![]() ![]() Let’s start by taking a look at VYM in isolation. All together it holds 6454 stocks! Just like VYM, FFNOX is passively managed. It even contains 12.19% US bonds and 3.09% international bonds (the remaining 0.02% is cash). This fund consists of 50.08% US stocks (both large and small), 24.21% international developed market stocks, and 10.41% emerging market stocks. The fund I am selecting is Fidelity’s Multi-Asset Index Fund, FFNOX. Speaking of diversification, the other portfolio will center around a fund that is arguably the most diversified a person can get with a single mutual fund. I’m fine not being diversified if it means not owning shares of companies that are not paying me to own them. It’s true that 410 is a small number compared to the US investable universe of stocks however, only a small fraction of them are mature enough and financially stable enough to pay a dividend (according to my stock screener there are 6275 common stocks in the United States and 1553 of them pay a dividend). Excluded are companies that have not paid a dividend in the past 12 months or have a low or zero forecasted future dividend. It contains “only” 410 US stocks selected to be in the top half of dividend payers. The first portfolio will center around one of the largest positions in my portfolio, VYM, which is the Vanguard ETF that tracks the FTSE US High Dividend Yield Index. In this post, I am going to compare the results of withdrawal policies applied to two different portfolios consisting of equities and gold. As is always the case, this is not financial advice so you must not take any action based upon this work without careful and thorough exploration and possible consultation with a financial professional. I present to you, my reading audience, the results of this work in the hopes it might be useful to you. And so, as is often the case, the skeptic (i.e. Unfortunately, the podcasters did not include solid data to back their claims. One must hold as many stocks as possible, spanning not only different industries but all of the different geographies on Earth! The podcasters made their claims with such confidence that even a skeptic could be swayed. It’s not enough to hold a few dozen high-quality stocks across different industries. ![]() So what was the source of my doubt this month? I heard claims on several different financial podcasts that massive diversification is essential. In my mind, it is better to experience doubt and be open to change than to hold stubbornly to a bad theory. ![]() Sometimes I experience periods of intense doubt, to the point of losing sleep. Why is this a problem? It is a problem only because I regularly encounter ideas that sound very plausible and are in conflict with what I believe to be true. I also entertain too many diverse opinions. ![]()
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