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Explorer ○○○

"DOWN" days show us what is working well

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 Looking at our securities in our portfolio on down days sometimes gives us time to wonder if certain securities don't belong there. How many [% wise of portfolio] do we believe should have been non-starters?? ....

 In my case [as a dividend oriented investor], looks like 15% [but the jury is still out....

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Re: "DOWN" days show us what is working well

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@Sheryldell wrote:

@steelpony10 

I believe you said in another thread that you have sold several of your stocks, long term large cap top growth holdings , leaving you with 7. I was wondering why and where you put the proceeds. (I assume in your three parts of munis, growth (including VUG) or CEFs.)

Also you mentioned in the future moving to.VOO (S&P 500) and cash as your "eventual final target in five years". Please expound on your future target plan and why not move to it now. I am contemplating paring back my holdings and consolidating. I actually was on that track until the Covid crash. Is there a reason to wait?  Tax consequences might be one for me.


                 sheryldell - well nothing is in stone. In about five years we plan to make one more move from this location to within 1 hour or less to three of our children and place our handicapped child in a group home probably nearest to our daughter. After all the t’s are crossed and i’s are dotted, trust is updated, funeral trust fully funded, new location brought up to snuff etc. then I’ll do that for my wife and kids. So that process is further down the line somewhat because like others no one expected a market halt of unknown length. You always have to be flexible and nimble when dealing with markets.

                  Right now in this situation I’am putting on probably the last aggressive push. VUG/VYM = VOO pretty much but the 8 stocks tip the balance towards growth. Any future or past capital gains went to VUG, more safety and I gave up some future cap gains. I may replace VUG with TRBCX because it fits better with VYM when I used portfolio xray and is a little more aggressive and diversified it seems. The muni on reinvestment with 1k added per month currently is basically a LTC fund. The CEF’s still provide excess to needs income but I lost some income to dividend cuts maybe $100/mo. Eventually I’ll cut back the excess to needs income to about 10-20% over maybe and add the proceeds to PIMIX/PONAX.

                    Basically giving up income by eliminating some risk slowly when Mr. Market gives me an opportunity. I won’t do that in a down market losing gains and income by simplifying. I prefer to take gains while I simplify in an up market before I run out of wiggle room. That’s why the long time frame.

                                  

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Re: "DOWN" days show us what is working well

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I like to keep things simple. The biggest high tech companies rule the world.  The 2 biggest ones in the SP500 are AAPL+MSFT.

YTD chart says it all and I never did and never will look at ONLY high yielder.

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Re: "DOWN" days show us what is working well

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Income investors are not what you make them out to be [no offense intended]. Many of us analyze "undervalued" securities for "both" current dividend, distributions, and CapGains [going forward]. This methodology has worked well for many years now....

 We all have different analytical skills in what we want to achieve in the market. With dividends involved in a security that we buy, the MktPrc does not collapse in down markets like so may others without the dividend component. Many of us view the Mkt correction problems differently....

 We may have to work harder in the analysis process [by not investing into the big names], but the final result is reassures the direction we have taken [with volatile markets like currently]....

 One single opinion of the many I am sure....

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Re: "DOWN" days show us what is working well

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@xray wrote:

Income investors are not what you make them out to be [no offense intended]. Many of us analyze "undervalued" securities for "both" current dividend, distributions, and CapGains [going forward]. This methodology has worked well for many years now....

 We all have different analytical skills in what we want to achieve in the market. With dividends involved in a security that we buy, the MktPrc does not collapse in down markets like so may others without the dividend component. Many of us view the Mkt correction problems differently....

 We may have to work harder in the analysis process [by not investing into the big names], but the final result is reassures the direction we have taken [with volatile markets like currently]....

 One single opinion of the many I am sure....


         We exited that type of investing in the late 80’s basically splitting  our portfolio in half. Had to learn investing for capital gains only or reliable dividends only. My perceived flaw dealing with two retirement portfolios at the time was if you own dividend paying stocks you’ll never get gains as big as growth stocks or you have to give up the dividend to get at the gain. 
 
          Our way around this dealing with Depression Era parents and in laws was to have safe money, dividend stocks on reinvestment like JNJ and KO and utility stock yield to live on. That worked pretty well for 25 years then I rearranged everything to CEF’s and a muni fund basically half each. We’ve adapted this method ourselves adding three parts again, muni, growth and income (CEF’s). With over 40 years of experience we learned the same market patterns exist over and over but timing is the unknown. We have 3 places to invest in all the time as extra cash to needs accumulates.

           Answering your question though and not knowing your individual parameters as to what constitutes a bad decision I found impatience and tinkering losing the chance to pick up cheap partial shares to compound for years in some cases the biggest impediment to sound investing. We had those two stocks listed above, on reinvestment for over 30 years. Those two alone produced probably over 20k in dividends in the end. As long as a “group” of dividend stocks raise their dividends from say 3-5% a year on average that should be above your personal inflation rate. Reaching for yield, buying down trodden stocks like GE, or merging companies just stops or slows the process.

            In your case all you have to do is check something like VYM and cherry pick 10- 20 top value companies and your done. Let them do the research. If your present holdings aren’t mostly in their top 20 you may be costing yourself long term gains. It’s basically just a glorified savings account. Ever switch banks for .25% more interest?✌️

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Re: "DOWN" days show us what is working well

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It's comforting to watch how our stocks and bonds complement each other. The stocks drag the bonds up. The bonds cushion the stocks down. I wish we had higher base USD interest rates (sigh).

Normally I don't check our portfolio. I don't like to watch the yo-yo. Looking at it makes me want to tinker with our FI allocation which NEVER satisfies me. It's kale. I hate kale. But my girls say that we NEED kale. So it's always there. Annoying me. Ideally I want to only look at our port once per year. On rebalance day.

But 2020 has been a crazy year. Very strange bear market combined with Covid-19 chaos. USA and China competing hard to win the scariest big country competition. So I broke our big rule against market timing. Second time since Jan 2006. We "bought the bear" and over rebalanced equities on March 31.  We did it once before. In Jan 2009 we "bought the bear" for our first time.  

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Re: "DOWN" days show us what is working well

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 A few more down days this week [also end of Qtr profits being taken with capGains] will make this conversation more interesting....

 Taking CapGains on a few securities in my portfolio....

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Re: "DOWN" days show us what is working well

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Or you recognize that Schwab does all that hard work practically for free. So why not buy and hold 100% SCHD for all your equity needs.

https://www.morningstar.com/etfs/arcx/schd/quote

If I were an USA income investor my retirement port would be 95% SCHD + 5% CASH. Only spend the dividend income. Never sell shares.

You could TRY to beat it on your own. But why bother?


@xray wrote:

Income investors are not what you make them out to be [no offense intended]. Many of us analyze "undervalued" securities for "both" current dividend, distributions, and CapGains [going forward]. This methodology has worked well for many years now....

 We all have different analytical skills in what we want to achieve in the market. With dividends involved in a security that we buy, the MktPrc does not collapse in down markets like so may others without the dividend component. Many of us view the Mkt correction problems differently....

 We may have to work harder in the analysis process [by not investing into the big names], but the final result is reassures the direction we have taken [with volatile markets like currently]....

 One single opinion of the many I am sure....


 

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Re: "DOWN" days show us what is working well

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@steelpony10 

I believe you said in another thread that you have sold several of your stocks, long term large cap top growth holdings , leaving you with 7. I was wondering why and where you put the proceeds. (I assume in your three parts of munis, growth (including VUG) or CEFs.)

Also you mentioned in the future moving to.VOO (S&P 500) and cash as your "eventual final target in five years". Please expound on your future target plan and why not move to it now. I am contemplating paring back my holdings and consolidating. I actually was on that track until the Covid crash. Is there a reason to wait?  Tax consequences might be one for me.

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Re: "DOWN" days show us what is working well

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@xray wrote:

 Looking at our securities in our portfolio on down days sometimes gives us time to wonder if certain securities don't belong there. How many [% wise of portfolio] do we believe should have been non-starters?? ....

 In my case [as a dividend oriented investor], looks like 15% [but the jury is still out....


A third wrinkle - MBS, ABS, and to some extent Bank Loans. Securities which are a bundle of loans. Think of an excel spreadsheet with a long list in it. There’s probably a time lag factor in pricing these.

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Re: "DOWN" days show us what is working well

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@Sheryldell wrote:

@steelpony10 

I believe you said in another thread that you have sold several of your stocks, long term large cap top growth holdings , leaving you with 7. I was wondering why and where you put the proceeds. (I assume in your three parts of munis, growth (including VUG) or CEFs.)

Also you mentioned in the future moving to.VOO (S&P 500) and cash as your "eventual final target in five years". Please expound on your future target plan and why not move to it now. I am contemplating paring back my holdings and consolidating. I actually was on that track until the Covid crash. Is there a reason to wait?  Tax consequences might be one for me.


                 sheryldell - well nothing is in stone. In about five years we plan to make one more move from this location to within 1 hour or less to three of our children and place our handicapped child in a group home probably nearest to our daughter. After all the t’s are crossed and i’s are dotted, trust is updated, funeral trust fully funded, new location brought up to snuff etc. then I’ll do that for my wife and kids. So that process is further down the line somewhat because like others no one expected a market halt of unknown length. You always have to be flexible and nimble when dealing with markets.

                  Right now in this situation I’am putting on probably the last aggressive push. VUG/VYM = VOO pretty much but the 8 stocks tip the balance towards growth. Any future or past capital gains went to VUG, more safety and I gave up some future cap gains. I may replace VUG with TRBCX because it fits better with VYM when I used portfolio xray and is a little more aggressive and diversified it seems. The muni on reinvestment with 1k added per month currently is basically a LTC fund. The CEF’s still provide excess to needs income but I lost some income to dividend cuts maybe $100/mo. Eventually I’ll cut back the excess to needs income to about 10-20% over maybe and add the proceeds to PIMIX/PONAX.

                    Basically giving up income by eliminating some risk slowly when Mr. Market gives me an opportunity. I won’t do that in a down market losing gains and income by simplifying. I prefer to take gains while I simplify in an up market before I run out of wiggle room. That’s why the long time frame.

                                  

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