Money and Finance
With today's low interest rates a lot of income seeking investors have switched to DGI. I would like to think that many would be converted to stick with DGI because it offers much more protection in your purchasing power than bonds do. The ultimate goal of investing is to wind up with more purchasing power than you started with at some point in the future. I believe that bond investors will end up severely behind the ball especially with the current low interest rates that treasuries are offering. The 10 year treasury yield is currently 1.63%. We'll assume that the dividend yield is 2.50%although you can get a much better yield from stable companies like KO, JNJ and PG. We'll also assume that the dividends are increased annually at 7.0% and that dividends are not reinvested. Inflation will be taken as 3.00% and $10,000 will be invested in both.
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- A Few Good Reasons To Hoard Some Cash Now - By Jason Zweig
The stock market is near record highs. More money came into U.S. stock mutual funds the week of Oct. 23 than during any other week since 2007. Initial public offerings like Twitter are booming. So have you considered keeping more of your assets in cash?...
- Fight The Fed Model: The Relationship Between Stock Market Yields, Bond Market Yields, And Future Returns - By Cliff Asness (december 2002)
Abstract: The "Fed Model" has become a very popular yardstick for judging whether the U.S. stock market is fairly valued. The Fed Model compares the stock market's earnings yield (E/P) to the yield on long-term government bonds. In contrast, traditional...
- Do Stocks Provide A Sufficient Hedge Against Inflation?
A great article from Ben at The Inoculated Investor blog. Large Excerpt: So, with all of the issues with gold, I guess that leaves ownership stakes in businesses as the best inflation hedge, right? Bruce Greenwald thinks so: “The assets that are most...
- Income Update - March 2012
I've added a new line on my chart in "Your Money or Your Life" fashion. I'm calling it my FI for financial independence. The way I'll be calculating it is if I take my net worth less the value in my 401k and Rollover IRA since there's...
- An Important Misunderstanding About Dividends
My interest in dividends began during a previous job in which I helped manage the portfolios of ultra-high net worth individuals. In many cases, the account owners had bought their stocks decades earlier, never touched them, reinvested their dividends,...
Money and Finance
Why I prefer DG Stocks to Bonds
With today's low interest rates a lot of income seeking investors have switched to DGI. I would like to think that many would be converted to stick with DGI because it offers much more protection in your purchasing power than bonds do. The ultimate goal of investing is to wind up with more purchasing power than you started with at some point in the future. I believe that bond investors will end up severely behind the ball especially with the current low interest rates that treasuries are offering. The 10 year treasury yield is currently 1.63%. We'll assume that the dividend yield is 2.50%although you can get a much better yield from stable companies like KO, JNJ and PG. We'll also assume that the dividends are increased annually at 7.0% and that dividends are not reinvested. Inflation will be taken as 3.00% and $10,000 will be invested in both.
Read more »
- A Few Good Reasons To Hoard Some Cash Now - By Jason Zweig
The stock market is near record highs. More money came into U.S. stock mutual funds the week of Oct. 23 than during any other week since 2007. Initial public offerings like Twitter are booming. So have you considered keeping more of your assets in cash?...
- Fight The Fed Model: The Relationship Between Stock Market Yields, Bond Market Yields, And Future Returns - By Cliff Asness (december 2002)
Abstract: The "Fed Model" has become a very popular yardstick for judging whether the U.S. stock market is fairly valued. The Fed Model compares the stock market's earnings yield (E/P) to the yield on long-term government bonds. In contrast, traditional...
- Do Stocks Provide A Sufficient Hedge Against Inflation?
A great article from Ben at The Inoculated Investor blog. Large Excerpt: So, with all of the issues with gold, I guess that leaves ownership stakes in businesses as the best inflation hedge, right? Bruce Greenwald thinks so: “The assets that are most...
- Income Update - March 2012
I've added a new line on my chart in "Your Money or Your Life" fashion. I'm calling it my FI for financial independence. The way I'll be calculating it is if I take my net worth less the value in my 401k and Rollover IRA since there's...
- An Important Misunderstanding About Dividends
My interest in dividends began during a previous job in which I helped manage the portfolios of ultra-high net worth individuals. In many cases, the account owners had bought their stocks decades earlier, never touched them, reinvested their dividends,...