A famous 1994 study by William Bengen gave us the famous "4% drawdown" rule of thumb, which states that retirees should withdraw no more than 4% of their portfolio each year in order to not run out of money. Bengen also suggested that a mixture of 60% equities (stocks) and 40% intermediate government bonds is, in general, the optimal asset allocation during retirement. This article will introduce you to one of the most powerful strategies in the entire investing universe and explain how it can help you live your dreams in retirement.
A 2008 study found that between 1968 and 2007, the 100 top-yielding stocks in the S&P 500 returned 13.52% annually versus 10.53% for the S&P 500 as a whole. That's the difference between a $10,000 investment becoming $496,000 after 39 years (insufficient for retirement) and $10,000 growing to $1.41 million (more than sufficient). In addition, this portfolio had a sharpe ratio (which measures a portfolio's proportion of reward to risk) that was 43% better than the broader market's. If that weren't enough, Bengen claimed that, should a retiree pursue a high-yield portfolio strategy, their maximum safe withdrawal rate could be raised to 5% annually, greatly improving their quality of life during retirement.
Source: Motley Fool
Related Articles:
- 8 Dividend Stocks With A 15% Yield In 15 Years
- First Quarter 2014: Top And Bottom Performing Dividend Stocks
- Don't Touch These 5 Dividend Stocks!
- 7 Dividend Stocks Headed In The Right Direction
- Who Owns The Top Dividend Stocks?
Amazing Dividend Stocks to Help You Reach Retirement
Posted by D4L | Wednesday, November 05, 2014 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
GameStop (NYSE:GME) lost about 40% of its market value over the past three years, as rising digital downloads and declining mall traffic thr...
-
In a capitalistic society, opportunities to generate (mostly) passive income are all around us. Dividend growth investing is one of the most...
-
These elite income producers have rallied this year. Their brilliance at producing passive income seems to have caught the market's eye ...
-
Investors buy dividend stocks for a few reasons. For one, they provide income via dividends that act as a bonus on top of capital appreciati...
-
While optimism in the broader market remains robust – particularly for hyped-up sectors like technology – investors may still want to consid...
-
If you are looking for reliable dividends, these three Dividend Kings should be right up your alley. Dividends are paid at the discretion of...
-
Buying dividend stocks can be tricky. Oftentimes, stocks that pay exorbitantly high dividends have underlying financial problems, and their ...
-
Since the market highs in July, stocks have been under considerable pressure. Indeed, 10-year Treasury yields are at the highest level since...
-
A strong dividend investing strategy may be to focus on high-quality names that score well on several dividend-related metrics. In other wor...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.