Hi El,

"What you can't seem to grasp is that corporate management determines the size of the dividend, based on it's financial situation, not the price of it's shares.  The market, not that same management, determines share prices.

Please explain WHY a company would cut it's dividend SOLELY because it's share price has been cut 50% by the market?  I can see (and have seen) the market clobber share prices for companys that might, or actually do, cut or eliminate dividends, but not the other way around."

Agree with first paragraph.  The market cuts prices for two reasons; (1) the lowering of all boats in a down market, pure panic and a good reason to buy more shares at higher yields, or (2) a real reason, like missing its quarterly profit estimate by 20% and the prospect of it going even lower due to some economic or event factor, and as you point out, an announced dividend cut.  Obviously, I was referring to the #2 in my remark above.

"We don't need to go into the number of stocks that have lowered divys this year alone"

Before this downturn, we were lead to believe that dividends were hardly ever cut.  Every sector is subject to the same type of crisis.

"But my point was that YOU DON"T KNOW THAT in advance."

"Absolutely.  That's the risk you take by investing in a dividend paying stocks.  The risk is that the company will cut, or eliminate, it's dividend.  Just like you don't know, in advance, that share prices will increase 10%"

Ahh, but I'm not the one declaring the 6+3 is safe as long as my yield is above 6 as you are.  I'm not the one saying I "need" 6% in adjusted dollars of my original portfolio as you are.

"Tell me, is it a greater, or less, risk investing in a non-dividend paying stock, expecting it to appreciate 10% per year, compared to investing in a stock with a 10% current yield?"

Red herring alert! Red herring alert! Red herring alert!  Your old fallback when things get dicey; compare to the mythical no dividend stock investor.  Let's focus on the real discussion.

"And if the dividend rate is raised by politicians who are responding to constituents cries for shutting off the gravy train to the "rich", then many of your high yield companies may cave to their shareholders pressure and cut their divys.  This will force you to really compromise in order to find stocks that will support 6% + inflation, requiring you to take more and more risk."

"You're starting to sound like a democrat!"

In other words, "Your right Bill, I could be in deep kimche if rate on Dividends and CGs go up, and companies begin to concentrate of price appreciation and LT CGs that are only realized when the shareholder sells."  I don't have to be a Democrat to see what may happen.  But your weak answer to this concept is an answer in itself. All you have to do is look at the history of dividends when the CG tax was lowered, while the dividend tax was left the same; lower dividends.  It's a risk alright.

"Look, the bottom line, for my portfolio, is that it's current yield is 11.6%, and the number of yield dollars it generates has grown about 6% per year over the 5 years of my retirement, even after withdrawals have been taken.  According to Josh Peters, my expected portfolio return, going forward, is 17.6%, regardless of what happens to the value of my portfolio."

Well, I haven't read the book yet, but my understanding is that Josh doesn't recommend ultra high yield stocks, so I assume this is another one of those situations where you have taken his formula for return and applied it to your risky portfolio to come up with that conclusion.

If you really had a way to get a safe 17.6% going forward, you could be a billionaire by next year.

I will admit, however, your ability to make outlandish statements about your investment strategy and portfolio seems to be growing faster than 6% per year :o}

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Invest worldwide in reasonable,  growing dividends.

best,

Bill