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Post by ElLobo on Jun 28, 2023 1:27:11 GMT
ElLobo ( Chuck ), I need help understanding your concerns about selling shares while disregarding the effect of distribution cuts on fund values. Using your portfolio allocations of 2-29-2020, we know MRRL paid its last dividend on 3/11/20, which was less than two weeks after you explained it was 30% of your investment portfolio constructed of four high-yield funds. Days later, the fund closed down with a 98% decrease in value since 2-29-20. The three other levered funds in your last posted portfolio suffered 50%,45%, and 35% losses over the same period. Note that these were the funds you did due diligence on, sold all your stocks, and constructed what you deemed a safe retirement portfolio with four leveraged funds based solely on past distributions. Time and time again, we have seen choosing investments with very high yields often ends poorly. There is much to learn from examining real-life portfolios vs. discussing generalities. Great to see you back posting again. Enjoy that Texas BBQ. I disagree, since I held that particular portfolio for less than a year, as I recall. But I agree with the general concept. Discuss specific portfolios using funds that have been around for 45 years. All VFINX and all VWEHX portfolios come immediately to mind.
Anyhow, I fully understand the risks of distribution cuts while withdrawing from a portfolio. That IS the greatest risk facing an Income Investor. But the greatest risk of TR focused retirees are negative returns, specifically, Sequence of Return Risk whenever discussed on retirement forums, and I believe negative returns are much more of a risk than distribution cuts.
I would propose that VWEHX poses the best example of the risks of distribution cuts from a fund AND a negative return, from an Income Investor point of view. VWEHX started life at $10/share, with $1/share/year distribution, a 10% junk bond yield, back in 1978. Today, its at $5.20/share and $0.286 yearly distribution, 5.5% yield. Long term capital losses of 1%/year, and a long term falling distribution.
Whenever you examine VWEHX over it's lifetime, you can see how 'withdraw less than the yield, reinvest what's left' actually tends to compensate for the cut in distribution, by buying more, not selling, shares, and how it also tends to compensate for the negative 1% capital loss per year over it's lifetime.
SO, I'm still speaking in generalities, but I am willing to discuss specific retirement withdrawal concepts, using VWEHX as the example.
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Post by bigseal on Jun 28, 2023 8:31:03 GMT
The only important factor is total return. Never understood why people make this so complicated. Really couldn’t be any simpler.
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Post by Fearchar on Jun 28, 2023 10:45:15 GMT
The only important factor is total return. Never understood why people make this so complicated. Really couldn’t be any simpler. Unfortunately, some people are very defensive and will rather argue than admit their error. It can happen to everyone depending on the situation. Still rather sad to see such situations being played out here. |
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Post by ElLobo on Jun 28, 2023 10:58:39 GMT
The only important factor is total return. Never understood why people make this so complicated. Really couldn’t be any simpler. Unfortunately, some people are very defensive and will rather argue than admit their error. It can happen to everyone depending on the situation. Still rather sad to see such situations being played out here. Interesting comments. The title of this thread is TR vs. Income investing (seed corn redux). Maybehaps some of you have never really thought about Income Investing!  |
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Deleted
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Post by Deleted on Jun 28, 2023 11:34:02 GMT
And what's so confusing about "personal" finance? If one of my goals is for my portfolio to produce income, how the hell can anyone say that's wrong? Since I've retired, I've experienced 3 bear markets, an entire decade where stocks lagged bonds, and another decade when bonds produce very little income. Are you really gonna tell me investing in dividend ETFs to help produce a steadier stream of income is ignorant?
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Post by chang on Jun 28, 2023 11:42:14 GMT
Welcome back, @django!
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Post by steelpony10 on Jun 28, 2023 12:15:23 GMT
ElLobo , El you may get yourself booted. Is that what you want? Most would probably agree there are merits and drawbacks to both investing methods. I myself and a few others agree to a point making income investing our primary focus in retirement. Since I believe our cash flow is secure now, which was a simple process, now I can concentrate on what I consider secondary income for sudden increases in income needs, the TR side. This would be primarily for assisted living/LTC. The purpose would be to delay spend down of our main source of income and income reserves. I personally know one family that went through 1mil in elder care expenditures and another 750k. Two additional families are in the same downward spiral. Although most may not make it that far I believe a large untouched cushion on reinvestment invested in equities over my remaining time may be my only solution at this point. I don’t think I can produce enough income to cover LTC and an outside spouses’ expenses just with income investments yet. I’ll take one last shot in the dark to get to that point.
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Post by ElLobo on Jun 28, 2023 12:38:17 GMT
ElLobo , El you may get yourself booted. Is that what you want? Most would probably agree there are merits and drawbacks to both investing methods. I myself and a few others agree to a point and have made income investing our primary focus in retirement. Since I believe our cash flow is secure, which was a simple process, now I can concentrate on what I consider secondary income for sudden increases in income needs, the TR side. This would be primarily for assisted living/LTC. The purpose would be to delay spend down of our main source of income and back up reserves for that. I personally know one family that went through 1 mil in elder care expenditures and another 750k. Two additional families are in the same downward spiral. Although most may not make it that far I believe a large untouched cushion on reinvestment invested in equities over time may be my only solution. I don’t think I can produce enough income to cover LTC and an outside spouses’ expenses just with income investments at the present time. It’s a shot in the dark in my opinion to get to that point. LOL! Chang chastised me a few days ago, for something that, back on M*, would be consider not much more than a tweek, but I digress. I was expecting THIS thread to so focus on the merits and drawbacks to both investing methods, but it hasn't turned out that way.
There will be no need for anyone to boot me.
I'm not interested in reliving the 20 years I spent on M*, especially with the same folk!
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Post by ElLobo on Jun 28, 2023 13:16:40 GMT
ElLobo , El you may get yourself booted. Is that what you want? Most would probably agree there are merits and drawbacks to both investing methods. I myself and a few others agree to a point making income investing our primary focus in retirement. Since I believe our cash flow is secure now, which was a simple process, now I can concentrate on what I consider secondary income for sudden increases in income needs, the TR side. This would be primarily for assisted living/LTC. The purpose would be to delay spend down of our main source of income and income reserves. I personally know one family that went through 1mil in elder care expenditures and another 750k. Two additional families are in the same downward spiral. Although most may not make it that far I believe a large untouched cushion on reinvestment invested in equities over my remaining time may be my only solution at this point. I don’t think I can produce enough income to cover LTC and an outside spouses’ expenses just with income investments yet. I’ll take one last shot in the dark to get to that point. I have a couple of observations.
First, although everyone strives/plans for a real, inflation adjusted rate of withdrawal during retirement, I would be surprised anyone, let alone the majority, of retirees follow such a strategy. That tactic is suggested by the IRS and RMDs, from a traditional IRA. However, just because a retiree is taking RMDs doesn't mean she spends 'em.
Then, Bill Bernstein has shown that, rather than taking a real inflation adjusted amount of cash out of your portfolio, which can lead to failure whenever the dreaded Sequence of Return Risk catches up with you, tiz much better to take a PERCENTAGE of the value of your portfolio out each year. In years where portfolio value is up, your spendable income is up. Values down, less spending cash. But the biggest advantage of taking a fixed percentage, rather than a fixed inflation adjusted amount, is that portfolio survivability is certain, due to Zeno. The question, then, is what percentage to choose. Bernstein suggested 5%-7%. See this article from 1999: www.efficientfrontier.com/ef/998/hell.htmI would finally suggest that, based upon my personal experience and that of several friends and relatives, your want/need for more spendable cash, early on in retirement, falls off dramatically the closer you get to kicking the bucket. After taking guided tour trips to Ireland and Australia/New Zealand/Fiji earlier on, and lots of off-road excursions to most of the individual states, my most favorite trip these days is making it to the bathroom whenever I get up in the morning, which costs me nothing! |
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Post by richardsok on Jun 28, 2023 13:28:03 GMT
Uh oh.
I hope wolf's viewpoint doesn't come to a problem. If so, it won't be the first time a poster with a determined outlook has run into hard feelings around here. His position has been explained and repeated -- and challenged -- very well. There is no obligation to always have a winner and a loser in these back-and-forths.
If we devolve into a protracted tug-of-war, W can't be faulted if he sturdily defends his thinking against challenges and objections that pop up one after another. I don't necessarily agree with the guy, but I welcome the vigorous perspective and experience he brings to the table. If a thread starts to out-live its usefulness, maybe you or I could refrain from adding just one MORE objection. If I find my day ruined b/c somebody else had the last word -- an obscure investing thread is probably the least of my problems.
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Post by chang on Jun 28, 2023 14:14:54 GMT
Uh oh. I hope wolf's viewpoint doesn't come to a problem. If so, it won't be the first time a poster with a determined outlook has run into hard feelings around here. His position has been explained and repeated -- and challenged -- very well. There is no obligation to always have a winner and a loser in these back-and-forths. If we devolve into a protracted tug-of-war, W can't be faulted if he sturdily defends his thinking against challenges and objections that pop up one after another. I don't necessarily agree with the guy, but I welcome the vigorous perspective and experience he brings to the table. If a thread starts to out-live its usefulness, maybe you or I could refrain from adding just one MORE objection. If I find my day ruined b/c somebody else had the last word -- an obscure investing thread is probably the least of my problems. As long as the back-and-forth stays ring fenced to this thread, I don't see a problem. (The only other "issue" we had was when a member got under everyone's skin on almost every thread.) And, of course, providing the discussion remains civil. Recall that threads can be blocked, if someone cares to. Personally, I thought I had put the discussion to rest with my terrifically incisive comment here, but apparently nobody thought my analysis was worth a sack of beans. Hmm, well, wouldn't be the first time. My advice, for what it's worth, is to say what you have to say, and move on. Nobody likes, or listens to, a record with the needle stuck in the groove. |
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bruce
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Post by bruce on Jun 28, 2023 14:37:37 GMT
Chuck,
Let me start by saying I love dividends, but I consider myself a TR investor. Selling shares has never concerned me. If I understand your reasoning behind being an income investor, selling shares is a slippery slope strategy. With this in mind, could you please explain how you managed your portfolio of levered high-yield investments? Your four-fund income portfolio consisting of MRRL, PFFL, PCI, and SDYL must have put you in a position to sell shares. Within days of posting your 2-29-2020 holdings, MRRL shares declined 95%, and days later, the operation shut down, locking in losses. The remaining funds slid 50%, 35%, and 45%, respectively. As a devoted income investor, how did you manage that portfolio during that stressful time? Thanks in advance for explaining how income investors manage income portfolios.
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Post by ElLobo on Jun 28, 2023 14:41:49 GMT
Chuck, Let me start by saying I love dividends, but I consider myself a TR investor. Selling shares has never concerned me. If I understand your reasoning behind being an income investor, selling shares is a slippery slope strategy. With this in mind, could you please explain how you managed your portfolio of levered high-yield investments? Your four-fund income portfolio consisting of MRRL, PFFL, PCI, and SDYL must have put you in a position to sell shares. Within days of posting your 2-29-2020 holdings, MRRL shares declined 95%, and days later, the operation shut down, locking in losses. The remaining funds slid 50%, 35%, and 45%, respectively. As a devoted income investor, how did you manage that portfolio during that stressful time? Thanks in advance for explaining how income investors manage income portfolios. Steelers, always. |
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Post by anovice on Jun 28, 2023 14:51:11 GMT
Chuck, Let me start by saying I love dividends, but I consider myself a TR investor. Selling shares has never concerned me. If I understand your reasoning behind being an income investor, selling shares is a slippery slope strategy. With this in mind, could you please explain how you managed your portfolio of levered high-yield investments? Your four-fund income portfolio consisting of MRRL, PFFL, PCI, and SDYL must have put you in a position to sell shares. Within days of posting your 2-29-2020 holdings, MRRL shares declined 95%, and days later, the operation shut down, locking in losses. The remaining funds slid 50%, 35%, and 45%, respectively. As a devoted income investor, how did you manage that portfolio during that stressful time? Thanks in advance for explaining how income investors manage income portfolios. Steelers, always. Yup. And a cinnamon roll at Oram's. |
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Post by steadyeddy on Jun 28, 2023 14:51:45 GMT
Firmly stating views/positions/approaches on investing without insulting/insinuating/finding faults with people is absolutely fine. It is premature to talk about booting folks out.
This forum continues to thrive mainly because folks have been there, seen that (nonsense) in other forums and (for the most part) understand the bounds.
Rodney King: "Can we get along?"
I have immense respect for folks that post here - and learn from each of you. Let us keep it going.
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Post by ElLobo on Jun 28, 2023 15:05:10 GMT
Uh oh. I hope wolf's viewpoint doesn't come to a problem. If so, it won't be the first time a poster with a determined outlook has run into hard feelings around here. His position has been explained and repeated -- and challenged -- very well. There is no obligation to always have a winner and a loser in these back-and-forths. If we devolve into a protracted tug-of-war, W can't be faulted if he sturdily defends his thinking against challenges and objections that pop up one after another. I don't necessarily agree with the guy, but I welcome the vigorous perspective and experience he brings to the table. If a thread starts to out-live its usefulness, maybe you or I could refrain from adding just one MORE objection. If I find my day ruined b/c somebody else had the last word -- an obscure investing thread is probably the least of my problems. As long as the back-and-forth stays ring fenced to this thread, I don't see a problem. (The only other "issue" we had was when a member got under everyone's skin on almost every thread.) And, of course, providing the discussion remains civil. Recall that threads can be blocked, if someone cares to. Personally, I thought I had put the discussion to rest with my terrifically incisive comment here, but apparently nobody thought my analysis was worth a sack of beans. Hmm, well, wouldn't be the first time. My advice, for what it's worth, is to say what you have to say, and move on. Nobody likes, or listens to, a record with the needle stuck in the groove. Although terrifically incisive, your comment, from last Saturday, really didn't put anything to rest. Here is what you said: "There no longer exists such a thing as "income and dividend investing". I would point out that, your reason for stating this is that you proposed that, rather than taking distributions, in cash, spending some, reinvesting the rest, you simply reinvest all distributions, then sell shares whenever making a withdrawal. I didn't see the need to obviously point out that, whenever you do this, you will buy shares, X, with the distributions, while selling Y shares, come time of the withdrawal. For an Income Investor, X will, generally (depends on NAV behavior) be greater than Y while, for a TR investor, Y will be greater than X (you sell more shares, at the time of withdrawal, than you bought, at the time you received the distribution. In simple terms, the distinction between Income Investing and TR Investing, during retirement, still exists! ) |
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Post by ElLobo on Jun 28, 2023 15:11:53 GMT
Yup. And a cinnamon roll at Oram's. Unfortunately, not since Nov. 7, 2020, the Saturday after the 2020 elections, whenever I moved from Beaver Falls to Texas. |
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Post by archer on Jun 28, 2023 21:23:12 GMT
Welcome back El Lobo! I hope everyone is happy with their investing strategy and meeting their objectives. Just because mine is best doesn't mean anyone else's is wrong.  |
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Post by steadyeddy on Jun 28, 2023 22:24:34 GMT
Welcome back El Lobo! I hope everyone is happy with their investing strategy and meeting their objectives. Just because mine is best doesn't mean anyone else's is wrong. Very articulate response to the this or that mindset. |
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bruce
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Post by bruce on Jun 29, 2023 1:55:41 GMT
Chuck, Let me start by saying I love dividends, but I consider myself a TR investor. Selling shares has never concerned me. If I understand your reasoning behind being an income investor, selling shares is a slippery slope strategy. With this in mind, could you please explain how you managed your portfolio of levered high-yield investments? Your four-fund income portfolio consisting of MRRL, PFFL, PCI, and SDYL must have put you in a position to sell shares. Within days of posting your 2-29-2020 holdings, MRRL shares declined 95%, and days later, the operation shut down, locking in losses. The remaining funds slid 50%, 35%, and 45%, respectively. As a devoted income investor, how did you manage that portfolio during that stressful time? Thanks in advance for explaining how income investors manage income portfolios. Steelers, always. Chuck, The hallmark of good investment forums is honest, respectful, and transparent discussions that share opinions, provide information or answer questions. As a distinguished income investor, others consider how you construct and manage an income portfolio. Posting your income-based portfolio, detailing the funds and allocations, then refusing to explain how you handled it during a market decline is disappointing but entirely your choice. I assume that the two forced liquidations of MRRL and SDYL, in addition to previous liquidations have you reconsidering using leveraged investments for your high-yield allocations in the future? Bruce
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Post by ElLobo on Jun 29, 2023 7:21:11 GMT
Chuck, The hallmark of good investment forums is honest, respectful, and transparent discussions that share opinions, provide information or answer questions. As a distinguished income investor, others consider how you construct and manage an income portfolio. Posting your income-based portfolio, detailing the funds and allocations, then refusing to explain how you handled it during a market decline is disappointing but entirely your choice. I assume that the two forced liquidations of MRRL and SDYL, in addition to previous liquidations have you reconsidering using leveraged investments for your high-yield allocations in the future? Bruce
LOL. Nice try.
I'll discuss this thread topic, which is TR versus Income Investing. I've defined Income Investing, nobody has defined TR investing. I won't discuss my portfolio performance over the 20 years of my retirement. Suffice it to say, I'm alive and well.
So, I define an Income Investor as a retiree who withdraws and spends less cash than what his portfolio produces as distribution yield. I define a TR investor as a retiree who withdraws and spends more than what his portfolio produces as distribution yield.
How do YOU defined Income versus TR investing, the topic of this thread?
BTW, my current portfolio is 100% VWEHX.
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Post by anovice on Jun 29, 2023 10:49:51 GMT
Chuck, The hallmark of good investment forums is honest, respectful, and transparent discussions that share opinions, provide information or answer questions. As a distinguished income investor, others consider how you construct and manage an income portfolio. Posting your income-based portfolio, detailing the funds and allocations, then refusing to explain how you handled it during a market decline is disappointing but entirely your choice. I assume that the two forced liquidations of MRRL and SDYL, in addition to previous liquidations have you reconsidering using leveraged investments for your high-yield allocations in the future? Bruce
LOL. Nice try.
I'll discuss this thread topic, which is TR versus Income Investing. I've defined Income Investing, nobody has defined TR investing. I won't discuss my portfolio performance over the 20 years of my retirement. Suffice it to say, I'm alive and well.
So, I define an Income Investor as a retiree who withdraws and spends less cash than what his portfolio produces as distribution yield. I define a TR investor as a retiree who withdraws and spends more than what his portfolio produces as distribution yield.
How do YOU defined Income versus TR investing, the topic of this thread?
BTW, my current portfolio is 100% VWEHX.
Chuck: I won't discuss my portfolio performance over the 20 years of my retirement. Looks like this thread will come to a disappointing end. |
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Post by steelpony10 on Jun 29, 2023 11:16:02 GMT
TR investors depend on “growth” of principle to make up for the number of shares (and yield) they withdrew this year. Three of ten market years are flat or down with no indication of when. A number of spend down investors have fled to cash trying to time the market, a proven poor investing technique that makes down years much worse. Many just cut back spending for an unknown period in for most is a 15-20 year retirement and on and on.
Income investors, depending on consistent cash flow, also may give up some capital gains at times during the other 7 years but they don’t have to contend with much of the above. But an alternate plan exists using VTI or VOO. So 45/45/10 and you’re done. TR/Income/cash
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Post by mnfish on Jun 29, 2023 11:54:51 GMT
TR investors depend on “growth” of principle to make up for the number of shares (and yield) they withdrew this year. Three of ten market years are flat or down with no indication of when. A number of spend down investors have fled to cash trying to time the market, a proven poor investing technique that makes down years much worse. Many just cut back spending for an unknown period in for most is a 15-20 year retirement and on and on. Income investors, depending on consistent cash flow, also may give up some capital gains at times during the other 7 years but they don’t have to contend with much of the above. But an alternate plan exists using VTI or VOO. So 45/45/10 and you’re done. TR/Income/cash Some are taking some profits and putting it into MM funds that are paying a risk free 5%. |
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bruce
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Post by bruce on Jun 29, 2023 13:24:31 GMT
As the OP, this is how you started the thread with a quote from FD;
"El Lobo went big into MLP. Then he doubled up investing in 200% MLP such as MRRL+SDYL. In march 2020, MRRL+SDYL liquidated, gone, lost everything, others such as AMZA, a typical generic MLP lost 80+%. El Lobo stopped posting."
If you do not feel like discussing the products YOU posted about, used, and started the thread with, that is fine with me, and I will not ask you about them again.
Peace out
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Post by ElLobo on Jun 29, 2023 17:56:32 GMT
As the OP, this is how you started the thread with a quote from FD; "El Lobo went big into MLP. Then he doubled up investing in 200% MLP such as MRRL+SDYL. In march 2020, MRRL+SDYL liquidated, gone, lost everything, others such as AMZA, a typical generic MLP lost 80+%. El Lobo stopped posting." If you do not feel like discussing the products YOU posted about, used, and started the thread with, that is fine with me, and I will not ask you about them again. Peace out Um, the thread moderator, Chang, started this thread,not I, by moving my response to FD1000, who posted something in another thread. POSTS MOVED FROM ANOTHER THREAD
FD was apparently fascinated by my choice of 2X leveraged ETNs back then. So fascinated that, in another related thread, he has kept track of that portfolio, from back then, regardless of the fact that I didn't hold it very long. A fascination you seem to share. FD then ended his/her remarks by stating, "BTW, I really tried to help the guy." SO, here was my response to FD. Ifn you, or anyone else, wants to discuss this stuff, keep this thread active: "LOL! You knew about as much about TR investing as anyone around those forums, but you knew nothing about yield focused investing and investing during retirement. The M* forums started about the time I was thinking about retirement and a 'safe rate of retirement withdrawal.' Back then, the early guru of investing and retirement withdrawals was Dr. Bill Bernstein, who had a website, called The Efficient Frontier (http://www.efficientfrontier.com/). It is still active, but not nearly as much as back then. Anyhow, Dr. Bill practiced on the southern Oregon coast, in Coos Bay. I had the pleasure of visiting him, twice, where we very briefly discussed the concept of taking a 4% rate of withdrawal from a portfolio that yielded 5%, i.e., VWEHX! He hadn't thought about it and, at that time, he was into the subject of depleting a retirement portfolio by sticking to a fixed, real inflation adjusted rate of withdrawal, come hell or high water. At any rate, those types of discussions were commonplace, on M*, back in its early days. I don't know if they still have those discussions, either on M* or here?The infamous 'seed corn' thread was a direct result. Seed corn is the very basic definition of yield focused investing. Plant a corn field that yields 5%, withdraw and spend 4%, then 1% seed corn is planted for NEXT years crop!Anyhow, I never needed your help on anything. After all, you knew nothing about yield focused investing, otherwise known as Dividend and Income Investing and apparently haven't increased your knowledge over the last few years! |
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Post by steadyeddy on Jun 29, 2023 18:36:06 GMT
ElLobo, what would your advice be for someone that wants to invest $500K into an income investing portfolio to draw monthly income? All disclaimers apply such as "this is not financial advice and is solely meant for educational purposes," etc etc Thanks.
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Post by ElLobo on Jun 29, 2023 19:37:01 GMT
ElLobo , what would your advice be for someone that wants to invest $500K into an income investing portfolio to draw monthly income? All disclaimers apply such as "this is not financial advice and is solely meant for educational purposes," etc etc Thanks. Gosh. Define the universe. Give three examples!
I would use SDY, the ETF that substantially tracks the highest yielding stocks in the S&P1500 which have paid an ever increasing dividend for at least the last 20 years. It currently yields 2.67%, compared to SPY, the SP500 index ETF, yielding 1.55%. You pick up an extra 1.12% yield, and also get a focus on stocks that have consistently raised their dividends over the last 20 years.
For bonds, I would use VWEHX, currently yielding 5.5%. The bond market index fund, VBMFX, is intermediate term, investment grade debt and yields 2.65%. The long term investment grade bond fund, VBLTX, yields 3.31%. VWEHX is below investment grade quality, short to intermediate term.
Using these two funds, your total portfolio yield will be between 2.67% (all stock, SDY) and 5.5% (all bonds, VWEHX). At a 50/50 allocation, the distribution yield of your portfolio is 4.085%, fairly close to the magical 4%!
(You didn't state your rate of withdrawal or whether it was real inflation adjusted or not.)
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Post by steadyeddy on Jun 29, 2023 19:51:47 GMT
ElLobo , what would your advice be for someone that wants to invest $500K into an income investing portfolio to draw monthly income? All disclaimers apply such as "this is not financial advice and is solely meant for educational purposes," etc etc Thanks. Gosh. Define the universe. Give three examples!
I would use SDY, the ETF that substantially tracks the highest yielding stocks in the S&P1500 which have paid an ever increasing dividend for at least the last 20 years. It currently yields 2.67%, compared to SPY, the SP500 index ETF, yielding 1.55%. You pick up an extra 1.12% yield, and also get a focus on stocks that have consistently raised their dividends over the last 20 years.
For bonds, I would use VWEHX, currently yielding 5.5%. The bond market index fund, VBMFX, is intermediate term, investment grade debt and yields 2.65%. The long term investment grade bond fund, VBLTX, yields 3.31%. VWEHX is below investment grade quality, short to intermediate term.
Using these two funds, your total portfolio yield will be between 2.67% (all stock, SDY) and 5.5% (all bonds, VWEHX). At a 50/50 allocation, the distribution yield of your portfolio is 4.085%, fairly close to the magical 4%!
(You didn't state your rate of withdrawal or whether it was real inflation adjusted or not.)
, thanks for a quick response. VBMFX now absorbed by VBTLX and shows 4.31% 30-day SEC yield so much higher than the 2.65% primarily because the bonds got a nice haircut last year. I think you are also implying a 50/50 stock/bond portfolio? I am a year or two from retirement, thus the question - I would probably target a 4% withdrawal rate. |
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bruce
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Post by bruce on Jun 29, 2023 20:16:17 GMT
Chuck,
Please accept my sincere apology. Despite who created this thread, I'm used to the first post in a thread being the topic. The first two posts in the thread appeared to be about your last M* posted portfolio, including MRRL and SDYL. Again, I'm new here, and I once again apologize for any misunderstanding about the topic.
IMHO, any income investor who came across your income-oriented retirement program using four levered products would be "fascinated" with its result, not just FD and myself.
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