patrick.net

zesta says

RentingForHalfTheCost says

PG, MCD, GE, KO, WMT, COP and JNJ. Doesn't get much safer than that.

The mix of those stocks is probably down 10-15% since Nov 2007.

Go ahead and check. Up about 50% collectively.

RentingForHalfTheCost says

zesta says

RentingForHalfTheCost says

PG, MCD, GE, KO, WMT, COP and JNJ. Doesn't get much safer than that.

The mix of those stocks is probably down 10-15% since Nov 2007.

Go ahead and check. Up about 50% collectively.

You can't use COP because it split off PSX and together is up over 50%. GE is a new addition just last year into my fold. The others are all doing well over the last 5 years. Remember, I don't care for appreciation. Rather if they just stay stable and keep increasing the dividend each year.

http://finance.yahoo.com/echarts?s=KO+Interactive#symbol=ko;range=5y;compare=jnj+mcd+pg+wmt;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

RE nowdays = investments. Fed injects 40B MBS monthly. Now, who is really buying these homes?

Interest rates at 30 year lows.

Sales up, prices up.

Not rocket science, just market forces.

robertoaribas says

in a nonvolatile time, that strategy will work; With high volatility, not so much...

comparing a strategy with such a high beta to home ownership today, with prices under rent in many areas, is completely ridiculous.

Agreed, but in my area rents are still much cheaper, so I'll take the stock approach. As a renter I have more capital to use towards this strategy. If renting was cheaper then I would probably favor housing. However, here it is not by a long shot.

The volatility can be combated with picking companies that have proven to weather storms before. The ones I mentioned have been through it all and have managed to raise dividends over and over. That is no guarantee that they will continue, but it does add comfort. Like I said, if it rockets up, I win (just not big), if it sinks I use my free cash flow from being a renter to keep loading up. Works for me.

SFace says

A homeowner's working capital is significantly more than renters.

For me it is the reverse. If I bought into the same level of houses I have been renting I wouldn't have any working capital. A typical bay area house in a safe area with good schools puts you into about a 6-7K/mth expense. How is that increasing your capital significantly?