"Messing around to see what would pop up, I screened my watch list based on quality, Growth+Yield, and expected five-year total return (eliminating the lowest both by my numbers and by ValueLine’s). Probably some garbage inputs in the mix, so do your own due-diligence before buying anything, but I thought the results were interesting. By my estimate this portfolio should deliver a high-quality 10% to 11% return looking forward, with a 1.9% yield.
Utilities: WEC, ES (NEE missed on forward returns)
Staples: COST, PEP, HRL, KMB, UL (PG missed on growth and forward returns)
Health Care: SYK, ABT, JNJ, MDT (MRK and UNH missed on VL projected return)
Discretionary: HD, LOW (NKE missed on my forward return, AMZN on quality)
Communications: GOOG (META and DIS missed on quality)
Industrials: HON, UNP, LMT, CMI (that last one surprises me - not a stock I own)
Technology: AAPL, ADP, APH, ACN, INTU, V, MSFT, MA (TXN missed on forward returns, CSCO on growth)
Financials: BRK.B, SPGI
Peeing into the pot to improve the flavor:
Utilities: WEC, NEE
Staples: UL, HRL, KMB, COST, PEP
Healthcare: MDT, JNJ, SYK, ABT, MRK, UNH
Discretionary: AMZN, LOW, NKE
Communications: GOOG
Industrials: CMI, UNP, LMT, HON
Technology: ACN, INTU, MSFT, V, AAPL, MA, TXN
Financials: SPGI, BRK.B
Dunno how useful that is to anybody else, but I definitely want to look more closely at CMI, ACN, and SPGI – three that I do not already own. And I’m definitely not feeling the love for PG at this price.
Ya sabemos la cifra que busca (2M).
Y que tiene 700k en cash…
“In 2017 we established a plan to hit a target accumulation of $2M in our retirement accounts in anticipation of retiring in 2030 at the age of 62. Updating the numbers through June 30 we’re again setting new highs in the retirement accounts. Adjusting for inflation we are 90% of the way to the goal.
Then that job insecurity rears its ugly head again. Our primary paycheck, representing half our household income and all the benefits, is on death watch. Two more years? Four more years? It is possible that they manage to right the ship and my wife can choose her retirement date, but it is also very possible that we will find ourselves with two kids in college and forced into retirement at age 55.
I’m not worried about the retirement income. By the time we can access it at age 59.5, those accounts will more than suffice to meet our needs. Give us two more years of a paycheck and we can probably bridge to 60 by burning cash from our taxable savings. But it is tough to connect the dots given the uncertainty involved.
Given all of the above, we’re carrying a lot more cash and fixed income than I would normally believe advisable, a little over $700k. One way or another, whether or not her job lasts to 2030, we’ll be spending down that cash accumulation. I’ve already capped it at that figure, with any new money going into stocks.
I’m clearly not a DGI. Our retirement plan is based on accumulation, not income, since much of the assets are in workplace accounts that do not pay dividends. Trying to impute an appropriate income to those assets ended up being more of a headache than simply dealing with the account balances. Nor does the taxable cash really fit a DGI structure - that is there to be spent to zero, not to provide a sustainable retirement income.
Yet nowhere in the plan or scenarios is there ever a need to sell stocks for retirement income. I’m not elated when the market rises and I’m not crushed when the market falls – we are invested in a broad slate of quality dividend (mostly) companies that will be there when we need them. For now and for the next half dozen years we’re not really doing anything with that portfolio, just basic maintenance.
Everybody has a different situation, different needs, and a different way of providing those needs. I have reasons (including years of habit) for doing things the way I do. It doesn’t mean that I believe that DGI is a bad approach, but it is equally foolish to ascribe emotions to me that I simply don’t experience.
I wish all of you the best, however you have chosen to invest for your needs.”