Mark Map
@MarkMap4
30+ years experience in Investment Portfolio Management Science E Book "A Study of Income Sustainability . . . " https://tinyurl.com/yckmev96
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2/ Since 1986, a portfolio of small & large "value" stocks (via ETFs) and the Nasdaq100/QQQ has produced almost 2X the returns of the S&P500 and 4X the returns of the Total World Market Index, with equivalent risk, over ten rolling 30 yr periods Chart 1 tinyurl.com/5h9fvw3n .
1/ PLTR the story of the week. A basic insight : is in the portfolio of the Nasdaq 100 / QQQ.
6/ Past "catalysts" that promoted further market weakness were : - Bear Stearns / Lehman Bros. trouble / banking crisis - deflating tech bubble / 9/11 - price controls / OPEC oil crisis - Smoot- Hawley tariffs / shrinking money supply / bank failures
3/ 3rd years of those 5 year returns strings have produced average single-digit positive returns (+8%) with "some" losses.
2/ Since 1931, after the advent of double-digit decline years and intra-year periods produced by the S&P 500 ( most recent 2022 ), forward 5 & 20 year stock returns, especially "value" stocks, were substantial Tables 1 & 3 tinyurl.com/4x3wn7sd .
1/ So far, 2025 market action is typical of a "3rd" year after the occurrence of a "double-digit decline year".
5/ Whereas income produced via a sale of shares (and qualified dividends) process can exploit a 0% tax rate applied to an allotment of $ above the standard deduction - this being $94K for married couples. ( taxation must be considered with "high yielding" vehicles )
4/ - this using a sale of shares/dividends reinvested process ( "apples to apples" comparison ). Taxation-wise, high yielding vehicles' income distributions are generally characterized as "ordinary income" -'incurring a 15%~tax rate ( this applicable to "taxable accounts" ).
3/ When running an "apples to apples" income withdrawal comparison vs enticing high yielding vehicles, such as QYLD for example, we see that the gold standard portfolio was able to harvest a 5.5% annual income, accompanied by higher growth, over 10 years portfoliovisualizer.com/backtest-portf…
2/ Condition "e" of the strategy : - the portfolio has produced a "double-digit" gain for the year and my portfolio balance has ended the year higher than when I originally started my "income stage" tinyurl.com/2th9m4r6
1/ The "gold standard" income portfolio consisting of Berkshire Hathaway, Vanguard Value and Vanguard Small-cap value ETFs, and a simple income withdrawal strategy, has indicated a 6% income withdrawal for 2025 ! This is the same as for 2024.
I already own value stocks as an inflation offset. Table 1 tinyurl.com/2th9m4r6
2024 so far has met the criteria of a "positive low volatility year" * and will continue to be so until proven otherwise. Since 1940, 53% of all positive yrs have been low vol. * S&P years that have produced an intra-year drawdown of less than -5% ( measured month end basis )
4/ - making this one of the great "objectively & mechanically" stock selected" ETF portfolios of the modern era. And NVDA has been in the QQQ portfolio since 2005, so a long term QQQ investor has inadvertantly participated in NVDA's, along with other companies, huge gains.
3/ Holding this value stock and QQQ portfolio for a long enough time length (20+ years), has allowed for this cap weighting effect and "size and value factors" to work to their fullest extent -
2/ Since 1986, a portfolio of small & large "value" stocks and the Nasdaq100/QQQ has produced almost 2X the returns of the S&P500 and 4X the returns of the Total World Market Index over ten rolling 30 yr periods Chart 1 tinyurl.com/5h9fvw3n
1/ That's been the great thing about owning the QQQ . Over it's 38+ year history, the "capitalization weighting effect" embedded within the NDX has the "top" growth companies holding high % portfolio weightings for a number years, and moving "in and out" of the index.
1/ Again, it can be instrumental to hold small cap (value) stocks in concert with large value stocks and the QQQ - not only for cap appreciation potential, but for a hedge against the downside volatility produced by the QQQ.
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