Tag: t_FWork9

beatIndex^ livelihoodBoost: choose your goals #R.xia

Posted on by tiger40490

 

See also

As I continue to invest more money + time, and write more blogposts evaluating my MOETF vis-a-vis other investments, there’s a real growing concern like

Q1: is my time and money well-invested in MOETF?  It is quite productive compared to my other investments, but perhaps an ETF/eqMufu would achieve higher total return and lower tcost?
%%A: even if you hold a SP500 ETF, there’s always [2] a legitimate need for an alternative equity portfolio with lower volatility, lower risk of a “down year”, higher cash payout, higher reassurance,,, Therefore, it’s my mistake to pit MOETF against SP500, when it’s not designed to compete with SP500.
A: tcost is addressed below

There’s a widespread perception that “mindless (therefore easy) investing in the U.S. [1] large-cap index will outperform most hand-picked MOETF in most years“. Buffet has struggled against the SP500 index for decades. I believe many value investors achieve lower return than the US large-cap indices. (Note SP500 is all-large-cap and all-US.) See Buffett no longer beating SP500. I do have some ETFs and mutual funds (T.R.Price) to capture the index appreciation. If after X years (to be decided) I still believe that MOETF consistently underperforms SP500, then I would allocate more to an SP500 ETF.

One portfolio in MOETF would become a fund comparable to a cash-cow retirement account; another portfolio an absolute-return fund without a benchmark. As such, MOETF is designed to meet those “other” needs.

Jolt: Similarly, most SP500 ETF investors also have assets in retirement accounts (401k), bonds (or money-market funds), gold, Reits, rental properties, dividend stocks etc, so it’s unfair to look down on those assets or MOETF.

[1] How about mindless investing in non-U.S. indices? Much weaker?
[2] many investors put aside that need .. unwise

— OPP .. It’s crucial to be clear what exactly we want out of stock trading. Many valid priorities of other investors are not important to us. In fact, these OPPs (other people’s priorities) may get in our way.

  • when you take on those OPP, your life becomes more complicated, when it can be simpler like mine. You may have to babysit your positions. Your firewall is strained.
  • when you take on those OPP, they could displace some of your true priorities. Analog: carry-on luggage (i.e. limited holder of true priorities) vs checked luggage i.e. holder of lower priorities
  • when you take on those OPP, you may inadvertently take on more risks.

Matching SP500 return … is a bad OPP. Investing 80% of my assets, and minimizing idle cash (make every dollar work hard) … is an OPP

Q2: how important is total return (including current income) vs beating some index?

These questions arise more often when I discuss with fellow investors. An unwise investor may have an implicit goal “match other people’s returns” even though he doesn’t know their pain/risk profiles or even their actual return rate. I try to avoid that unwise goal. I often justify MOETF using phrases like “absolute return”, firewall (sleep well), recreational (learning), DYOC(current income),,,

div stocks: widely seen as low-growth #valInv #laughing described the recurring scenario .. When I show my 5% current income to friends, they probably walk away laughing …

— Question 2 is similar to FOMO^livelihood  — am happy with the current income, the low-stress (firewall), the relatively low but positive return, but not so happy when I compare with some “high flyers”. Why the hell do I bother with other people when I’m happy with MOETF?

MOETF generates a few times more current income than any SP500 ETF or cryptos, if I (arbitrarily) exclude the low-yield stocks that I bought for growth.

— rental yield .. is a parallel. So far I’m satisfied with my SEA rental properties esp. the rental yield, perhaps more than my Beijing property. If I were to compare myself with those who achieved 10x returns in some Chinese-hot locations then I might feel diminished.

However my Q1 above is different. Compared to those hot property markets, SP500 is widely perceived as less risky and tracking ETFs are much more accessible (low entry requirement, very passive,,,)

— Learning and fun.. relatively vague ROI, but as a ROTI it is growing more important. See learning: fund^stock-pick

  • If you don’t need learning, then SP500 ETF beats almost all ETFs or eqMufu.
  • If you want learning, then growth stocks and cryptos threaten my firewall (babysitting, buy-n-forget)

— le2 XR… a summary on a familiar question. Q3: given that MOETF can’t outperform a SP500 ETF, why bother to hand-pick to construct MOETF?

  • A(mentioned in earlier mail): foreign stocks .. missing from SP500.
  • A(mentioned in the call): recreation and learning (see above)
  • A(mentioned in the call): dividend payout, esp. during a downturn.
  • A(mentioned in earlier mail): selective cash-out
  • A(mentioned in earlier mail): selective buy .. esp. if I know a company well. This feature could help me outperform SP500
  • A: consider retirees. They don’t focus on “return” only, so they allocate heavily towards bonds, annuities, dividend stocks outside SP500. One retiree I know invests heavily into a rental property for rental income. MyOwnETF doesn’t aim to outperform SP500 but aims to provide other benefits such as access to cash flow.
SP500 return is hard to beat, so I will probably maintain 50% allocation to SP500. As I age, we will need to reduce SP500 allocation.

(de)stressor in eq-investing #w1r4

Posted on by tiger40490

I guess for most equity investors, stress [like all-at-once stressor moments, distraction, sleep in peace,,,] is like an “occupational hazard”, a fact of life.

I practice mainly two forms of eq-investing AA) SP500_ETF, BB) recreational MOETF. All other forms of eq-investing are unfamiliar to me, and by default too risky in terms of “wildfire getting out of control”  .. such as those 3episodes@ non-recreational trading. It’s worthwhile reviewing stressful investing experiences.

Note the key benefits of AA and BB are unavailable in “my” other asset classes like FXO, leveraged FX, gold, bond mufu, Singapore ETF

== AA) mindless investing .. SP500_ETF (not other indices, not mufu) is one low-stress, buy-n-forget form of investing. What about $200k in it? Should be fine. Buy-n-forget SP500_ETF relies on the index committee as stock pickers. Other ETFs, like sector ETF or other countries’ ETF are usually less successful than SP500_ETF. (Note buy-n-forget a single stock doesn’t involve exit-timing. Can rarely beat SP500_ETF.)

How about “balanced” mufu? It is supposed to buy “stability” at the cost of return but in my experience it doesn’t reduce stress cf SP500_ETF. Actually I always maintain my own bond ptf + speculative ptf + …. I can rebalance them, something I can’t do with a balanced mutu. Also the expRatio is not worthwhile.

== BB) recreational MOETF .. a classic positive stress comparable to other analytical and active-learning pastimes, in tech, magazine-xx, healthy food preparation,,
However, as I commit more funds into MOETF, this recreation can get out of control. Therefore it requires a robust firewall.

The positive stress is felt in a few specific stressor contexts listed in Q9.

  • Heavy allocation to growth ptf .. leads to net_negative effect on my overall stress profile, net_negative after considering firewall, buffer build-up.
  • Overwhelming allocation to dividend stocks .. has a 50/50 chance to net positive or net_negative stress, depending on the context

— destressor: firewall .. is designed for 1) stress protection, 2) portfolio protection.
Q: what frequency of ptf review is the max before it would lead to net_negative stress? Give a single number please
A: [3->6] a quarter
— destressor: steady DYOC .. (from my income portfolio) supposed to /defray/ a lot of annual expenses, reducing cash flow stress, but I have low cashflow stress in the first place.

Substantial DYOC should reduce the impact of a down turn, to be verified ..

— destressor: price buffer build-up has limited efficacy in stress reduction.
— destressor: diversification … meaningful diversification is not easy. Any evidence of that within a stock portfolio? I have not seen any.
=====
— Q: your notion of a wise investor? Beware not all “experienced” investors are successful in stress-management.

  • stress reduction .. keep the growth portfolio small (relative to…). This is my idea of a wise investor.
  • stress prevention
  • stress protection .. is hard to achieve, even for experienced investors
  • portfolio protection … defensive ptf? I don’t think this is a standard strategy among wise investors. Many wise investors don’t mind high volatility in a small ptf.
  • SP500_ETF .. (rather than mufu) is probably popular among those “wise” investors.

— Q9: (personal experience ) when I came under _certain_ types of stressors (but NOT other stressors), I would increase my recreational MOETF hour-allocation and dollar amount allocation. A paradox!

There are too many types of stressors even in a single person’s life. Let’s first focus on those stressors “friendly to” MOETF:

  • the stressor of plateauing growth: 江河日下,自强不息, midlife crisis #timetable@self-growth? Yes. MOETF represents a new frontier of self-growth[learning]. MOETF increases my sense of relative superiority. Recreational MOETF generates positive stress.
  • OC-effective? T_semiKai3mo2? FOLB? presumably effective : stress-reduction by recreational MOETF
  • BMI stagnation? workout frequency?
  • boy’s academic motivation?
  • spouse quarrels? probably a positive diversion

growth ptf +income ptf +.. #w1r3

Posted on by tiger40490

Many investors maintain multiple portfolios (for whatever reasons). I wish to keep separate portfolios so that only my growth portfolio is benchmarked against SP500. It’s unfair to benchmark the other portfolios that way.

  • income + stability ptf .. Note income stocks without stability is useless
  • .. aka defensive ptf .. for down turns.
  • international ptf .. probably not worthwhile
  • blue-chip growth ptf .. including TRBCX + a few ETFs. Benchmarked to sp500 [1]
  • speculative ptf .. mostly hot assets including ARK funds. I do (rather than “did”)  hand-pick a few speculative stocks but not exactly to beat SP500.
    • mrna
    • tourism stocks

Some stock picks would be homeless [i.e. hard to classify].

Some stock picks would be multi-homed, like both defensive and high-yield. Don’t bother. Instead, it’s more important to have sufficient allocation to meet the various needs [for income, for protection]

Q: how do I go about creating a “muti-portfolio view” from the combined portfolio?
A: No easy way. So this discussion is kinda academic

— [1] to beat SP500 you have no choice but trade hot stocks. You really need market timing. It requires more analysis, more babysitting (for exit timing). I don’t want to play that game, so I use ETFs as the bulk of my growth ptf.

— DYOC .. My income prt should have dyoc > 5%. Aggregate dyoc doesn’t make sense.

The growth prt would dilute aggregate dyoc.

 

learning(as recreational investor) #fund^stock-pick #w1r3

Posted on by tiger40490

Q: How do I compare with my wife, as a stock picker? My view is likely biased, though I would try to counter-balance my bias
%%A: I think she dare not touch other names. Good for her.

… This question belongs to the end !

Q2: “learning” is a vague buzzword. What kind of thing can you learn? A vague question but be as specific as you can, please?

  • PP) (self + market) psychology  .. The crazy psychology of those investors… we just get used to it, without gaining insight. It’s a big rough sea.
  • EE) economists’ (like Shiller) analysis ..  including market valuation and timing. I took two modules under Mark Hendricks.
  • AA) security analysis as in value investing or quant analysis .. I only spend 10 minutes per name.
  • .. pre/post trade dividend analysis.
  • TT) trading techniques .. risk control, order placement, position mgmt,,,

中长线 analysis (I never did) sounds like learning in EE and AA, but if not applied on stock-picking, then I guess it is only applied on sector picking and market timing.

bccy market is so unstable and fluid that I don’t see any learning in terms of EE, AA,,,

Q6: what are your specific reasons for learning? A vague question but be as specific as you can, please?

  • motivation: intellectual curiosity — some people earn a degree in their 70’s, not to use the knowledge in some career. See also recreational investing
  • big motivation: total return (including current income and windfall far out)
  • motivation: better understanding (of the rough sea PP + EE), better control (of my little dug-out). [1]

[1] Is this motivation underneath the big motivation? Probably not. My twin brother, an ETF investor, could end up with higher profit at some point, but without any understanding/control. I don’t want to end up like him.

Q11: Do I gain any insight from hot growth stock picking? (Similar question can be asked on FX, FXO, gold, oil.)
A: not sure. Whatever capital appreciation could be due to timing or dump luck. In contrast. I gained AA/TT insights on div stock picking only months later, when my div stocks performed well during a downturn — unexpected success.

Q22: did I learn anything from years of mufu “research”?
A: close to zero in EE, some self-discovery in PP.

Q22b: with so limited learning, do I get any real joy from mufu/ETF investing?
A: I feel it’s like watching sex vs having sex. If you don’t know why you made money, then it’s mostly dumb luck with timing… no joy. Doesn’t satisfy my intellectual curiosity.

Q33 (Dahlan discussion): do you learn the most from investment failures, or do you learn more from expected success, unexpected success…?
%%A: I feel some failure is required learning (re commodifies and FXO..) in the PP, AA and TT domain. You won’t become competent swimmer without scary encounters with killer waves.

— The 10Y-question. Context: Like many investors, I started investing during my internship [commodities, UniFund…].
Q: with a 10Y career as an amateur investor ..  am I better than an intern?
A: No better, as a mufu picker. Answer is similar to Q22.
A: Yes as a rEstate and stock(?) picker, I had more frequent buying experiences than many. For rEstate, “Test Result” comes in very slowly. I did lots of research into EE/AA and some PP.

I don’t know Adam Khoo. I think he is an experienced motivational speaker, and trainer, where his talent and wisdom have sustainable value. I don’t know his investment skills.

Q: why does no investor give money to an intern as a fund manager?
A: because the intern shows no wisdom, no trec, and is mostly a blind follower of sentiment. In contrast, an intern can work as a junior but professional programmer, thanks to his technical knowledge gained over 3Y at least. Learning is an essential ingredient. Buffett: “Only when the tide goes out do you discover who’s been swimming naked.”

  • Q: Compared to many seasoned investors like me, an intern can achieve better return via SP500 ETF over 3Y. I think it is sustainable.  Is the intern better than me?
  • Q: Compared to many seasoned investors like me, an intern can achieve even higher return via ARKK over 3Y. I think it is less sustainable.  Is the intern better than me?
  • Q: Compared to many seasoned investors like me, an intern can achieve even higher return via BTC over 3Y. I think it is less sustainable.  Is the intern better than me?

liquidity[def]: how I gauge ILLiquid products

Posted on by tiger40490

I define liquidity as the expected number (possibly zero) of waiting months to fully recover my capital [1]. If I must incur a financial cost to access my cash, I consider it inferior liquidity. It feels like mis-calculation and mis-planning.

As defined, liquidity is a top 3 consideration in my investment decision.  I often think of liquidity more than (the vague concept of) risk. Therefore, liquidity is a dominant feature of my risk appetite and risk profile.

[1] Here is a fake example to illustrate some fine points. Say you incrementally buy one share of BRK.A and wait for X months to get near BrE. Presently, you only need to access the earliest 22% of that amount, but you have to liquidate the whole share, at a 3% loss. Still a big loss. So at the current price, the investment is not yet “free”, not at ABE, i.e. not_yet_liquid. However, suppose I also bought one share same way as you. If I’m able to select which fractional lot to liquidate, and able to liquidate the first 22%, then I am at ABE, i.e. breakeven on that 22% of capital. In such a scenario, the investment is already-liquid. In this illustration, fractional sell improves liquidity.

  • term insurance? liquidity is moot. Not an investment.
  • annuity? liquidity is moot. Not an investment.
  • cash-like? most liquid and low-risk

— ABE = actionable breakeven = a situation where I can liquidate a given position to achieve breakeven. Whether this breakeven includes various costs (like commission, FX) is unspecified. I usually include all costs.

BrE = breakeven. Half the times, the BrE situation is theoretical not actionable.

— With risk capital investments (rEstate, equities, HY/PE, gold …) there’s a pdf bell curve. I might have to wait for 10 years to breakeven and be free to liquidate (partially) to access part of my initial capital, or the wait could be 2Y.

I am used to this type of risk-capital liquidity. I have learned to embraced this type of risk-capital investments.

Mufu …. is generally less liquid than holding equivalent stocks because the wait is lengthened by erosive expensive ratio + upfront fees

Note dividend payout often improves risk-capital liquidity. Some risk-capital investments have no dividend — gold; SIA;  growth stocks

— My common objection to endowment products is super-safe illiquidity. No matter how lucky things turn out to be, I am likely to wait a long time before I can break-even via policy surrender.

CPF-OA/SA features horrible super-safe illiquidity, so I only accept CPF involuntarily.

— How relevant are bid-ask spread, upfront fees, and depth@market? Relevant.
Large transaction costs hurt liquidity as I defined.

[21] speed up: riskCapital4U.S.eq 20k #Aaron

Posted on by tiger40490

update:

My USD balance is now dropping to the minimum, so I can switch to using SGD. Stop div stock picking?

The trigger .. my mail to Aaron.Lee and Claris. I have failed to grow my MOETF risk capital from 10k to 20k during 2021.

Q: Now my trading frequency is lower, so how can I speed up the incremental pace.

  • Sugg: I can top up on existing low-allocation names
  • sugg: top up high on 499-blue-chips
  • Sugg: I can buy bigger chunks on new names. However, new names are usually less established, less proven than my G30 existing names. New names are always low dividend or non-blue-chip, and can become crying babies for the babysitter.
  • Sugg: Each episode/burst I tend to invest $50 – $200. Each year I have only 12<-25 sessions. To speed up, I need to invest much more each episode, like $200-$400.
  • Sugg: quick grab

— sugg: pick from divKing^divChamp ^divAristocrat .. I want to maintain my bias for div stock. Maintain 80:20 allocation to div vs low-div stocks.

wiseInvestor[def]: RPR profile #zqbx^xx #w1r2

Posted on by tiger40490

Interns can hit more profits, perhaps by trading cryptos or hot tech stocks…

pain (as opposed to risk and reward) also includes anger.

As I grow older, I am more aware of my pains in investment.
10% loss generates more pains in me than 10% gain can generate happiness.
No pain no gain. I still have 40Y+ to live, so I need to take on some risky assets such as SP500, or Sgp rEstate

k_investor_selfEval

See also

Too broad to be useful? Will focus on my idea of wise investor [mellowing up], which is mostly about 1) breakaway from convention wisdom, or wrong priorities [i] … and 2) risk profile self-discovery.

In addition, 3) Pain is also center stage of becoming “wise”, but behind the scene and less talked about. Various psychological pains [including stressors] are part and parcel of investing.  Those pains need to be  managed. Unexpected, unmanageable pain can be classified as One special risk.

[i]A wise investor understands that her own priorities [Risk/Pain/Return profile] are subtly unique and invariably different from the stereotypical investors. Therefore, a lot of “other investors’ priorities” are the wrong priorities for her. see also

— risk: over-commitment of personal time… A wise investor recognizes the risk of regrettable ROTI, even with the firewall intact
— risk: infatuated investors .. wise investors understand this tendency in herself
— risk: liquidity risk .. often requires large allocation to low-return assets. See make every dollar work hard4us @@
— other risks not specific to the “wise investor”:

  • long-term inflation risk .. See my Nov 2021 mail to Edmund
  • personal legal risk .. A wise investor would not lose sight of this risk.

— pain: stressors in eq-investing has a small section on “wise investor”. A wise investor would notice her internal stress sensitivities and work on stress prevention/reduction/protection.

Disambiguation : in this blogpost, “risk” refers mostly to financial risks; mental/health risk is classified as psychological pain.
— pain: firewall .. handles multiple risks and pains that I won’t list.
— pain: missing the boat on some high-growth assets
pain: FOLB by the cohort
— pain: setbacks .. (various types) A wise investor accepts them as facts of life in investing. She could choose to avoid certain assets forever [FXO, commodity futures..] Like R.Xia, she could decide to stand back and watch certain hot assets after losing money. No right or wrong.
— expected return .. if (a big if) and when all risks are understood and under effective monitoring, then the target return is a simpler question.

To reduce risks and pains, for some wise investors (or older investors), risk_capital could be a very small allocation. The smaller this allocation, the less pain/risk. My HY/PE is one example. Therefore, expected return is largely determined by the personal pain/risk profile.

Non-risk capital would go into low-return liquid assets including contingency_reserve. Some wise investors would find the low return painful.

jolt: It’s no shame to allocate 90% to low-return liquid assets.

I want to be an aggressive wise investor, with growing equity portfolio and rEstate portfolio.

jolt: equity portfolio doesn’t have to beat SP500. A wise investor won’t insist on that as a priority.

hot assets .. require a lot of wisdom and cool-headed detachment. Missing the boat is quite common and acceptable.

Q: Is zqbx [working towards higher returns] or passive acceptance of low returns a quality of some wise investors? 
Jolt: A: yes to passive acceptance. Investing is not personal improvement, not a noble cause, so I don’t associate it with zqbx.  However, I don’t like “lazy” investing. Some due diligence, some PP learning (separate section in this blogpost), some personal growth is part of being a wise investor. It requires effort, focus and dedication, but not zqbx.

— learning .. is a valuable bonus, not always necessary and not always possible.
Jolt: A wise investor may invest in 9 different “things” and learn nothing in depth from half or all of them. Note the different types of learning
— xpSelf has joys from learning and at moments of “short-term”[ii] profits like doses@delight. A wise investor recognizes that. By definition, a wise investor is 100% judged by the rmSelf.. These joys may not be significant to the evaluative rmSelf are are mostly forgotten.

[ii]In contrast, “long-term” profits by definition are very few, and much harder to achieve. For example, I had many joys with Jill’s HY/PE, and FXO, but mostly forgotten. The long-term result seems to be  a negative return.
— what experts to trust .. lots of theories make sense but are not really practical. Some academic theories have limited validity — most eq investing theories use U.S. stocks only, with a few (to a few hundred) thousand data points only. They don’t even recognize regime change.

— small number of experiences.. I told Caroline of  Propnex that most rEstate investors are not wise because we can’t try too many times, esp. compared to stock investors. After one or a few tries, we are experienced, but not necessarily wise.

Buffett said each person has a punchcard and 20 punches to make, and a few good punches would be enough!

==== some patterns of my bad bets. (I keep this section here as relevant.)

  • tx costs.. see https://tanbinvest.dreamhosters.com/18406/3episodes-of-non-recreational-trading/
  • non-positive DYOC .. see https://tanbinvest.dreamhosters.com/18406/3episodes-of-non-recreational-trading/
  • HY/PE poor transparency or regulation .. But German PE, Dr Soo’s first, E12 .. didn’t fail.

See also ## key variables in my bad/good bets
— eg sReit .. good transparency, highly regulated.
The blue-chip sReits have good bid/ask spread
— eg bccy .. bad bid/ask spread and fees; zero DYOC; poor regulation
— eg (neutral experience) US HY mufu .. real net DYOC was 1-3% considering fees and NAV erosion

cur_payout + NAV_protection #w1r2

Posted on by tiger40490

After the 2021 new year, I told Tanko about my 2 “high bars” (later becoming acid tests[1]) to pre-qualify[3] an investment asset

  • 1) criteria: Does it generate steady nonwork payout rate around 5% as current income? I have a blogpost on 6% being the highest realistic return over long-term, but that’s a Return rate. A Payout rate of 6%/year is harder.
  • 2) criteria: Does it show decent prospect of principal preservation over a 10Y horizon, worst case 20Y to recover? This is a personal view and conviction, because most of my chosen assets (except stocks) are actually illiquid , with no real time mark-to-market. In the short term, the liquid value could drop and I would endure.
  • .. Resist the temptation of windfall. Maintain a healthy detachment.

Note I spend quite a lot of time clarifying my principles 1) to give my “advisors” a less ambiguous description of my investment principles and 2) to help myself catch my own inconsistencies, irrationality, prejudices, illogical thinking…

[1] After I acquire the asset, I would use my 2 criteria as acid tests. BGC fails AcidTest1
[3] obviously I have other due diligence checks such as currency risk, affordability, concentration risk, liquidity

— [s=my soft spot].. In short, I look for the “killer combo” of steady passive income + confidence for long-term capital protection/preservation … A high bar. Any asset that qualify are rare gems.

This is my irrational soft spot, where I demand neither HIGH income or FULL protection.

— pre-qualified assets
Note — Like my healthy_longevity focus, any useful criteria need to prove its enduring strength and resilience against popular, mainstream herd-mentality. Therefore, it’s important to examine how my criteria disqualify some popular asset classes.

  1. CPFLife (not now) investing close to payout age
  2. SEA rental properties bought without mortgage
  3. [s] A subset of A-list and B/C-list div stocks, with DYOC above 5%. Note most big banks, big oil, big tobacco stocks hit 4%+
  4. [s] Energy12 + some (not all) of Jill’s HY/PE
  5. — also-rans and disqualified:
  6. Most Singapore Reits? no protection of principal. Low hope of steady appreciation. They are more like stocks than real estate.
  7. most mutual funds? lower current income than div stocks, and no long-term principal protection
  8. U.S. rental properties? Usually not passive
  9. China and SG properties? paltry current income
  10. BGC? lower income than khm + currency risk as a risk to of principal

— khm rEstate as case study
When I assess the Flatiron vs the Peak#4 opportunities, I realize that among all assets, these commercial rEstate appeal to ME (not sure about other investors). Do I romanticize the 10Y GRR? Possibly, so I caution myself about 1) credit risk 2) market risk 3) what after 10Y

Shop units (offices, hotels..) are the first asset class to meet the above criteria. Now I feel dividend cash-cow stocks are somewhat similar. To understand this asset class, we must compare it to those hot tech stocks:

  • dividend stocks are usually less glamorous partly because they don’t show fast or windfall appreciation
  • my favorite dividend stocks are usually household names, just as the tech stocks.
  • Unlike commercial properties, dividend stocks do fluctuate in valuation. This means buying at low price is more “possible” than in real estates
  • credit risk is higher with properties because dividend aristocrats are known to keep paying.