No. of Recommendations: 4
since the goal isn't really maximizing CAGR, but maximizing yield while merely maintaining a merely decent overall return over time.Oh, those dividends are costing you a lot. A lot lot.
That's a very laborious way to underperform a simple buy & (mostly) hold.
CAGR 9.7% with 21% GSD.
(Although it's better if you don't rebalance the kept picks, just the new purchases.
I usually set "fully rebalancing all liquid positions to equal weight every N holding periods" to 0 (zero) "to never rebalance positions after they are opened.")
I loaded the download daily report into Excel to cross-check the gtr1 numbers.
9.77% CAGR, 18.2% stdev, -44% Max DD Ending value $159.96
Ideally you want the stdev to be close to the CAGR. The higher it is above the CAGR the worse the performance metric is. The stdev is almost never as low as the CAGR.
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I have the data for a recent Russell 1000 stocks filtered by the VL 1700 symbols.
Of the top 400 by ROE, the average yield of the top 100 by yield is 3.37%.
The average yield of the top 50 by yield is 3.72%.
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With some Excel fiddling, assuming constant 3.7% yield, the total dividends for the entire period is $42.96.
Adding that to the ending value: $42.96 + $159.96 = $202.92 net
For comparison, I ran a backtest of SPY on testfol.io for the same dates.
Reinvesting dividends:
CAGR 14.4% volatility 16.6%, MaxDD -34%. Ending value $269.33
Taking dividends:
CAGR 12.4%, volatility & MaxDD the same Ending value $214.67
It looks like you would have been financially better off, and with a lot less effort, by investing in SPY and creating a DIY dividend by selling a few shares each year.
S&P 500 yields by year
Year yield Shortfall from 3.7%
2012 2.20% 1.50%
2013 1.94% 1.76%
2014 1.92% 1.78%
2015 2.11% 1.59%
2016 2.03% 1.67%
2017 1.84% 1.86%
2018 2.09% 1.61%
2019 1.83% 1.87%
2020 1.58% 2.12%
2021 1.29% 2.41%
2022 1.71% 1.99%
2023 1.50% 2.20%
2024 1.24% 2.46%
reply to:
https://www.shrewdm.com/MB?pid=575095871 high dividend screen
