The Best M1 Finance Dividend Portfolio Pie for Income Investors
ฝัง
- เผยแพร่เมื่อ 26 ก.ค. 2024
- Get the portfolio here: optimizedportfolio.com/go/div...
M1 Finance is extremely popular among dividend investors. Here I’m sharing what I believe to be the best M1 Finance dividend portfolio pie for income investors.
// TIMESTAMPS:
00:00 - Introduction
01:53 - Methodology and Discussion
04:20 - Why Not M1's Dividend Expert Pies?
05:51 - The Portfolio
06:06 - Disclosure
06:32 - Disclaimer
07:03 - Outro
// PARTIAL TRANSCRIPT:
I would suggest sticking around for the preliminary discussion before blindly investing in this pie to make sure it matches your strategy. That said, I hate when recipe websites tell a long story before putting the actual recipe at the very bottom of the page. So if you’re in a hurry, here's the portfolio pie: optimizedportfolio.com/go/div...
M1 Finance is extremely popular among dividend income investors, and rightfully so, with its intuitive interface, sleek mobile app, stock and fund screeners, zero fees, fractional shares, cheap margin rates, and automatic rebalancing. To be clear, I’m not a dividend investor, but I recognize that many investors, especially those in the FIRE movement (Financial Independence Retire Early), use dividends as regular income and thus attempt to ratchet up their portfolio’s dividend yield.
Unfortunately, for beginner investors interested in dividends, oftentimes this entails simply screening for the highest-yield stocks and ETF’s and throwing them in a pie, ignoring things like fees, AUM, liquidity, and most importantly, what that fund’s selection methodology or underlying index is. I always encourage people to focus more on asset selection and asset allocation than on chasing high yield per se. I would suggest assembling a dividend focus that still employs diversification across geographies and asset types to decrease portfolio risk; that’s what I tried to do here.
In constructing the best dividend portfolio pie for M1 Finance, I specifically focused on the following:
- Global diversification.
- Low fees.
- Sufficient AUM and liquidity.
- Exposure to multiple equity factors and styles.
- Diversification across asset types.
- 80/20 ratio of stocks to fixed income.
- Inflation protection.
- No individual stock picking.
- Potential for healthy dividend payments and simultaneous capital appreciation.
ETFs included:
15% SCHD
5% HDV
5% SPYD
10% VYM
10% VYMI
10% VNQ
5% VNQI
5% IDLV
5% VIG
5% DGRO
5% VIGI
10% SCHP
5% USHY
5% EDV
Read the blog post here: www.optimizedportfolio.com/m1...
Here's the pie: optimizedportfolio.com/go/div...
#dividends #dividendinvesting #m1finance #investing #incomeinvesting #stocks #stockmarket #fire #etfs
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Disclaimer: The information presented is not financial advice, investing advice, or tax advice; it is for informational and recreational purposes only. Investment products discussed are for illustrative purposes only. It is not a recommendation to buy, sell, or transact in any of the products mentioned. I try my best to provide accurate information, but I can’t guarantee 100% accuracy. Do your own due diligence. Past performance does not guarantee future returns. Investing in the stock market - especially with leverage - is risky. Read my lengthier disclaimer here: www.optimizedportfolio.com/te...
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Just added your pie. Thank you!
:)
Seems I may have an older M1 FIRE Mix with 13 positions and different % ratio. Do you still have a reference to that?
Do you have any idea which ETFS could be qualified as "Qualified Dividends" when tax season comes by?
Should be all of them except the REITs.
Well done.
Thanks!
Thanks bro
:)
would you still recommend this pie makeup, given recent Treasury data in the headlines/markets?
I don't try to time the market, especially based on headlines.
Thanks for posting this. I'm in middle of constructing my own multi dividend-focused etf pie. I think you have 3-4 too many ETFs, and I would include REGL because of its mid-cap focus and 20% annual div growth history. I would love to see your thoughts on this pie if you were to include a chowder minimum of 10 (starting yield + annual dividend growth rate over last 3-5 years). My pie's minimum chowder is 11 for inclusion. Some of them have only been around for 3 years, so you might have to project on those.
Some of these funds employ what are essentially Chowder-like screens for their constituent stocks. REGL is highly correlated with both VIG and DGRO but is vastly more expensive.
@@OptimizedPortfolio Thanks for the fast response. Did you run an overlap test on all these ETFs? I'm trying to keep mine from going above 25%.
@@tomsettles6873 No. There's definitely some overlap to be expected, since we're talking about only dividend stocks. I focused more on diversifying factor exposure, geographies, and asset type.
@@OptimizedPortfolio Agreed - Thanks
What are your thoughts on the covered call ETFs like JEPI, NUSI, QYLD and XYLD? These funds have great diversification and very high yield but maybe the upside in price appreciation is capped?
www.optimizedportfolio.com/qyld/
@@OptimizedPortfolio that was such a great review. thanks for validating with facts and figures the negative things I was thinking about QYLD.
@@mlo9534 Glad you found it helpful!
I see alot of comments from a year ago and I am just looking to jump into this pie now. Aside from the overall market downturn recently, how has this pie been working out for you people that started a year or two ago?
I know you didn't address this to me, Tim, but just remember that past performance does not indicate future performance. Best of luck.
@@OptimizedPortfolio Absolutely, understood about past performance.
What I was really hoping to hear was if there were any swaps anyone could suggest. For instance, multiple sites report that VNQI no longer pays a quarterly dividend as of 2022. Do you have a suggestion for a replacement slice for VNQI, recommend to just hold it for yearly dividends, and/or any other recommended updates?
I do plan to "set it and forget it" and just funnel money into the pie over time, but that just means I need to be even more careful about getting the proper allocations at the onset.
Greatly appreciate any (non-legally binding) advice!
Hello there. Some years have passes by, so I’d like to know if you still stick to this pie - or would make some adjustments? Cheers
Same
It all depends on one's goals and time horizon, I am investing for high yield, mostly using covered call funds to replace and enhance the income I gave up when I sold my duplex. There should be enough growth to outpace inflation, but I plan to reinvest dividends with 50% of my portfolio and use XYLD for current income. My wages haven't gone up, but rent prices have skyrocketed in my area. I see XYLD as an annuity where I get to keep the principal, it is more variable, but I have a pretty good cushion to help even things out. FIRE is my short term goal (1-5 years). I would like to at least be able to move to part time work within that time frame. I gave up the headaches of being a landlord and home owner for passive investments, and a chance to retire 15 years early.
Thanks for sharing. Best of luck.
Do you use a teleprompter. Your eye contact is perfect.
I do! I'd probably be even more of a rambling idiot without it!
How would this setup compare to the Boglehead 3 fund investment for long term investing?
QYLD - 15%
ITOT - 40%
QQQ - 38%
JNJ - 3%
QQQJ - 4%
Extremely different.
QYLD is best if you reinvest the dividends into growth stocks, its not very good on its own
What about using JEPQ for growth exposure in this portfolio?
Possibly, if you want covered calls. I'm not a huge fan of them, as I explained here: th-cam.com/video/KOPcFCS1Lyg/w-d-xo.html
I am a new investor and just started with M1 Finance. I really love the pie that you shared! Do you think it's worth splitting the pie? 90% John's Dividend Pie and 10% Ultra Aggressive Pie? Shift the percentage a bit or just go 100% into your pie? I know you are not allowed to give financial advice but I would love your opinion. I will be a long term investor and plan to live off dividends.
Thanks! If one is investing for the long term and doesn't need dividend income right now, then there's not much of a reason to focus on dividends right now.
I'm doing 90% growth, 10% dividends
I’m looking to passively invest long term 8-10 years. would this pie best achieve this goal?
8-10 years is not at all "long term."
@@OptimizedPortfolio thanks for the reply. what is long term? I’m extremely new to this 🙂
@@electronicfellows2113 Long term would be considered 20+ years. This pie is geared toward people aiming to use dividend yield as current income, but it's definitely not the worst choice for the situation you describe. If you're investing for growth over 10 years to only sell/withdraw after that time has passed, a diversified lazy portfolio like the Bogleheads 4 Fund Portfolio may better suit your needs: www.optimizedportfolio.com/bogleheads-4-fund-portfolio/
@@OptimizedPortfolio Also, with this high dividend pie, what would be the optimum investment time frame?
What is the difference between the bogleheads 3 fund & 4 fund portfolios? Which one is better (would provide highest return) if passive investing over 10-20 years? thanks!
do you think that this pie is currently overvalued? would it be best to wait for the next crash before lump summing into it? looking at the m1 finance chart for the last 5 years shows that it remains around $100 until very recent.
One could argue the market as a whole is "overvalued," but the valuation spread between Growth and Value is also as large as it's ever been, suggesting Value may be due for a comeback.
Also, no, the data says you probably should never sit on cash: www.optimizedportfolio.com/dca/
I would like an update on this pie.
What kind of "update?"
Hi I'd like an update on the 50% guaranteed CAGR Portfolio
@@Cwilly13ify Hah, if you find one of those, let me know and I'll borrow all the money I can to put into it.
If you would change anything about this dividend pie one year from now. Also would like a video about the ginger ale pie that you said you use for yourself.
Waaaay to many to manage. Why do this? Just pick like 4 and be done.
Different methodologies and subsequent risk factor exposures. With M1, not much to "manage" anyway unless a fund goes under.