QUOTE ON RISING DIVIDEND INVESTING
Meanwhile, when a dividend drops even in the slightest, to quote Buffett's Roman Empire doppelganger, consider it caveat investor: Let the shareholder beware.
"When a company cuts its dividend it is often a sign that the company is unhealthy, which may cause the stock price to drop," says John H. Robinson, owner of Financial Planning Hawaii in Honolulu. Additionally, some mutual funds are bound by prospectus to only invest in dividend-paying companies," Robinson adds. "So when a dividend is eliminated the price may take a hit as the shares are sold from these fund portfolios."
Robinson – a self-described disciple of random walk theory and efficient market hypothesis – advises clients, "We do not invest in individual stocks for the purpose of outperforming the broader stock market. Instead, the rising dividend stocks we purchase fill a unique objective: providing an income stream that rises at rate that is consistently higher than inflation over time." He adds: "Hopefully, we get some capital appreciation over time, too. If we happen to outperform the broader large cap markets in some years, it is pure luck."
Read More at U.S. News & World Report: https://money.usnews.com/investing/dividends/articles/2018-05-22/why-dividends-are-important-for-investors27 November 2018
QUOTE ON INDEX FUND INVESTING
"While the superiority of passively managed index funds over active fund management is well-established, a question that rarely arises in personal finance discourse is, “Does this mean index funds (and/or ETFs) are really the only investments American consumers need?”"
"While the rise of index fund investing undoubtedly benefits investors, developing a sound, tax-efficient retirement portfolio may require the inclusion of individual securities and careful planning across multiple types of accounts."
Read more: There Is More to Investing Than Index Funds https://www.investopedia.com/advisor-network/articles/benefits-investing-more-index-funds/#ixzz5Y5KMDUhD
Follow us: Investopedia on Facebook
QUOTE ON THE FLAWS AND LIMITATIONS OF MONTE CARLO SIMULATION SOFTWARE
In terms of over-optimism, one common problem in competing Monte Carlo apps involves the failure to fully account for both internal investment management expenses and external advisor fees. As we all know, under estimating the impact of such expenses by as little as .5-1% per year over a 30 year retirement horizon can have a big impact on the results.27 November 2018