(03-05-2014, 11:16 AM)hendi_alex Wrote: My daughter is just getting a decent start at age 33. I opted to buy MAPTX and PXSV for her account which should be mostly growth oriented. The PXSV is up +10.6% since the purchase on a dip on 2/3. PXSV is a small cap value fund. It pays a small dividend of just over 1%. Her account also holds some DG and income types of stocks to help generate more cash flow that will be placed almost exclusively into growth stocks or funds. It is funny that her best performer is a stodgy old income stock, PBA, which is up 26% not counting dividends.
Her portfolio which is about equally weighted: AAPL, PBA, POT, PXSV, SDRL, TGP, WMB, MAPTX
On a strong market dip, I'll place any of her new cash into a tech index fund, up to normal weighting.
So is your reasoning for doing this, you think a purely DGI strategy will underperform as far as total return goes?
(03-05-2014, 11:47 AM)EricL Wrote:(03-05-2014, 10:50 AM)fiveoh Wrote: The dividends are nice, and it is a great strategy if you need income. However, I'm starting to think I'd be better off in index funds. My portfolio has underperformed the market the last 2 years(-1% in 2012, -4% in 2013 vs SPY) and is down 1.5% vs the S&P this year. I wont need the income for another 10 years. If my return doesn't pick up, I'm thinking of switching to index funds and then transitioning to DGI when I need the income. I don't expect DGI to perform as strong in a bull market(like we've been in) so I'm trying to wait it out a few more years and see how it stacks up.
SCHD is a nice ETF I found on Schwab that invests in DGI type stocks. Something to consider if you decide to go that route.
Thanks, I'll check it out. Although, I'm looking for a higher TR and am thinking div stocks will be somewhat lower than the market average.