Markets remain a perplexing, challenging read and a dividend defense may not be the worst approach. The first thing you need to do is understand the environment. Whether you are in the accumulation phase or the distribution phase, dividend defense may be a good approach.
Dividend Defense: What are the risks you face today and how can you protect against them?
As you plan your retirement you have to be wary of myriad risks, and reliable dividend stocks can be a good way to insulate your portfolio through the cycles.
Let’s start by assessing the risks that can derail your retirement plan. 7 Dangers that Could Derail Your Retirement (and What to Do About Them) and 5 Silent Killers of a Financial Plan
Then, of course, there’s the truly defensive way of thinking. Seems like we have been waiting forever for the ‘other shoe to drop.’ It really has been a long run up since the debacle that was 2008/2009. Will it go on forever? Unlikely. Retirement Strategy: Do You Have What it Takes for the Next Major Correction? or Positioning a Portfolio Properly for Any Outcome
A quick word of caution: all signs point to passive investing as the way to go. Indeed this week Warren Buffett essentially endorsed the model saying: “ “ Two ways of looking at this, if markets are going to correct, indices go with them and how much of the market rise comes from the move to indexed products? Indexing Investment Strategy Becoming Increasingly More Risky? Not to mention, Monday Morning Memo: Is Capacity a New Restriction for the ETF Industry?
Dividend Defense: Using dividend stars to deliver returns or income and preserve capital
All too often we focus solely on the income aspects of dividend stocks. They are a great way to deliver income and preserve capital in the distribution phase. They are also a decent way to deliver returns and build basis in the accumulation phase. Regardless how you plan to utilize your dividend investments, fundamentally sound selection is the key. 15 Straight Dividend Hikes, Raised Guidance Again, Major Earnings Growth, 12% Upside or 10 Champion Dividend Dogs Said to Gain 7% – 22% by May 2018 or Dividend ETF to Retire On
Dividend Defense: Evolving political landscape aims to make self-determination easier.
No matter your opinion on where markets are heading or dividends as a tool, this is a good idea. TIAA, IRI Back Bill Requiring Retirement Plan Income Projections
We focus our effort on improving your retirement, today we start by looking at moving targets in Washington. Healthcare reform is dead. There is no coherent tax reform strategy. The budget talks will inevitably end in an impasse. They have no chance at a comprehensive immigration policy. Have you thought any of those things? Of course, you have, and now we have a stop-gap budget. There is a very high level White House outline of tax reform. The Affordable Care Act is back in the crosshairs, and immigration continues to brew on the side. Smart money seems to indicate that the House Republicans’ tax outline from last fall is the likely jumping off point. You can learn more about that here: http://www.taxpolicycenter.org/publications/analysis-house-gop-tax-plan/full. Should the ACA repeal and replace fail again (Don’t look now but the Republican health care bill is in trouble again. Again.) All the more reason to believe they will fight mightily to get something done on taxes.
The apparent lesson of the first 100 days is that this will not be easy. Turns out the Washington system is so dysfunctional that you cannot simply will it to work. Coalition building, which should be a deal maker’s forte, seems to be a giant vacuum. The far right of the Republican party want little to do with progress, standing on principle. The Democrats see that as an opening to stand firm. So, how does the deal maker in chief make these big things happen? Seems to me there will have to be some serious horse trading. If neither the Freedom Caucus nor the Democrats play, we may be in for a long two years. Unfortunately, big things need to get done and there is no template for making that happen.
With all these moving targets where does that leave you and me? Well, we have said this before, focus on what you can control. Today we will throw out a few facts, figures and ideas to help you improve your retirement. Perhaps a little pressure on your elected representatives to move some of these big agenda items will help, too.
Moving Targets: What is the landscape now? What can you be doing?
As always when it comes to major policy changes in DC, don’t hold your breath. It is best to plan given what you do know and what you can control.
Then again, knowing what you are up against is perhaps the best place to start. Imagine this, global central bankers continue to intervene in the world economy on unprecedented scale. Presumably this cannot go on forever … what is their plan? What is yours? BAML: The ‘$1 trillion flow that conquers all’ explains everything happening in markets
In the what else is new category we find another study indicating that Americans are not saving nearly enough for a secure retirement. Hopefully since you are this far down in the piece you are not among them … or committed to changing your ways. Only 1 in 10 Americans in Peak Financial Health
So, start working on your own situation. These 3 easy steps can improve your retirement savings – in less than an hour and Slash your retirement costs with these 5 tips (everyone read #3)
“If everybody is thinking alike, then somebody isn’t thinking.” – Gen. George S. Patton
The market mayhem continues pretty much unabated since the beginning of the year. Today the Dow is down significantly – over 2%. So, what may be driving this, and will it continue?
One obvious answer to what is driving this, China. How China accumulated $28 trillion in debt in such a short time Government intervention is the only thing keeping China’s stock market afloat
Then there is the market at home, is there simply a problem with fundamentals? A Year of Living Technically: Charting the Markets of 2015 (I urge you to look at the first chart, at least) Ralph Acampora: “We’re falling apart here and no one seems that worried.” US stocks suffer their worst first week since records began
Now that your head is spinning from the current state of markets, let’s focus back on the long term, your retirement:
I will start, as always, with fees. The Huge 401(k) Hit You Can Avoid Do you know where your 401(k) fees are hiding? Of course, it can’t always be that simple. New 401(k) suit targets Vanguard fund fees
How about some simple advice? You may not agree, or may not follow these, but they tend to be pretty sound. Everything You Need to Know About Money on One Index Card Warren Buffett’s 15-Minute Retirement Plan 7 Personal Finance Lessons from Bruce Lee
Another great idea on retirement, know your way around the retirement playing field. Newly improved retirement tax rules Understanding the retiree benefits of HSAs
A couple of iPhone tips for the weekend:
Everyone with an iPhone will like this trick. How to Force-Refresh the iOS App Store on iPhone or iPad This hidden iPhone trick does wonders to speed up your phone
Weekly select reading on leadership, retirement, and some fun diversions.
Why Buying a Corporate Jet Pays for Itself (Quartz)
7 Facts About Our Broken Tax System (The Nation)
Retirement: Help your employees, help yourself (MarketWatch)
Did the bull market happen without you? Here’s why (MarketWatch)
Fixed Income Still A Solid Retirement Investment (Investors)
Four Building Blocks for Investment Success (Abnormal Returns)
This Week’s Diversions:
Ever Notice That UPS Trucks Rarely Make Left Turns? (Harvard Business Review)
Watch: Kids See a Walkman for Maybe the First Time Ever (Entrepreneur)
Tax Day Charts: Federal Revenue and Spending (The Big Picture)
Plenty of online tributes to our veterans over this Memorial Day weekend. Many are touching. As I tweaked my site today to add a photo of a windjammer on Penobscot Bay in Maine, it seems appropriate to add my own thoughts. My father, who loved his Friendship Sloop and sailing in Penobscot Bay and Chesapeake Bay, served his country. We often trivialized it, as did he, saying he did his two years and retired a PFC. Truth is he played his part, probably more important than anyone would like to admit. As he got older, he became more nostalgic and truly valued the role he played and the importance of service – he was also a lifelong volunteer fireman. Ultimately, he chose to be interred in a National Cemetery near his adopted home in Jacksonville. In hindsight, more power to him, and thanks to him and all who have served, no matter the role. No role is trivial as they come together to deliver to us the ability to freely post what we will on websites like this, and there is nothing trivial about that. Enjoy your Memorial Day, but don’t forget why we remember.
Thanks to all who have served and sacrificed, and the loved ones they left behind. We can’t say it often or emphatically enough.