Notes

SWR Success

We have captured today’s long-term return of the stock market. We have successfully brought the Safe Withdrawal Rate (SWR) up to the long-term return of stocks, based on today’s valuations.

SWR Success

Dividend-Based Design Example

This was my first attempt at dividend-based design. It was a success.

This approach delivers 4.0% (plus inflation) far into the future. The downside risk is a 4-year reduction of 5%, which would be a withdrawal rate of 3.8% (plus inflation), followed by 4.0% or more (plus inflation).

I followed the example with the Dividend-Based Design Outline. We are up to 4.8% (plus inflation), safely and perpetually, starting from today's valuations.

For a quick read, see the Dividend Sound Bite.

Dividend-Based Design Example
Dividend-Based Design Outline
Dividend Sound Bite

Top Notch Letters

Have you read our Letters to the Editor recently. I think that they are all TOP NOTCH. This last group is a great example.

Unclemick got me looking at the Dow Jones Utilities Index. I checked it at CBS Marketwatch. I compared its prices at 5 years and with ALL DATA to those of the S&P500 and the Dow Jones Industrial Average. It beats both of them! This is without counting dividends!

Between Unclemick and Rob Bennett, I have been thinking a lot about dividends recently. This is what led me to the Dividend-Based Design Example.

What is even better is that my Dividend-Based Design Example addresses BillW's questions. This makes it a great place to start.

January 11, 2006 Letters to the Editor
Lessons from the Dow Jones Utilities

Historical Perspective: Dividends and Earnings

We have had great success with our dividend-based strategies.

Central to any dividend-based strategy is assessing the quality of dividends. Critical to assessing the quality of dividends is assessing the quality of earnings.

I have extracted information from The Intelligent Investor by Benjamin Graham. I have added another article based on the same book.

Historical Perspective: Dividends and Earnings
Historical Perspective

The Story Behind the Numbers

Too often, I see numbers in isolation. Too often, someone identifies 4.0% as The Number without any explanation whatsoever. There needs to be more.

The original 4.0% was never The Number. It was only an illusion. The odds of success, starting from today’s valuations, were only 50%-50%.

We have now pushed Safe Withdrawal Rates much higher.

The Story Behind the Numbers

Individuals Pick Winners

The myth about not being able to identify superior mutual fund managers ahead of time is only a myth. Individuals do it all the time.

Somebody has to get above average returns. Any volunteers?

Individuals Pick Winners

Dollar Cost Averaging Today

Not many subjects are more relevant to investors than dollar cost averaging. It is a time-tested, successful strategy.

But what about today? Will today's investor stick with it? Maybe not.

Rob Bennett was right in his latest Letter to the Editor. You have to make it through years 10 and 15 to reach year 30. There is reason for concern.

Dollar Cost Averaging Today
Dollar Cost Averaging Today: Edited
DCA Today: The Point of Frustration

More Comments about the February 5, 2006 Letter to the Editor

I posted a response to Rob Bennett's February 5, 2006 Letter to the Editor several days ago.

Rob has followed up with additional questions and I have responded.

February 5, 2006 Letters to the Editor

Diminishing Returns

Here is how I address portfolio safety and diminishing returns.

Diminishing Returns

Bible Study

I recommend Thru the Bible Radio for Bible Study.

Thru the Bible Radio

Earlier Notes

Here are our earlier Notes.

Notes through August 21, 2005

Be sure to read A Note about Statistics at the bottom of the following link.

Notes through November 29, 2005

This references a couple of MUST READ articles. It has a couple of its own as well.

Notes through January 13, 2006

Problem Downloading Calculators?

I have received a couple of Letters from people who are having problems downloading calculators from my Yahoo Briefcase. Except for the REHP calculator, which is an Excel spreadsheet, they are in self-extracting zip files.

I have been able to download my calculators successfully using my FIREFOX browser. I download them to the desktop using Save Link As. I open calculator programs from the desktop, choosing NOT to overwrite files. This places the calculators themselves onto my desktop. Their icons are little spreadsheets.

I have NOT been successful downloading with my Microsoft INTERNET EXPLORER browser. My computer is unable to recognize the correct file type and build a spreadsheet. The best that I have been able to do is to put an unreadable text file (commonly referred to as Greek) on an Excel spreadsheet. This is related to Associating the downloaded program with the correct File Type.

Here are some links so that you can download a FIREFOX browser. NOTE: You can keep both FIREFOX and INTERNET EXPLORER on your computer.

Mozilla Home Page
FIREFOX Web Browser
FIREFOX Plug Ins

If you download FIREFOX, you will want to download its Plug Ins as well. They are needed so that you can use your Windows Media Player, Real Player, Quick Time Player and Flash Player with FIREFOX.

All of these downloads are free. FIREFOX is noted for having better computer security than Microsoft's INTERNET EXPLORER.

Here are a couple of more links.

I use Coffee Cup's free zip file wizard.

Coffee Cup's Web Site

I learned about Coffee Cup's free zip wizard from Kim Komando. She mentioned it in her Tip of the Day email newsletter a while back. Kim Komando's site includes links to other free software including anti-virus software.

Kim Komando's Web Site