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Post by racqueteer on Oct 9, 2022 21:48:42 GMT
racqueteer You RELATED to FD1000? READ some of his POSTS. There are worthwhile benefits to owning cefs; just as there are for buying annuities. That aside, you made a statement regarding the efficacy of the market as an inflation hedge. I merely pointed out that mathematics do not support your assertion. I gather that you agree; as you've made no attempt to challenge what I wrote. What FD has to do with THIS discussion escapes me. You made an unequivocal statement which was wrong, and I corrected you; simple as that.
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Post by steelpony10 on Oct 9, 2022 22:47:35 GMT
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Post by anitya on Oct 9, 2022 22:59:41 GMT
The risk tolerance should be zero for 'Armageddon.' This is not a normal investment risk. The risk tolerance goes down to zero for this type of risk. You take your pick. I had to look up 'Armageddon.' Below are two sources (I just copied from the search page) which gave me no clue what you are talking about. I am assuming you are just having fun on a Sunday. If not, can you please elaborate why you see / anticipate zero investment risk tolerance? Wikipedia - "The word Armageddon appears only once in the Greek New Testament, in Revelation 16:16.The word is a Greek transliteration of the Hebrew har məgiddô (הר מגידו). Har means "a mountain or range of hills". This is a shortened form of harar meaning "to loom up; a mountain".Megiddo refers to a fortification made by King Ahab that dominated the Plain of Jezreel." Britannica - Armageddon, (probably Hebrew: "Hill of Megiddo"), in the New Testament, place where the kings of the earth under demonic leadership will wage war on the forces of God at the end of history. Armageddon is mentioned in the Bible only once, in the Revelation to John, or the Apocalypse of St. John (16:16). The Palestinian city of Megiddo, located on a pass commanding a road connecting Egypt ...
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Post by richardsok on Oct 9, 2022 23:25:20 GMT
Less than half Utg payout is from earnings.
Can't post much. Am on the road with only a tablet.
Fly fishing in W Carolina, now in Charleston for anniversary.
Still lurking when the wife drives, tho.
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Post by racqueteer on Oct 9, 2022 23:38:02 GMT
racqueteer , I was joking with you. You post just LIKE FD. Anyway you being the serious type then my opinion is different and I believe there are no wrong opinions. That’s how I see it. I guess we should probably ignore each other, sad. Investing for income comes a lot easier for me it seems. 🍀 Fair enough. Your opinion is yours and as valid as anyone else’s. I have no reason to ignore you OR your pov; merely because we may disagree on some point or other. My original post was designed to point out an alternative way of interpreting the data you offered (and, in the process, correcting ’fish’s post in YOUR favor). Then I responded to something I believed to be incorrect. I have no dog in this race and have repeatedly indicated that, unlike FD for an example, I see no particular problem with income investing. I DO have a problem with some of the logic employed to support doing that, however, and I’m certainly going to challenge the math if it doesn’t support the conclusions. No offense intended; I assure you.
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Deleted
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Post by Deleted on Oct 10, 2022 0:10:01 GMT
back to the OP .... If a utility/infrastructure CEF such as UTG is of interest, one may also want to consider UTF, BUI, ERH, JRI, and even others. For data, cefconnect.com and cefdata.com and cefchannel.com . For possibly helpful analysis, seekingalpha.com/etfs-and-funds/closed-end-funds . edit: And to followup on the prior comment about the UTG distribution sources, the details on this appear in the Section 19a notices perhaps most easily seen at www.utilityincomefund.com/reaves-utility-income-fund#distributionsWay . edit2: Also note that for equity CEF's, part of the distribution is from capital gains and is normal and expected. If market conditions are positive and management is doing a good job, this is a non-destructive return-of-capital and there's even a possibility of a distribution increase. But if market conditions are negative like they are now and have been, it's obviously more difficult to preserve/increase capital. Since many equity CEF's have "income production" as their primary objective, CEF management may have to reduce a rich distribution to survive. Due Diligence with capital letters is needed for a CEF investor. --- Frank
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Post by retiredat48 on Oct 10, 2022 0:33:00 GMT
A viewpoint on inflation. For long term investors...remember:
--no inflation.............good to own companies/ stocks.
--moderate inflation.......good to own companies/stocks.
--severe inflation..........good to own companies/stocks.
--hyper inflation..........mandatory to own companies/stocks. (as they have an uncanny way of emerging from the financial dustbin---think German Companies after WWII)
Bottom line: Do not be talked out of/scared out of owning stocks/mutual funds/ETFs in your normal allocation percentages.
Good luck.
R48
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Post by johnsmith on Oct 10, 2022 10:15:50 GMT
Less than half Utg payout is from earnings. Can't post much. Am on the road with only a tablet. Fly fishing in W Carolina, now in Charleston for anniversary. Still lurking when the wife drives, tho. It's good to see someone sucking all the juices out of a good life. Bravo!
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Post by mnfish on Oct 10, 2022 11:06:26 GMT
PortVis shows that $10k of UTG held since Mar 2004 paid income of $9,882 (w/o div reinvest) in 12 years and income of $6,010 since 2016 to YTD with a $3,668 price gain. $10k/$19.560k = 51% total return in 18 years w/63% of that return coming from cash payments. To say that equities are a terrible hedge against inflation is just plain wrong. Portfolio visualizer assumes distribution reinvestment. Compare VTI to UTG which track similar results. I don’t think equities are keeping up with inflation at this time plus during Stagflation or 1999-2010. In fact both equities and income investments can go negative. But cash still can flow above one’s personal inflation rate with income holdings. I’m just pointing that out as an obvious difference to me. Others may spend down, flee to cash or wait which aren’t options for me. steelpony10, "You can also look at UTG in Portfolio Visualizer since inception. 72/8%+ means you’ll get all your investment back in 9 years or so. Get cap gains somewhere else if that’s important to you." Raq, pony, others, - My reply was in regard to the above bold. In my simplistic view you can't "get your money back" if you reinvest divvys unless you sell shares which pony never does. So, after collecting most of his original investment in 12 years of income he was left with $15,432 at the end of 2016 which today is worth $19,751. I did mess up badly on the % of total return but that's what happens when you're dealing with a simpleton. Pony - I don't have any issue with UTG or CEF investing but was more concerned about the equities/inflation comment. You're not concerned about the long-term values of CEFs but are concerned about the short-term values of stocks? Yet you've held AAPL and MSFT since 1998? That's what "boggles"(your word) my simplistic mind.
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Post by Chahta on Oct 10, 2022 11:50:51 GMT
steelpony10, the last paragraph above was my real question about AMZN. Why not liquidate all equities and buy CEFs? I think you have told me in the past you use CGs for big purchases. Like big boats.
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Post by steelpony10 on Oct 10, 2022 14:19:44 GMT
mnfish I probably got off base also. There’s a post to racqueteer that sites an article about equities and inflation. There’s a link at the rnd of this post. My experience led me to believe this is true. It’s one of the reasons I went with income (CEF’s for us). It’s what I see now also. Chahta All true. Time to start moving on. If I’m forced to wait I still know how to handle equities. I’ll wait to sell up to 2 years in down markets. I’ll see if VTI “grows” for now. It’s cannon fodder for more income if ever needed. Again these lulls helped lead to income investing. I’m not immune to change. If anyone has a better idea post it. I will not spend down unless forced so I’ve kicked that can down the road and waiting long time for a market recovery is not an option for me as a retiree. johnsmith Back to the OP. If it fits a plan my opinion is utilities any way are a good safe income source. redirect.viglink.com/?key=71fe2139a887ad501313cd8cce3053c5&subId=7191902&u=https%3A//blogs.cfainstitute.org/investor/2021/07/19/myth-busting-equities-are-an-inflation-hedge/
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Post by ECE Prof on Oct 10, 2022 14:47:08 GMT
I will wait for the "Armageddon" (to use someone's words) is over. Oh, no. Putin is hitting again and wheat soars. I read a story in Yahoo Finance that baby food and diapers in this country are getting scarce. Go, figure this one.
I sold all equities. Since VMFXX pays 2.79%, my expected income that I do not need has soared for the rest of the year. It will probably will only increase next month when the FED raises the rate again.
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Post by racqueteer on Oct 10, 2022 15:06:13 GMT
I missed this link, steelpony. For whatever value it might have, here are my observations:
The author writes: "Perhaps the real return is still positive and therefore equities did hedge against inflation. Nevertheless, stocks are volatile instruments and the average return conceals the dramatic drawdowns that occurred over the 70 years in question."
So he's saying his whole premise might be in error, but nevertheless, stocks are "volatile instruments". I'd submit that commodities (and cefs) are every bit as volatile; that has certainly been MY experience with them. The income aspect is a totally different argument than the "hedging against inflation" argument he's espousing. Anyway, interesting read, but I'm having a hard time accepting his premise, and his data isn't particularly persuasive.
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Post by steelpony10 on Oct 10, 2022 17:45:21 GMT
ECE Prof I think we’ve ruined johnsmith ‘s post. I apologize I think I might have started it. Again johnsmith a great choice to take advantage of this income sale, any income. I hope this lasts for 5-10 more years. 😇 “Booooo, Hisssss”.
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Post by ECE Prof on Oct 10, 2022 19:45:30 GMT
UTG's NAV has fallen big time to 26.08. It is not delicious, after all. The reality strikes it down. tinyurl.com/3ruxsafzUNII / Share (4/30/22) $-1.044 Rel UNII -94.42 UNII Trend Down
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Post by johnsmith on Oct 10, 2022 20:30:42 GMT
It's never going to have UNII
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Post by johnsmith on Oct 10, 2022 20:31:37 GMT
ECE Prof I think we’ve ruined johnsmith ‘s post. I apologize I think I might have started it. Again johnsmith a great choice to take advantage of this income sale, any income. I hope this lasts for 5-10 more years. 😇 “Booooo, Hisssss”.
LOL, not ruined at all, I learned a great deal from the discussion, even when it sometimes goes off topic.
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Post by racqueteer on Oct 11, 2022 11:19:01 GMT
johnsmith wrote: In times of market stress of unknown length:: 1. Go to cash and lose purchasing power, spend down or go into skinflint mode. 2. Wait it out. When the cash bucket is gone eat your seed corn in skinflint mode. 3. Have enough income coming in to keep on truckin (us) or enough to at least slow down spend down. 4. I believe the three unknowns are facts. 5. I fail to see how diversification or allocation works in situations like now.. Stagflation averaged over a 7% inflation rate. Equities were dumped, same old same old. 6. It is also my opinion investing up to retirement requires a different technique then in retirement which for most is a 15-20 year period. 7. The importance of portfolio value changes to the most sure cash flow. Having just enough reliable cash flow works until one runs into sudden permanent cash requirements. I ran into that twice with my parents. That’s why I’m trying to get way ahead of that situation any situation short of that is easy to handle
Sorry, quoting doesn't seem to be working this morning...
I would agree with all of these, while noting the obvious:
A pension may very well allow one to eliminate (or reduce) the impact of the last two of these. Being rich at retirement should eliminate a lot of these concerns.
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Post by steelpony10 on Oct 11, 2022 11:34:12 GMT
johnsmith , Adequate cash flow is the only solution I ever found for long lulls in market gains if this turns out to be one or a sudden permanent increase in cash needs without eventual forced spend down. For cash flow the further out on the risk branch the better because your dollar commitment is smaller. The earlier you start the better because any excess income can be compounded for more income. I still think being too conservative or relying on Mr. Market, studies, allocations, diversification of equities or fool proof schemes etc. fails in these situations. How are the people who started retirement in 2020 managing? In cash, waiting or in skinflint mode? The clock keeps ticking.
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Post by steelpony10 on Oct 11, 2022 11:58:48 GMT
racqueteer , Sorry I deleted that post which was posted in error. I was just making notes before I posted to johnsmith . I’m getting way off this OP anyway. I’m sounding like a broken record just like others. 🤮
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Post by Chahta on Oct 11, 2022 12:19:11 GMT
johnsmith , Adequate cash flow is the only solution I ever found for long lulls in market gains if this turns out to be one or a sudden permanent increase in cash needs without eventual forced spend down. For cash flow the further out on the risk branch the better because your dollar commitment is smaller. The earlier you start the better because the any excess can be compounded for more income. I still think being too conservative or relying on Mr. Market, studies, allocations, diversification of equities or fool proof schemes etc. fails in these situations. How are the people who started retirement in 2020 managing? In cash, waiting or in skinflint mode? The clock keeps ticking. I retired in 2019. My lifestyle has not changed at all. But I started out with a dedicated cash AA for supplementing SS. I have current income from my taxable account being reinvested. I used Mr. Market to replenish cash in Jan 2020 and 2022. So I have not seen the worst yet
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Post by steelpony10 on Oct 11, 2022 15:44:47 GMT
Chahta , No doubt the 2 years cash or more works. You might get a little nervous after that. I wonder how the stay fully invested at all times crowd is doing. VWAHX and PIMIX/PONAX are already yielding more. VWAHX near 3%, PONAX just over 5%. Having any equity holdings that stop producing anything or going negative for an unknown period really bothers me. At least I can make something while I wait.
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Post by ECE Prof on Oct 11, 2022 19:08:26 GMT
The cash-flow index of UTG keeps dropping with a steeper slope, showing big cash-out of UTG. MACD slope is also deep due to big price drop - like a falling knife. Amazing change in the sentiment within a short period of time.
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