No. of Recommendations: 0

Pixilated - 02-18-2000

Although one need not always totally agree with everything TMF Pixy writes, one must admit that he so often writes with such thoughtfulness, brilliance, passion, and clarity of expression that one just about wants to cry at the beauty openly revealed, the sounds seemingly heard, the colors almost felt, and the emotions actually touched by his excellent use of written words.

With reference to the foregoing link, please compare the components of, the performance of, and the prospective performance of TMF Pixy's various Retiree Portfolios to that of a Practical Proportioned Perpetual Program (PPPP).

(To keep comparisons simple and the playing field relatively level we shall begin with $95,000 ($100,000 less $5,000 withdrawn) as of 12-10-99.)

PPPP - (Somewhat Agressive):

20% DIA, 20% SPY, 40% QQQ, and 20% cash at interest:

169 DIA @ $112.0625 + $10 = $18,948.56
134 SPY @ $141.8375 + $10 = $19,021.25
240 QQQ @ $158.3125 + $10 = $38,005.00
Cash at short-term interest $19,025.19
TOTAL INVESTED on 02-10-99: $95,000.00
169 DIA @ $102.2500 = $17,280.25
134 SPY @ $135.3125 = $18,131.87
240 QQQ @ $196.8750 = $47,250.00
Cash at s.t. interest $19,025.19
TOTAL VALUE 2-18-00: $101,687.31 INCREASE = $6,687.31

From time to time, please do compare the components and the numbers and decide for yourself which might be more comfortable, practical, and profitable for the retiree who might really have to rely upon it during actual retirement.

I do most strongly maintain that it is Ridiculously Risky and Totally Inappropriate to suggest or recommend, directly or indirectly, by example or otherwise, that the Foolish Four be the sole stock components of a Retiree's portfolio during retirement.

I know that TMF Pixy strongly, although mistakenly, believes in the Foolish Four and his faith is such that he has actually put his money where his mouth is and that he can well afford to do so, however many retires cannot afford to take that sort of risk and should not in any way be encouraged, by example or otherwise, to do so.

I would respectfully, but most seriously, suggest that TMF Pixy and anyone who might consider risking it all on only the Foolish Four as the sole stock components of a retiree's actual retirement portfolio do ask first one simple question:

Since the Foolish four and various other DDA approaches relied primarily upon dividend yields during a certain historical period of time when dividends were believed to have accounted for approximately one-half of the total yield of the Foolish Four and/or various other DDA approaches, yet did not seem to work as well during earlier periods when dividend yields were higher and dividends were more significant and has not worked in later times as dividend yields became somewhat smaller and dividends became somewhat less significant, why should it logically be expected to work as well in future times when dividend yields are expected to become even smaller and dividends anticipated to become even less significant?


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