FWIW I agree with this.
I know a number of people who have run various investment strategies and have run into problems with having to draw into capital in this market.
In this market, we've seen many large caps totally trashed. Companies whose dividends seem rock solid cut it and so on.
The 50 million was based on a possible 1% annuity rate that pension funds might expect. But even that might seem generous in this market.
I know a number of people who have run various investment strategies and have run into problems with having to draw into capital in this market.
In this market, we've seen many large caps totally trashed. Companies whose dividends seem rock solid cut it and so on.
The 50 million was based on a possible 1% annuity rate that pension funds might expect. But even that might seem generous in this market.
Quote: (06-28-2012 11:33 AM)Gringuito Wrote:
I don't want to turn this into a silly pissing match but you're not correct that no one on this board will ever reach 500K a year for investments.
Also the investments you indicated below are not risk free, quite the opposite. If you try to pull $50k (any number will work) a year from this money you'll run into problems quickly. When you have a down year, you are so heavily equity based that your total net worth could go down 10-15%. That 50K you're pulling out that year is now a much bigger percentage then it was when your investments were flying-high. If you allow a few good years followed by bad years (all within your std deviation) you'll find that the money runs out somewhat quickly.
Let's just agree to disagree and move on.
Quote: (06-28-2012 11:07 AM)WestCoast Wrote:
I think I'll restate the obvious. No one on this board will ever reach 500K annual risk free even at 5%. Second, to manage money does not require a "family office or a financial advisor" simply used that as an example. Let's take a realistic example, $1M
10% cash running at (1%)
15 % junk bond yield group @ (7%)
10% small cap growth @ (10% with std deviatin of 15 % annual)
15% mid cap (8 % std deviation 10% annual and 1.8% dividend yield)
20% reits (10 % yield 0% cap gain, 5% std deviation)
30% large cap (4.5% cap gain, 5% std deviation, 3.5 % dividend yield)
Put all of this on auto reinvestment, or simply log into your account once a month or quarter to reinvest the dividends, doesn't take more than 7 clicks. If you can't do that you're prob too lazy to ever make a lot of $$$.