave you capital appreciation. Who doesn't love a T or MO div? But fact is you traded yield for a dead stock for years. There are times when that is fine. The past few years hasn't been one of those times if you analyze it rationally. Maybe they will run past 2018 SP and maybe they won't. Boring UTEs outperformed them with a smaller dividend. Never mind a successful growth stock and there are hundreds of large cap safe examples.
Posts: 2,398
Threads: 54
Joined: Jul 2013
Reputation:
35
My thoughts on growth vs. income.
High Dividend Growth Stocks
If I had to do it over again with my public portfolio I'd go more with the 1-2% yielders and less with the 4-6% yielders.
Let capital gains build with the higher growth stocks and save the higher yielders until I need the income at retirement.
Fortunately, I've had a good mix of both so I've generated some nice capital gains in stocks. I've learned a lot in the eight years since I started the project, which was the whole reason for doing it in the first place.
Posts: 2,398
Threads: 54
Joined: Jul 2013
Reputation:
35
(04-26-2021, 10:07 PM)EricL Wrote: My thoughts on growth vs. income.
High Dividend Growth Stocks
If I had to do it over again with my public portfolio I'd go more with the 1-2% yielders and less with the 4-6% yielders.
Let capital gains build with the higher growth stocks and save the higher yielders until I need the income at retirement.
Fortunately, I've had a good mix of both so I've generated some nice capital gains in stocks. I've learned a lot in the eight years since I started the project, which was the whole reason for doing it in the first place.
Here are two more articles I wrote on Seeking Alpha talking about high growth vs. high yield.
High Yield Or High Growth: Which Belongs In Your Portfolio?
High Yield Or High Growth? Real World Vs. ‘The Matrix’
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
Heh, I've apparently reached my free article limit!
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
(04-27-2021, 09:59 AM)ken-do-nim Wrote: Heh, I've apparently reached my free article limit!
The site is free if you have a log on.
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
04-27-2021, 10:10 AM
(This post was last modified: 04-27-2021, 10:11 AM by ken-do-nim.)
(04-26-2021, 10:07 PM)EricL Wrote: My thoughts on growth vs. income.
High Dividend Growth Stocks
If I had to do it over again with my public portfolio I'd go more with the 1-2% yielders and less with the 4-6% yielders.
Let capital gains build with the higher growth stocks and save the higher yielders until I need the income at retirement.
Fortunately, I've had a good mix of both so I've generated some nice capital gains in stocks. I've learned a lot in the eight years since I started the project, which was the whole reason for doing it in the first place.
That's another question I've been thinking about.
Option 1: gradually increase the yield in my portfolio. Yield minimums by age:
Age 48: 2%
Age 50: 2.5%
Age 52: 3%
Age 54: 3.5%
Age 56: 4%
Age 58: 4.5%
Age 60: 5%
Option 2: big switch-over from growth to income at age 60
Age 48-59: 2%
Age 60: 5%
(And then assuming $3M goal reached, x .05 = $150,000 per year)
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
A port average yield target maybe? Not a chance I force myself to only own 5% yielders immediately into retirement. I'd be left with T-MO and ETFs that do magic finance tricks with all my money. I've seen that movie in a down market.
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
04-27-2021, 10:26 AM
(This post was last modified: 04-27-2021, 10:27 AM by ken-do-nim.)
(04-27-2021, 10:18 AM)fenders53 Wrote: A port average yield target maybe? Not a chance I force myself to only own 5% yielders immediately into retirement. I'd be left with T-MO and ETFs that do magic finance tricks with all my money. I've seen that movie in a down market.
Sorry that was unclear; port average yield. There would still be plenty of 2-3% yielders in there, balanced off by 7% ers, so that I can earn the $150,000 a year in dividends I mentioned above.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
(04-27-2021, 10:26 AM)ken-do-nim Wrote: (04-27-2021, 10:18 AM)fenders53 Wrote: A port average yield target maybe? Not a chance I force myself to only own 5% yielders immediately into retirement. I'd be left with T-MO and ETFs that do magic finance tricks with all my money. I've seen that movie in a down market.
Sorry that was unclear; port average yield. There would still be plenty of 2-3% yielders in there, balanced off by 7% ers, so that I can earn the $150,000 a year in dividends I mentioned above.
That's a reasonable plan. The investment world will evolve by then, and you are educating yourself well in advance. I had virtually in interest income until age 55. Just invested n growth for decades. The plan was to convert it to an annuity that would happen next year. (At current FED Funds rate interest rates next year, Ugg!) Then I found out I could just transfer my account and have total control. Though I doubt I will, I could always buy an annuity 10yrs from now if interest rates were to return to something I'd consider normal.
Back on your topic, I currently have no plans to ever completely abandon growth. Fast forward ten years and I happen to have a growth stock that doubled in only a few years? I have no problem peeling off 5% to spend, and put the rest in an income vehicle. I'd still be far ahead of a non-growth high yielder. Rules and plans are good. You have a decade to "what if" the plan. That what if is a big deal we can't foresee a decade out.
|
