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steelpony10
Participant ○○

AND THE ANSWER IS............

      Seeing that the engineers, IT, accountants and apparent shut ins are engaged in another feeding frenzy I moved over to this side of the jungle with the less aggressive folks:

      Past studies, recent history, and markets in general are unpredictable in the short term but in the long term well run companies should beat the rate of inflation because management is out to make a profit not to break even. This can and should produce capital gains plus dividends which are  partially dependent on the greater fool theory but mostly come from revenue and earnings increases over time. This is not in lockstep. There will be pauses in all three influences.

       None of this stuff necessarily pertains to your personal needs. If you have realistic expectations and lifestyle it’s relatively easy to cover your basic needs. Quality add ons are up to the individual but they have limits also. 

         So my personal experience and opinion considering the unknown nature of what an investor is dealing with the TR approach is the best option for any investor to try to make their personal requirements under most market conditions. In plain language a variety of possible income sources that match your skill and risk parameters. The more you learn and risk the more you can make under more market conditions.

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9 Replies
Mozart622
Explorer ○○

Re: AND THE ANSWER IS............

What is "the TR approach"?  All investing gets a TR either positive or negative.  I don't see how it is possible to not have a TR approach.

Over the years, self described income investors have characterized those who sell always shares for withdrawals as TR investors, yet a TR investor is much more likely to have some blend of income producers and less income producers, particularly those who use OEFs.

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sugarhill6
Explorer ○○

Re: AND THE ANSWER IS............

Total Return means to me that any interest, any capital gains, any dividends, and any distributions will be accounted for when measuring the performance of my investment.    It doesn't mean that an investment must check all of these boxes...or that my portfolio must check all of these boxes.   It's all about measuring my performance.  

Some investors put more importance on the "steady, consistent, and growing" cash they get from investments (dividends/distributions/interest) versus the unrealized/realized capital gains they would get.   With that in mind, if AT&T stock is going to drop 10% over the next 10 years....and underperform the S&P500 by 1,000 basis points.....who cares....as the purpose of the investment was to pay bills with the "steady, consistent, and growing" cash dividends......not double the investment.      

In the end, everyone's investment strategy is there own.   Growth was important to me 20 years ago.   With 5-10 years to potentially retire, and having a hard portfolio value in mind, consistent income over the next 10 years has started to trump growth goals.   

What is the better investment over a given time horizon.....the one that allows you to achieve your goals.  

 

 

 

 

 


@Mozart622 wrote:

What is "the TR approach"?  All investing gets a TR either positive or negative.  I don't see how it is possible to not have a TR approach.

Over the years, self described income investors have characterized those who sell always shares for withdrawals as TR investors, yet a TR investor is much more likely to have some blend of income producers and less income producers, particularly those who use OEFs.


 

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steelpony10
Participant ○○

Re: AND THE ANSWER IS............

       Mozart622 - using myself as an example, owning a CEF for income to pay the bills with little expectations of any growth and owning AMZN harvesting cap gains when offered and reinvesting on significant dips which hopefully compounds future cap gains. Another example would be cross investing any gains for more income or trying for more cap gains. Whatever offers the best opportunity at the time.

        Right now the market seems to be in neutral for the time being so any income gains from either source are placed in a muni or junk bond fund on reinvestment for possible investment elsewhere at a later date. Forty years like that can compound to a great deal of money.

         Sugarhill6 is of course correct.

         Capital -  Lol. It’s just risk and reward. Greater generally leads to greater and real buying opportunities are infrequent although the D provides much more then average. If mutual funds do it for you so be it. 

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ElLobo
Participant ○○○

Re: AND THE ANSWER IS............


@sugarhill6 wrote:

Total Return means to me that any interest, any capital gains, any dividends, and any distributions will be accounted for when measuring the performance of my investment.    It doesn't mean that an investment must check all of these boxes...or that my portfolio must check all of these boxes.   It's all about measuring my performance.  

Some investors put more importance on the "steady, consistent, and growing" cash they get from investments (dividends/distributions/interest) versus the unrealized/realized capital gains they would get.   With that in mind, if AT&T stock is going to drop 10% over the next 10 years....and underperform the S&P500 by 1,000 basis points.....who cares....as the purpose of the investment was to pay bills with the "steady, consistent, and growing" cash dividends......not double the investment.      

In the end, everyone's investment strategy is there own.   Growth was important to me 20 years ago.   With 5-10 years to potentially retire, and having a hard portfolio value in mind, consistent income over the next 10 years has started to trump growth goals.   

What is the better investment over a given time horizon.....the one that allows you to achieve your goals.  

 

 

 

 

 


@Mozart622 wrote:

What is "the TR approach"?  All investing gets a TR either positive or negative.  I don't see how it is possible to not have a TR approach.

Over the years, self described income investors have characterized those who sell always shares for withdrawals as TR investors, yet a TR investor is much more likely to have some blend of income producers and less income producers, particularly those who use OEFs.


 



To me, an income focused retiree constructs her portfolio in such a way that the yearly dividend/interest/distribution cash flow of her portfolio exceeds the amount of cash she wants/needs to withdraw and spend.  Any and all other retirees, with a portfolio where that cash flow is less than required for withdrawal, is a TR focused retiree, for want of a better term.

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steelpony10
Participant ○○

Re: AND THE ANSWER IS............

        El - a better term is BP (bad plan) investor. The big categories above this constant argument (TR vs I) is Cash Flow Investor (CF) or Spend Down Investor (SD).

        CF has two viable directions TR and I which may both work since we’re gaming a random event with random unknown personal needs probably starting with a larger portfolio which allows more flexibility and more options to adapt.

         SD investors may mostly depend on TR which may or may not cover a random event or their random needs. They usually can’t and shouldn’t take on the added risk and probably depend on diversification, allocation and mutual funds to a greater extent to provide safety.

          Some of us think using both TR and I provides more viable options to control these two unknowns then just TR or I investing used alone since both methods seem to have drawbacks.

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Gary1952
Contributor ○○○

Re: AND THE ANSWER IS............

Huh? The market is in neutral? SPY makes new high; 1 week = .43, 1 month = 3.90, 3 month = 10.52, YTD = 27.14%


@steelpony10 wrote:

       Mozart622 - using myself as an example, owning a CEF for income to pay the bills with little expectations of any growth and owning AMZN harvesting cap gains when offered and reinvesting on significant dips which hopefully compounds future cap gains. Another example would be cross investing any gains for more income or trying for more cap gains. Whatever offers the best opportunity at the time.

        Right now the market seems to be in neutral for the time being so any income gains from either source are placed in a muni or junk bond fund on reinvestment for possible investment elsewhere at a later date. Forty years like that can compound to a great deal of money.

         Sugarhill6 is of course correct.

         Capital -  Lol. It’s just risk and reward. Greater generally leads to greater and real buying opportunities are infrequent although the D provides much more then average. If mutual funds do it for you so be it. 


 

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Mozart622
Explorer ○○

Re: AND THE ANSWER IS............


@steelpony10 wrote:

        El - a better term is BP (bad plan) investor. The big categories above this constant argument (TR vs I) is Cash Flow Investor (CF) or Spend Down Investor (SD).

        CF has two viable directions TR and I which may both work since we’re gaming a random event with random unknown personal needs probably starting with a larger portfolio which allows more flexibility and more options to adapt.

         SD investors may mostly depend on TR which may or may not cover a random event or their random needs. They usually can’t and shouldn’t take on the added risk and probably depend on diversification, allocation and mutual funds to a greater extent to provide safety.

          Some of us think using both TR and I provides more viable options to control these two unknowns then just TR or I investing used alone since both methods seem to have drawbacks.


I'm not sure spend down (SD) investors is a good term.  I've been retired for 13 years and have more than I started with even adjusting for inflation so I haven't spent down and I'm pretty conservative.

Point I was making on the other thread is that it is unusual to have a portfolio that doesn't at least produce 2% income for a "TR" investor, so at 4% withdrawal, half is income.

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Intruder
Participant ○○○

Re: AND THE ANSWER IS............


@Gary1952 wrote:

Huh? The market is in neutral? SPY makes new high; 1 week = .43, 1 month = 3.90, 3 month = 10.52, YTD = 27.14%


@steelpony10 wrote:

       Mozart622 - using myself as an example, owning a CEF for income to pay the bills with little expectations of any growth and owning AMZN harvesting cap gains when offered and reinvesting on significant dips which hopefully compounds future cap gains. Another example would be cross investing any gains for more income or trying for more cap gains. Whatever offers the best opportunity at the time.

        Right now the market seems to be in neutral for the time being so any income gains from either source are placed in a muni or junk bond fund on reinvestment for possible investment elsewhere at a later date. Forty years like that can compound to a great deal of money.

         Sugarhill6 is of course correct.

         Capital -  Lol. It’s just risk and reward. Greater generally leads to greater and real buying opportunities are infrequent although the D provides much more then average. If mutual funds do it for you so be it. 


 


Gary:

there are many posters who are totally clueless about market direction. Analysts estimates are for 6% increase in earnings in 2020. No recession. Analysts are also predicting global economic growth in 2020.

This is why I am limiting my responses to ignore posters who can’t read the financial reports.

steelpony10
Participant ○○

Re: AND THE ANSWER IS............

       Ha. Ha. Neutral to me means a period of slowing of significant long term gains. Reliance on financial gypsies and ghosts of the past seem to be veiled attempts at market timing an unknown and not necessarily significant or meaningful to everyone’s personal situation.

        Instead of the endless debate, attempts to demean and name calling over how to handle an unknown the best solution seems to be creating as many diverse income streams as possible to maybe have a better chance of taking advantage of future unknown market conditions. TR seems the most attractive tact to take because it offers more choices, capital gains, income and compounding to keep driving portfolio values forward in more types of markets with a less initial portfolio value to start.

        

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