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re: Some common myths about the markets that are untrue and/or 99% do not know

Posted on 4/16/24 at 8:27 pm to
Posted by slackster
Houston
Member since Mar 2009
85465 posts
Posted on 4/16/24 at 8:27 pm to
quote:

The thing about dividends is that it ends up being so little really unless you have a million in your investing account which no one my age does. The theory is that dividends are not a net positive. They are taking cash out the balance sheet to pay investors which will lower market cap by whatever they take out. Whether that is actuality based on studies, I dont know.


Reinvesting dividends generates typically around 50% more growth over time. There are also long stretches where dividend payers and growers substantially outperformed growth stocks. The fact that that hasn’t been the case for a decade may suggest some reversion to the mean eventually.
Posted by Saunson69
Member since May 2023
1978 posts
Posted on 4/18/24 at 3:01 am to
"Reinvesting divdends generates typically around 50% more growth over time?"

What does that mean? Why would I reinvest my dividends in the company? It's the exact same if they just left it in the stock and didn't pay dividend. Over time is very vague too, over 10 years or what? Specifics matter when talking % gain.

"There are long stretches where dividend players outperformed growth stocks"

Anything to back that up?
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