Quote:
Originally Posted by GregWeld
Chad -- Nobody here is going to debate WHAT YOU THINK and WHAT IS RIGHT FOR YOU.... I've said this time and again - and will repeat. You - the individual - must sleep at night with the decisions you made for your investments.... regardless of what that is.
Having said that... you left out the fact that IF and WHEN interest rates rise - your bonds are going to be just as hammered (capital)... and that interest rates tend to rise slowly and are WELL TELEGRAPHED by the fed. There is plenty of time to bail from whatever strategy you've employed.
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I wasn't advocating bonds either. To me, my post still clearly states that its not good to own interest rate bearing securities (which includes bonds) in a rising rate market.
Bonds and Dividend stocks scare me a bit because I expect both of them to get hammered if interest rates rise rapidly.
I wished I owned a hell of a lot more bonds the last decade than I did (mostly 100% equity invested). As of now I have less than 10% of my money in bonds and have trouble significantly increasing a bonds position given where rates are at.
I was generally comparing dividend stocks to a total stock market index fund like VTSAX which has been yielding 2% and which I think has a much better chance of actually achieving the following statement you made:
Quote:
Originally Posted by GregWeld
The market will (should) rise in a interest rate rising environment "at first"... because it signals strength in the economy - then inflation will set in - and yields will fall - and so to, will stocks.
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Fair enough on debating what is right for each individual. I've seen this thread building for a while and thought it worth putting out some additional viewpoints on dividend investing that I haven't seen discussed. Namely the tax efficiency of it and its increased sensitivity to interest rates. At the end of the day I'm still very interested in getting some more dividend specific stocks and had been researching it quite a bit before this thread ever popped up but is why I've been following this thread. However, it is good to have different perspectives (the point of this thread) and you are extremely bullish on dividends
