Buying The Dow Stocks With The Highest Dividends Is A Winning Strategy I went and graphed Oct-Dec $10k change for CAPE, DSEEX, SP500, low-vol LC ETFs, plus DOD, MMTM, QUAL, SCHD, VIG.... And yeah, everyone has already beat me to the point: DSEEX and CAPE did not do any better, to the contrary, did somewhat worse.
(I too have wanted to use CAPE for Merrill no-cost trading but cannot.)
I was v impressed to see how comparatively well TWEIX, YACKX, and PRBLX did during that significant slump. Yay for active management sometimes.
Buying The Dow Stocks With The Highest Dividends Is A Winning Strategy @Sven, DSENX is not a balanced fund (as thoroughly discussed in past discussions here. msf I believe had some good info on that point) so that comparison you gave ends up being apples to oranges. I suppose it could be called a "hybrid" type fund for whatever that means. For me it's just a large cap fund that has a really good return record and does better than the index, whether that's the LC Value or S&P
500 index. And what is meant by your comment that the 2018 drawdown is sizeable? In 2018 per M* the fund lost -4.3% while the LC value index lost -8.
5% (S&P
500 was -4.4%). It is a little more volatile if you are basing that on the STD, but does that matter if your holding the fund long term and not trying to get in and out to time the market? Higher STD is a bad thing if you don't hold on to your funds. In any case, there is nothing to say this fund is significantly more risky than your typical large cap fund. Take a look at the upside/downside capture ratio. Again DSENX has more upside than the S&P
500 index and less downside. It blows the LCV index out of the water by that measure.
@MikeW, didn't really pay much attention before, but per M*, DSENX lost -1
5.6% and in comparison the S&P
500 lost -13.
5% in the 4th qtr. The CAPE ETF also lost about the same as DSENX so apparently it relates to the S&P
500 low valuation sectors the CAPE formula was invested in at the time. It is not a low-volatility fund if that's what you are looking for.
Buffett's Barbell: 90% Equities And 10% Cash For His Wife And Berkshire - And Maybe Retirees? By Jim Sloan at SeekingAlpha:
"
Summary•Buffett's 2013 Shareholder Letter stated that he would instruct the trustee of his wife's bequest to invest 90% in an S&P
500 index fund and 10% in short Treasuries.
•An academic back study shows that this unorthodox allocation produces not only high returns but a much lower failure rate than conventional 40/60 and 30/70 portfolios.
•The essence of the Buffett portfolio is to divide the future into the short term in which money is needed and the long term in which stock returns are superior.
•The effect, in bond manager lingo, is a "barbell" portfolio with concentration at very short and very long maturities and an excluded middle - the Berkshire term structure.
•It turns out that the barbell may be the best way of matching maturities to the needs of pension funds, institutions, insurance companies, and individuals - including some retirees."
https://seekingalpha.com/article/4239453-buffetts-barbell-90-percent-equities-10-percent-cash-wife-berkshire-maybe-retirees?ifp=0
Buying The Dow Stocks With The Highest Dividends Is A Winning Strategy David, why would you need a CAPE stand in?
You turned me on to DSENX years ago and it remains one of my top holdings. FDSAX seems a poor substitute for DOD and it hasn't even kept up with the S&P500 let alone DSENX. Some times more is less. Maybe not even sometimes.
Buying The Dow Stocks With The Highest Dividends Is A Winning Strategy CAPE, again, has outperformed DOD the last 6/5/4/3/1y periods. (Slightly.) I shoulda considered it when looking for a CAPE standin, instead of QUAL and MMTM and a few others. DOD sure has a higher UI, though, and by some degree.
