Weekend Reading – Another lost decade on the way?
Welcome to some new Weekend Reading: my another lost decade on the way edition.
You can check out other recent editions and past popular articles below:
As the RRSP contribution date comes near, these are some RRSP facts you need to remember this year and beyond!
This millennial has accummulated $1.5 million in net worth, in his mid-30s. See how he got there including investing in some exotic assets!
I recently highlighted 5 stocks I want to buy in 2022. Some readers disagree with my picks – read on!
Have a great weekend and see you around the site. I’ll be here to answer commets all weekend!
Another lost decade on the way?
Interesting read from Dimensional this week to remind us that stock markets can go sideways, for long periods of time, and potentially another such period is on the way.
Case in point: the so-called “lost decade” from January 2000 through December 2009 resulted in disappointing returns for many investors, even those that profess indexing is best above all else.
The S&P 500, had averaged more than 10% annualized returns before 2000, delivered far less-than-average returns from the start of the decade to the end. Annualized returns for the S&P 500 during that market period were −0.95%.
Seeing this graph, and the early stock market volatility in 2022 has made me wonder if another such decade is now upon us. Of course, we’ll only know in hindsight but I’ve already prepared my portfolio for such a period.
You guessed it, via dividend paying stocks.
In the last five weeks alone, I’ve been the beneficiary of the following dividend raises:
Now, I don’t expect juicy raises like 18% or 19% to happen very often, but it is comforting to know when Mr. Market is having some fun with other investors I tend to sleep very well at night knowing a good portion of my portfolio will continue to make more money over time.
And, whether the market is sideways for a few days, a few months or potentially a few years, you and I should be reminded that the “long game” that is investing will eventually reward the patient, the disciplined and the persistent saver and investor.
“The worst 30-year rolling return in the S&P 500? +559% – which equates to an annualized total return of 6.5%. And this occurred in a period that included the Great Depression and World War II. The lesson: by increasing your holding period to decades instead of days, you can actually reduce your risk of a bad outcome.”
Reference: Are you investing or merely speculating from CompoundAdvisors.
More Weekend Reading
I’ve updated my Beat the TSX (BTSX) page to share some of the best Canadian stocks to own in any given year. This approach has absolutely clobbered the TSX index over long investing periods. The BTSX stocks are not recommendations for purchase of course but I do happen to own almost all of them in my portfolio – for inflation-fighting income and growth.
The fine folks at MoneySense highlighted whether (ha) an all-weather portfolio might be good for you?
Since it is RRSP-season, Jon Chevreau warned there is a perfect storm of challenges brewing this RRSP-season.
From one of my favourite blogs – you can’t overstate the power in saying “no” or “no, not right now”. This is great advice and a major reminder for any company or personal pursuits!
“The difference between average results and exceptional ones is what you avoid. Saying no to mediocre opportunities is easy. Saying no to good opportunities is hard.”
Like I wrote about above, I think markets can stay flat or deliver minimal returns for an extended period of time – watch out for that.
I enjoyed listening to Andrew Hallam on the Build Wealth Canada podcast, discussing how to live off your investment portfolio. I will be posting my interview with Andrew on this very site, very soon, so stay tuned!
Here are two of Andrew’s main suggestions for portfolio drawdown solutions:
1. He doesn’t mind the “4% rule” since the biggest risk is “dying with too much money” using this rule.
I agree to a point, I think the 4% rule is still a decent rule of thumb but only a starting point for any retirement drawdown planning. You can die with too much money!
I far prefer any Variable Percentage Withdrawal (VPW) strategy over the 4% rule – that Andrew also discussed.
2. To draw down your portfolio, consider the guardrail approach and avoiding “inflation adjusted raises” just for the sake of it. Leverage a variable approach throughout retirement in line with the following life-concepts:
- Spending is variable, like life, it is not linear.
- Spend a bit more money in “good years”.
- Spend a bit less money in “bad years”.
- Avoid chasing a financial “enough” number for the sake of reaching a financial number, but instead, consider chasing a more balanced life filled with happiness, engagement, purpose and income – certainly having money gives you choices in life.
Again, I’ll have my interview ready with Andrew to go on this site soon!
All About The Dividends remains all about his dividends in this income update.
Outstanding income stream by Melissa over at Our Life Financial. She earned: “$3,254.89 in dividend income this month.” Nice!
Over at Cashflows & Portfolios, we wrote about some top tax tips for retirees based on our work with clients. A reminder you can hire me or my partner on that site for a low-cost retirement projection report – at a price far lower than pretty much any advisor would charge you!
Need a good tax book? We all do to navigate tax-season!
Thanks to my friend The Grumpy Accountant all My Own Advisor readers receive a massive discount with no expiration off his book.
Just include the promo code “MOA” when you purchase the full PDF e-book from Neal’s site.
In doing so, you’ll get a whopping 30% discount!
Some FREE stuff!
A reminder I have some free calculators, tools and much more on this standing Helpful Sites page.
You can always read up on my stocks that pay juicy dividends here.
I’ll probably release my latest dividend income update next week, so until then…
Some of the best low-cost ETFs to own for growth can be found here.
I keep adding to dozens of case studies on my Retirement page here.
Check out this one:
Save, Invest, Prosper!
As always, check out my Deals page.
Have a great weekend!