The Next Big Crash - Are You Prepared?

One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

(18-10-2013, 09:42 AM)Temperament Wrote: Actually, my ideal is i can have a "Total Portfolio" which can generate enough cash and then some for my family's yearly expenses. But then no portfolio is static even if i have such a large portfolio i still have to manage it carefully.
Anyway, it's really only in my dream.

Agree, I also have this ideal all the time, an auto-pilot portfolio. But at the end, this is just but an idea. I consider myself a value investor, but I also take advantage of economic cycle, trend, fear and greed to actively managed my portfolio. My holding can be as long as many years, it can also be as short as a few weeks. Perhaps, as my portfolio becomes bigger, my time spent on managing it will be shorter.

Hi Ben,

What do you mean by "Perhaps, as my portfolio becomes bigger, my time spent on managing it will be shorter."

Thanks.

(18-10-2013, 09:56 AM)NTL Wrote: One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

I think 2x expenses is reasonable and comfortable.
It also depends on the type of expenses too. Medical bills in old age could be high...

(18-10-2013, 10:06 AM)NTL Wrote: Hi Ben,

What do you mean by "Perhaps, as my portfolio becomes bigger, my time spent on managing it will be shorter."

Thanks.

As mentioned, I consider myself a value investor, with a preference towards high yield dividend stock. When my portfolio is small, the dividends it provide is also small, and so I tend to spend more time managing it to try and milk out more profit (from capital gain on top of dividends). Sometimes it work, sometimes it don't, but most of the time, it met my personal target. As my portfolio gets larger, the dividends will also increase, and so I have less pressure, and thus spend less time managing it. This is just my personal style, maybe because I am lazy

(18-10-2013, 10:06 AM)Dividend Warrior Wrote:

(18-10-2013, 09:56 AM)NTL Wrote: One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

I think 2x expenses is reasonable and comfortable.
It also depends on the type of expenses too. Medical bills in old age could be high...

If your portfolio is large enough to achieve such goals, wouldn't fixed income investments look more attractive. I think equities are more useful for wealth creation and for wealth preservation, other instruments might be more suitable.

(18-10-2013, 10:25 AM)Clement Wrote:

(18-10-2013, 10:06 AM)Dividend Warrior Wrote:

(18-10-2013, 09:56 AM)NTL Wrote: One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

I think 2x expenses is reasonable and comfortable.
It also depends on the type of expenses too. Medical bills in old age could be high...

If your portfolio is large enough to achieve such goals, wouldn't fixed income investments look more attractive. I think equities are more useful for wealth creation and for wealth preservation, other instruments might be more suitable.

i beg to differ if fixed income is referring to Bonds or Bond Funds. i think FH rental property is "best" if you have the holding power especially in this lilttle "RED DOT" of ours.

(18-10-2013, 11:14 AM)Temperament Wrote:

(18-10-2013, 10:25 AM)Clement Wrote:

(18-10-2013, 10:06 AM)Dividend Warrior Wrote:

(18-10-2013, 09:56 AM)NTL Wrote: One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

I think 2x expenses is reasonable and comfortable.
It also depends on the type of expenses too. Medical bills in old age could be high...

If your portfolio is large enough to achieve such goals, wouldn't fixed income investments look more attractive. I think equities are more useful for wealth creation and for wealth preservation, other instruments might be more suitable.

i beg to differ if fixed income is referring to Bonds or Bond Funds. i think FH rental property is "best" if you have the holding power especially in this lilttle "RED DOT" of ours.

Both have their own advantages. I like financial assets as they are liquid, have lower transaction costs and are divisible ie I can sell parts of my holdings.

(18-10-2013, 11:26 AM)Clement Wrote:

(18-10-2013, 11:14 AM)Temperament Wrote:

(18-10-2013, 10:25 AM)Clement Wrote:

(18-10-2013, 10:06 AM)Dividend Warrior Wrote:

(18-10-2013, 09:56 AM)NTL Wrote: One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

I think 2x expenses is reasonable and comfortable.
It also depends on the type of expenses too. Medical bills in old age could be high...

If your portfolio is large enough to achieve such goals, wouldn't fixed income investments look more attractive. I think equities are more useful for wealth creation and for wealth preservation, other instruments might be more suitable.

i beg to differ if fixed income is referring to Bonds or Bond Funds. i think FH rental property is "best" if you have the holding power especially in this lilttle "RED DOT" of ours.

Both have their own advantages. I like financial assets as they are liquid, have lower transaction costs and are divisible ie I can sell parts of my holdings.

Everything in life has pros and cons and personal's preference. But i am quite sure people who have more money or capital than they can invest, will usually have more than one properties in their names. Even though property investment may not be their forte. Asset Allocations is really the end game.

(18-10-2013, 09:56 AM)NTL Wrote: One practice I read before for sustainable dividend for retirement is 2x annual expense on normal market condition. This will take care of most ups and down in the market. Is there too much margin for safety here?

I guess depends whether you are fully invested or not. If you have 20% cash or FD ... maybe can last for many years.