“Let’s say leading up to retirement, you or your advisor was reaching for a conservative 3% real return.” Mark, you do say conservative, but where did you come up with such a low number of 3% ? From my observation, peoples ability to predict the market’s future is essentially zero, and the market routinely returns more than 3 %
Love Jim. However, ““What you don’t realize is that nobody else knows the right answers either”, suggests a “see no evil, hear no evil, speak no evil” approach. While THE right answer may be unknowable, some answers are more right than others.
I think this is quite understandable, from ChatGPT ; In retirement planning, a “total portfolio approach” means you stop thinking of each investment account or asset as having to serve a separate purpose—“this bond fund generates my spending money,” “these stocks are for growth,” “I’ll live off dividends,” etc.—and instead treat all of your investments as one integrated portfolio designed to support your spending needs. The key idea is total return: Total return = interest + dividends + capital appreciation Suppose you have a 1 million portfolio and decide that 40 K is an appropriate annual withdrawal. Under a total-portfolio approach, you don’t insist that the portfolio generate 40 K of dividends and interest. If it produces $25 K of interest/dividends, you can obtain the remaining 15 K by selling investments. Economically, the combination is what matters. This connects directly to our recent discussion about bond interest versus stock dividends. A total-portfolio approach deliberately avoids giving dividends a special status. A $50,000 dividend isn’t inherently preferable to selling $50,000 of appreciated stock. In fact, selling shares can sometimes be more tax-efficient, because only the gain embedded in the shares sold is potentially taxable, whereas taxable interest is generally ordinary income.
It also means you can design the portfolio around the characteristics you actually want—perhaps stocks for long-term growth and inflation protection, bonds for stability and spending needs—rather than choosing investments simply because they produce income. For your retirement-spending question, this distinction is particularly important. When estimating how much you can sustainably spend, I would use a total-portfolio framework: Social Security and other outside income + withdrawals from the entire investment portfolio, while taking taxes and account type into account. I would not limit your spending to dividends and interest. And there’s one subtle but important point: “total portfolio approach” can also refer to asset allocation across all accounts collectively. For example, you don’t necessarily need every IRA, taxable account, and 457 to each be 60/40. One account could hold mostly bonds and another mostly stocks, while the combined household portfolio has the desired allocation.
No. The fact that it gave out dividends is meaningless to its price today. Its value is based on whether its earnings/share have increased over 50 years. As per Sam Ro of TKer, the most important determinant of a stocks price is EARNINGS
on The Compound and Friends / What Are Your Thoughts on April 7, 2026, with Josh Brown and Michael Batnick. They were discussing a survey by Meb Faber about whether investors understand how dividends work.
The question was essentially:
If a stock is worth $100 and pays a $5 dividend, what do you have afterward?
The correct answer is $95 of stock + $5 cash = $100, not $100 of stock + $5 cash = $105.
The striking result they discussed was that about 75% of respondents apparently thought the dividend was essentially “free money”—i.e., that they ended up with $105. Only roughly 25% understood that the stock price adjusts downward for the dividend.
“However, the bond funds also kick off an income stream” Bond income is NOT the same as a dividend
1) when you receive bond income the total value of your asset has gone up - your original investment PLUS the interest
2) when you receive a dividend, the total value of your asset has NOT changed ; the value of the stock goes DOWN exactly in proportion to the dividend payed. You have made NO money. Edited from ChatGPT: — ”$100 bond + 5% interest = $105, while a $5 stock dividend doesn’t turn $100 into $105” —
Really ? Again ? I am going to link this excellent article, for at least the second time, by Josh Brown, on dividends. https://www.downtownjoshbrown.com/p/dividends-are-a-feature-nothing-more
“Unlike an annuity, where payments end with the death of the owner”This is incorrect - I have an annuity which is a 10 year “period certain” annuity, such that all of the funds are paid out over 10 years, with the added feature that if I die during the ten year period, payments continue to my beneficiaries.
Comments
That still seems very low. It implies that the 4% rule would not be valid.
Post: Flipping the Script on Asset Allocation?
Link to comment from September 18, 2026
“Let’s say leading up to retirement, you or your advisor was reaching for a conservative 3% real return.” Mark, you do say conservative, but where did you come up with such a low number of 3% ? From my observation, peoples ability to predict the market’s future is essentially zero, and the market routinely returns more than 3 %
Post: Flipping the Script on Asset Allocation?
Link to comment from September 18, 2026
Love Jim. However, ““What you don’t realize is that nobody else knows the right answers either”, suggests a “see no evil, hear no evil, speak no evil” approach. While THE right answer may be unknowable, some answers are more right than others.
Post: Total portfolio approach?
Link to comment from September 14, 2026
I think this is quite understandable, from ChatGPT ; In retirement planning, a “total portfolio approach” means you stop thinking of each investment account or asset as having to serve a separate purpose—“this bond fund generates my spending money,” “these stocks are for growth,” “I’ll live off dividends,” etc.—and instead treat all of your investments as one integrated portfolio designed to support your spending needs. The key idea is total return: Total return = interest + dividends + capital appreciation Suppose you have a 1 million portfolio and decide that 40 K is an appropriate annual withdrawal. Under a total-portfolio approach, you don’t insist that the portfolio generate 40 K of dividends and interest. If it produces $25 K of interest/dividends, you can obtain the remaining 15 K by selling investments. Economically, the combination is what matters. This connects directly to our recent discussion about bond interest versus stock dividends. A total-portfolio approach deliberately avoids giving dividends a special status. A $50,000 dividend isn’t inherently preferable to selling $50,000 of appreciated stock. In fact, selling shares can sometimes be more tax-efficient, because only the gain embedded in the shares sold is potentially taxable, whereas taxable interest is generally ordinary income. It also means you can design the portfolio around the characteristics you actually want—perhaps stocks for long-term growth and inflation protection, bonds for stability and spending needs—rather than choosing investments simply because they produce income. For your retirement-spending question, this distinction is particularly important. When estimating how much you can sustainably spend, I would use a total-portfolio framework: Social Security and other outside income + withdrawals from the entire investment portfolio, while taking taxes and account type into account. I would not limit your spending to dividends and interest. And there’s one subtle but important point: “total portfolio approach” can also refer to asset allocation across all accounts collectively. For example, you don’t necessarily need every IRA, taxable account, and 457 to each be 60/40. One account could hold mostly bonds and another mostly stocks, while the combined household portfolio has the desired allocation.
Post: Total portfolio approach?
Link to comment from September 14, 2026
Yes you did: However, the bond funds also kick off an income stream. Key word - ALSO
Post: I will still take the dividends
Link to comment from September 14, 2026
No. The fact that it gave out dividends is meaningless to its price today. Its value is based on whether its earnings/share have increased over 50 years. As per Sam Ro of TKer, the most important determinant of a stocks price is EARNINGS
Post: I will still take the dividends
Link to comment from September 14, 2026
on The Compound and Friends / What Are Your Thoughts on April 7, 2026, with Josh Brown and Michael Batnick. They were discussing a survey by Meb Faber about whether investors understand how dividends work. The question was essentially: If a stock is worth $100 and pays a $5 dividend, what do you have afterward? The correct answer is $95 of stock + $5 cash = $100, not $100 of stock + $5 cash = $105. The striking result they discussed was that about 75% of respondents apparently thought the dividend was essentially “free money”—i.e., that they ended up with $105. Only roughly 25% understood that the stock price adjusts downward for the dividend.
Post: I will still take the dividends
Link to comment from September 13, 2026
“However, the bond funds also kick off an income stream” Bond income is NOT the same as a dividend 1) when you receive bond income the total value of your asset has gone up - your original investment PLUS the interest 2) when you receive a dividend, the total value of your asset has NOT changed ; the value of the stock goes DOWN exactly in proportion to the dividend payed. You have made NO money. Edited from ChatGPT: — ”$100 bond + 5% interest = $105, while a $5 stock dividend doesn’t turn $100 into $105” —
Post: I will still take the dividends
Link to comment from September 13, 2026
Really ? Again ? I am going to link this excellent article, for at least the second time, by Josh Brown, on dividends. https://www.downtownjoshbrown.com/p/dividends-are-a-feature-nothing-more
Post: I will still take the dividends
Link to comment from September 13, 2026
“Unlike an annuity, where payments end with the death of the owner” This is incorrect - I have an annuity which is a 10 year “period certain” annuity, such that all of the funds are paid out over 10 years, with the added feature that if I die during the ten year period, payments continue to my beneficiaries.
Post: Financial Choices
Link to comment from September 12, 2026