Dividend-News

Daily dividend news for investors in dividend stocks


Yield Hunting: An Update On Our Core Portfolio

Published Mon, 16 Apr 2018 10:00:00 -0400 on Seeking Alpha

Our Core Portfolio has the goal of generating income for retirees or being the fixed income sleeve for accumulators. On the former we have highlighted on several occasions the predicament income investors and retirees are in today amid near record low interest rates. Previous retirees could invest in 6-month CDs as recently as 12 years ago and earn 5.50%. It's hard to imagine that today. In comparison, 5-year corporate bonds currently yield just 3.75% with significantly more credit risk than a 6-month CD.
Retirees are currently weighing the dilemma of investing more in stocks, despite the 9-year bull run and moderately high valuations or accepting low interest rates that are below their hurdle rates (required rates of returns to make their financial plans work). Most financial plans depend on their portfolios reaching a certain annual rate of return target. Forward estimates for portfolio rates of returns will likely be met over a long time horizon (10-30 years) but we have a large cohort of baby boomers at or near retirement today that are facing the largest risk in today's market: sequence of returns risk.
Sequence of returns risk is the initiation of drawing on your portfolio and then experiencing a large decline in portfolio value early in your retirement years. When withdrawing from an investment portfolio the impact is an increase in portfolio volatility. Think of retiring in 2007 and the next year seeing your retirement nest egg decline by 25-35% or more. At... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SPDR S&P 500 ETF 271.65   0.0 0.00 4.80 1.73
ISHARES BARCLAYS AGGREGATE BOND FUND  

SPDR S&P 500 ETF - SPY
SPDR S&P 500 ETF - SPY  


Older articles featuring Spdr S&p 500 Etf (SPY):
Should We Be Concerned About The Yield Curve?
The Yield Curve Provides Limited Economic Information
Market Volatility Bulletin: Is The Long Bond Yield Too Low Relative To Inflation And GDP Growth?
The Flattening Yield Curve: A Signal Of Weak Inflationary Pressures Or An Economic Slowdown?
Fed Raising Rates, But Yields Still Negative
The Yield Curve As Recession Predictor: Should We Worry Today?
Weekly High Frequency Indicators: Yield Curve And Real M1 Deteriorate Further, But Mortgage Applications Rebound
Buybacks Get All The Macro Hate, But What About Dividends?
The Economic Mendoza Line: Is The Fed's New Yield Curve Professional Grade?
5 Ways To Beat Market: Update On Dividend Growth

More