Retirement Finance; Alternative Risk; The Economy, Markets and Investing; Society and Capital
Apr 9, 2018
Dividend investing meets Wealth Depletion Time and...nothing
Readers of the blog may have inferred that I like dividends, which is true. I tried, this morning to prove that div income as part of the mix has some certain superiority in the context of lifecycle econ via my Wealth Depletion Time tool. I will show none of this because I am too lazy and have done too many posts lately and the results were ambiguous-to-non-confirming anyway. I threw all the intelligence I could at it. I even threw all the intellectual corruption at it that I could possibly conjur. I knew the result I wanted and I tried to contrive setups that would prove my conjecture (honorable, eh!). But I couldn't do it. That may say more about the model than anything else perhaps. Wait! I thought. What about in the presence of sequence risk? Nope (though I did get a good illustration of how sequence risk can suck all by itself). The thing is, dividends are not magic. One is still consuming a slice of total return no matter how you slice it and the consumption thing doesn't change and the total return is still total return (and this is before talking about taxes or corp finance theory). I'm sure there are other ways to look at this and anyone that thinks they have a good bead on making a good case, send me ammo. I don't want to lose this fight yet but I think I am.
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