# ...pretty slow here lately...



## jargey3000 (Jan 25, 2011)

what's going on?
everyone on the dope , or what?


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## like_to_retire (Oct 9, 2016)

jargey3000 said:


> what's going on?
> everyone on the dope , or what?


We're contemplating if robots will ever take over the world?






ltr


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## Koogie (Dec 15, 2014)

You're about 9 hours early. 7.5 in Newfoundland.


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## OnlyMyOpinion (Sep 1, 2013)

like_to_retire said:


> We're contemplating if robots will ever take over the world?
> ltr


Take over the world? Look what's coming around for Halloween! 
By next year Atlas might be armed and delivering our mail?:


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## jargey3000 (Jan 25, 2011)

Koogie said:


> You're about 9 hours early. 7.5 in Newfoundland.


yeah, ma-a-a-a-an....forecast tonight calls for a lot fog ...and haze.....


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## james4beach (Nov 15, 2012)

jargey3000 said:


> what's going on?
> everyone on the dope , or what?


jargey, people have less fun when stocks are going down. My observation of this forum is that people are peppy and vocal when stocks are going up -- probably because they're feeling good about their investments. The moment there's a down draft, people fall silent.

At least, that's how it seems to me.


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## Beaver101 (Nov 14, 2011)

^ Probably so but then there's a tiny spike in activity in the "What you're buying in 2018" thread.


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## agent99 (Sep 11, 2013)

Maybe some are smoking instead of investing? Probably less stressing?

For us, dividends keep rolling in. We are getting a bit higher yield on FI. US$ are accumulating in RRIFs from new US side to help pay for snowbirding. Not much to complain about, except it is zero C here today and still many Fall outdoor jobs to do.


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## jargey3000 (Jan 25, 2011)

agent99 said:


> Maybe some are smoking instead of investing? Probably less stressing?
> 
> For us, dividends keep rolling in. We are getting a bit higher yield on FI. US$ are accumulating in RRIFs from new US side to help pay for snowbirding. Not much to complain about, except it is zero C here today and still many Fall outdoor jobs to do.


no offence 99, but im always a bit puzzled when people talk abou getting a "higher yield" now.
basically, your still just getting the SAME AMOUNT of actual dividend dollars - no?
but because the price of the underlying stock has dropped, the yield % increases- no?
if thats correct, to me its like trying to justify something positive,out of a negative, if you know what i mean.
ami wrong? no offence, but i dont seem to hear people say that their "yield has fallen", when stock rise...?
tha actual amt. of div dollars hasnt changed?


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## Dilbert (Nov 20, 2016)

^Yeah, but companies do increase their divvy payout as well, sometimes.


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## jargey3000 (Jan 25, 2011)

yes, of course...which WOULD raise rhe yield...but im talking about all things bring equal...no increase..


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## agent99 (Sep 11, 2013)

jargey3000 said:


> no offence 99, but im always a bit puzzled when people talk abou getting a "higher yield" now.
> basically, your still just getting the SAME AMOUNT of actual dividend dollars - no?


Jargey, I said I was getting a higher yield on FI. When I buy GICs etc when others mature.


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## jargey3000 (Jan 25, 2011)

agent99 said:


> For us, dividends keep rolling in. We are getting a bit higher yield on FI.


ahhhhh.....the FI part didnt register.... my bad.... toomuch weed i guess....


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## AltaRed (Jun 8, 2009)

agent99 said:


> Jargey, I said I was getting a higher yield on FI. When I buy GICs etc when others mature.


+1... wondered myself what the heck people were going on about... 

That said, over long periods of time, dividend yield on stocks generally float within a trading range, e.g. high when stocks are depressed (and a buying opportunity) and low when stocks are on a tear (selling opportunity). 

One investing strategy in blue chip dividend investing is to trade stocks within the historical high/low dividend yield range. Might be a 5 year cycle, or a 10-15 year cycle. Value traps and nosebleed momentum stocks not included in this strategy of course..... It takes discipline to operate under this strategy (a take off this strategy is investing in the 5 big banks, i.e. buy the 1-2 with the highest yield and sell the 1-2 with the lowest yield - review each year, rinse and repeat).

Added: Never tried to do this personally in a direct way, but intuitively I've used it along with other metrics to decide on a purchase.


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## james4beach (Nov 15, 2012)

I think the increase in fixed income yields is pretty exciting. Well over 3% in GICs now. And look at XSH (short term corporate bonds), now 3.19% YTM less 0.10% MER still gets you 3.09% yield after fees.


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## AltaRed (Jun 8, 2009)

Indeed, but must be cognizant that 31.48% of holdings are BBB credit quality and only 3.84% AAA. The alternative is XSB for much higher credit quality (50.49% AAA, 10.48% BBB) but of course YTM is much lower at 2.69%. 

Is XSH worth 50 bp? Maybe depending on the purpose of the holding.


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## agent99 (Sep 11, 2013)

james4beach said:


> I think the increase in fixed income yields is pretty exciting. Well over 3% in GICs now. And look at XSH (short term corporate bonds), now 3.19% YTM less 0.10% MER still gets you 3.09% yield after fees.


When in retirement and doing something like a 4% SWR, 3% is not too exciting. 

Especially when it gets taxed at max rate. Barely covers inflation. 

But at least trend is upwards.


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## AltaRed (Jun 8, 2009)

I don't think the fixed income component of a balanced portfolio was ever intended to carry its weight of a 4% SWR. That is what the risk premium of the equity component is there for.


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## james4beach (Nov 15, 2012)

Good point AltaRed about the lower credit quality in XSH compared to XSB. Worth thinking about. Personally in my fixed income, I load it up with the highest grade government bonds, and then GICs, so everything in my fixed income portfolio is federally backed. This means lower yields, but I like that tradeoff.

In my view, fixed income is your safe stuff. It's not the place to reach for performance and yield. The returns (and risk) come from stocks.

As for the 4% SWR ... the bonds are there to stabilize the portfolio and reduce sequence of return risk and drawdown.

Equities drive the returns of portfolios. But you don't need a huge amount to get the benefit. For example a 50/50 portfolio does quite well in withdrawal mode, as do even lower equity allocations such as 30/70.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> In my view, fixed income is your safe stuff. It's not the place to reach for performance and yield. The returns (and risk) come from stocks.
> 
> As for the 4% SWR ... the bonds are there to stabilize the portfolio and reduce sequence of return risk and drawdown.
> 
> Equities drive the returns of portfolios. But you don't need a huge amount to get the benefit. For example a 50/50 portfolio does quite well in withdrawal mode, as do even lower equity allocations such as 30/70.


Completely agree James.

ltr


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## agent99 (Sep 11, 2013)

AltaRed said:


> I don't think the fixed income component of a balanced portfolio was ever intended to carry its weight of a 4% SWR. That is what the risk premium of the equity component is there for.


Yes, but if FI yield is low like 2%, then there is need to take more risk on equity if aim is a 4% SWR. 
I have always tried to find relatively safe forms of FI that do have higher yields. Maybe adding a little risk to FI to reduce need for higher risk in equities. Things like split pfds, pfds, corporates, convertible debentures. Was out of GICs until recently starting back in. It's just a balancing act.


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## AltaRed (Jun 8, 2009)

I had a few corporates and debentures too when 5 yr GICs were almost down to 2%. Nothing below BBB though and only for a term of 5 yrs or less. Still have a few of those sitting in the 5 year ladder waiting to eventually mature (and then not replaced).

Eg. an ENF income fund holding, and a H&R REIT debenture. I didn't go with anything I wouldn't potentially hold the common equity of.


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## like_to_retire (Oct 9, 2016)

agent99 said:


> Maybe adding a little risk to FI to reduce need for higher risk in equities. Things like split pfds, pfds, corporates, convertible debentures. Was out of GICs until recently starting back in. It's just a balancing act.


Preferreds and convertible debs are hardly low risk. Most debs aren't even rated. 

Why not keep fixed income safe, and take your risk with equities? 

Why take risk with everything? That only works until it doesn't.

ltr


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## agent99 (Sep 11, 2013)

like_to_retire said:


> Why take risk with everything? That only works until it doesn't.
> 
> ltr


You mean like those rate resets?


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## like_to_retire (Oct 9, 2016)

agent99 said:


> You mean like those rate resets?


Exactly - sheesh, those damn things.

ltr


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