No. of Recommendations: 1
From my web site:

Dividend Strategies versus Valuation Informed Indexing

I list the 30-Year Safe Withdrawal Rate for dividend strategies (dividend blend, delayed purchase and income investing) as 6.0% of the original balance (plus adjustments to match inflation). I list the 30-Year Safe Withdrawal Rate of Valuation Informed Indexing (with preferred stock and corporate bonds) as just under 5.5% (plus inflation).

The differences are smaller than indicated.

Dividend strategies provide a continuing income stream that grows a little faster than inflation. But the income is vulnerable to dividend cuts. Judging from the S&P500 index, this could be as deep as 25% worst case (to 75% of the original income stream after adjusting for inflation). The 6.0% withdrawal rate, worst case, is subject to a temporary setback to 4.5% (plus inflation).

With a dividend strategy, I avoid selling any shares. With Valuation Informed Indexing, I sell shares as a matter of routine.

I subject Valuation Informed Indexing to a strict withdrawal rate. I allow no temporary relief for bad times.

I also limit Valuation Informed Indexing stocks to the S&P500. However, it would still be Valuation Informed Indexing if I were to convert to a dividend exchange traded (index) fund such as DVY when valuations were attractive. This would be an advanced form of a delayed purchase. It would remove the 30-Year time frame of Valuation Informed Indexing. It would lock in a high withdrawal rate.

You can combine dividend strategies and Valuation Informed Indexing to your advantage.

Have fun.

John Walter Russell
Print the post Back To Top
No. of Recommendations: 2
I would post a reply, but you would only FA it, so I guess I'll just let this stand as my reply. Hey, I think you might be related to someone we all know...hocus, another poster of limited sense.
Print the post Back To Top
No. of Recommendations: 2
I would post a reply, but you would only FA it

LMAO.

His post is more of the same -- same errors; same lack of attention to any issues that have been raised; same misleading (at best) comments.

Acme
(Who notes that JWR has never explained how he got that eyeball of his certified.)
Print the post Back To Top
No. of Recommendations: 1
And same Weird Capitalization of words, as if thet imports some veracity.
Print the post Back To Top
No. of Recommendations: 2
This whole thing over the past several days has been like a bad car wreck. I know what it is, its not pleasant, but I still feel I have to take a look. I can't believe I keep reading these posts from JWR.

I'm not having fun

Bill
Print the post Back To Top
No. of Recommendations: 4
W401K writes,

This whole thing over the past several days has been like a bad car wreck. I know what it is, its not pleasant, but I still feel I have to take a look. I can't believe I keep reading these posts from JWR.

I'm not having fun


I created this site several years ago as a companion to JWR1945's

http://www.retireearlyhomepage.com/intercstinsights.html

intercst
Print the post Back To Top
No. of Recommendations: 0
I mostly hang on the 401k board, had not seen that before, very very funny. Thanks for taking the time to do that, I'm sure it went over with the regulars on this board and the LBYM board as well. You are one of the best out there.

Bill
Print the post Back To Top
Advertisement