tjh290633 wrote:
The above graph assumes that the starting incomes were equal. Were they?
No, they weren't Terry, but that wasn't really the point of my post, which was primarily to help illustrate how different people might be using the same word, '
better', to discuss completely different aspects of how they might actually
value a particular income-strategy, and also the
delivery of it over long periods of time..
Where some people might be wanting to concentrate on particular '
quantitative performance metrics' over a given time-frame, that view might clearly clash with other income-investors who might be
quite willing to give up a level of those '
quantitative performance metrics',
if by doing so they were able to maintain aspects of an income strategy
that might be more important to them, in terms of
predictability and
reliability of that underlying dividend income...
My use of the HYP1 and Basket of seven chart was primarily aimed at trying to clearly illustrate those points..
With that said though Terry, I also linked to a post by Arb, where he's recently updated his own income-comparison chart, plotting his income-per-unit of his HYP holdings against his income-IT holdings, which in my view painted an even more dramatic picture than the one we've discussed above -
https://www.lemonfool.co.uk/viewtopic.php?f=31&t=26214&start=120#p358283Later in that thread, Arb states that the yield from his HYP holdings roughly yield around 1% higher than his IT holdings historically, and I think that's also a good set of information, all things considered, because it gives a real-life indication of the sort of yield-difference that might be given up by income-investors who might actually
be happy to trade HYP volatility away, for a much more
predictable and
reliable retirement income-stream...
Please note, however, that given the recent jolt in Arb-HYP performance on the above post, it's not clear if that 1% HYP yield benefit
still actually exists at this time, which is of course very important when considering these long-term comparisons...
Cheers,
Itsallaguess