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Dividend play for long term (30+ yrs) vs Index
Posted on 1/20/14 at 3:39 pm
Posted on 1/20/14 at 3:39 pm
Do dividend growth funds outperform regular index funds for those with a long investment horizon?
Ex: Would someone with 30 yrs until retirement benefit from investing in VDIGX over VOO?
opinions?
Ex: Would someone with 30 yrs until retirement benefit from investing in VDIGX over VOO?
opinions?
3
Posted on 1/20/14 at 3:45 pm to DucksnBucks37
Franklin income fund. Most dividend plays will not beat the upside of its benchmark but instead gives you more downside protection. We use frankin income fund quite often bc it's got a great results history great team overseeing it and monthly dividends. Average annual clip is around 9 percent since inception if I'm not mistaken, don't quote me on that though.
This post was edited on 1/20/14 at 3:49 pm
Posted on 1/20/14 at 4:11 pm to roguetiger15
I have some FKINX. Love the monthly dividend. I guess I'm just wondering if dividends will work out better long term than a low fee index fund (VOO) in terms of overall yield.
Anyone have any suggestions for Dividend play?
Anyone have any suggestions for Dividend play?
Posted on 1/20/14 at 11:42 pm to DucksnBucks37
S&P 500 Aristocrats
Posted on 1/21/14 at 6:40 am to DucksnBucks37
Like all discussions like this, it'll depend on what you expect from the market.
If you think the next 30 years will be humdrum years in the market...not stellar growth but not totally depressing either, dividend growth funds will be a strong contender.
In a bull market setting, dividend growth funds will lag behind.
If you think the next 30 years will be humdrum years in the market...not stellar growth but not totally depressing either, dividend growth funds will be a strong contender.
In a bull market setting, dividend growth funds will lag behind.
Posted on 1/21/14 at 6:45 am to roguetiger15
Do you pay a load on the reinvested dividends?
Posted on 1/21/14 at 7:53 am to Volvagia
Not on FKINX
Posted on 1/21/14 at 9:38 am to DucksnBucks37
So, I took a quick glance at FKINX and did not like the fee structure....is there a fund that mirrors FKINX sans the fees?
Posted on 1/21/14 at 9:50 am to DucksnBucks37
What has been said by previous posters is pretty spot on.
Thought I would share a bit on the importance of dividends to total return.
If you look at the Ibbotson year book tables for Large Company stocks $1,000 invested in the index (no div reinvestment) in 1925 grew to $98,560 by 2011.
$1,000 invested in the index with dividends reinvested grew to $2,982,240 over the same period.
Also, purchasing direct divided paying stocks with a long history of raising dividends and strong company models can be used to effectively annuitize starting principle at the average dividend rate. This can potentially also lead to strong capital appreciation over a long time period (although you will be subject to market volatility, esp in the short term).
Thought I would share a bit on the importance of dividends to total return.
If you look at the Ibbotson year book tables for Large Company stocks $1,000 invested in the index (no div reinvestment) in 1925 grew to $98,560 by 2011.
$1,000 invested in the index with dividends reinvested grew to $2,982,240 over the same period.
Also, purchasing direct divided paying stocks with a long history of raising dividends and strong company models can be used to effectively annuitize starting principle at the average dividend rate. This can potentially also lead to strong capital appreciation over a long time period (although you will be subject to market volatility, esp in the short term).
Posted on 1/21/14 at 9:58 am to Maderan
If you want simplicity, diversification, and low fees (key imo), go with Vanguard's funds.
I personally prefer targeting div yielding stocks and creating an entry position when the stock looks depressed. Buy more over time whether it goes up or down unless the company is in terrible financial shape.
Reinvest those dividends as well... do that over a 20 year period plus, and the mathematics really begins working in your favor.
I personally prefer targeting div yielding stocks and creating an entry position when the stock looks depressed. Buy more over time whether it goes up or down unless the company is in terrible financial shape.
Reinvest those dividends as well... do that over a 20 year period plus, and the mathematics really begins working in your favor.
Posted on 1/21/14 at 1:47 pm to austiger
SCHD is one I'm heavy in. Thoughts?
Posted on 1/21/14 at 4:30 pm to DucksnBucks37
where's ThaBigFella when you need him
Posted on 1/22/14 at 8:10 am to jimbeam
Fkinx is the A share which we never use, look at fcisx. That's the c share
Posted on 1/22/14 at 8:31 am to roguetiger15
quote:
Fkinx
Holy crap, I just looked at this fund it got smoked in 2008. With a name like "income" I was expecting a little less of a loss there.
Posted on 1/22/14 at 7:02 pm to Janky
Did it beat it's benchmark?
Posted on 1/22/14 at 8:30 pm to roguetiger15
who cares about a benchmark? The benchmark lost 35% of its value or whatever it was, but You only lost 30.5%. What a deal. My point being, that a anyone that needs to be in a cons. all. Fund does not to be subject to that big of a loss.
This post was edited on 1/22/14 at 8:36 pm
Posted on 1/22/14 at 9:06 pm to Janky
We care about benchmarks. That's how you judge any investment vehicle on how it performs relative to its peers. I guess 10.47% ave annual returns since 1948 isn't enough for an income/dividend strategy with downside protection for you. Half of the portfolio is in equities, of course it took a hit in 2008, along with everything else.
This post was edited on 1/22/14 at 9:08 pm
Posted on 1/22/14 at 9:12 pm to roguetiger15
Downside protection? It lost 30%. How is that for downside protection? Hell, the S&P 500 which is 100% equity loss 38% and you are bragging about only losing 30% with 50/50?
Posted on 1/22/14 at 10:27 pm to Janky
quote:
Downside protection? It lost 30%. How is that for downside protection? Hell, the S&P 500 which is 100% equity loss 38% and you are bragging about only losing 30% with 50/50?
I don't want to get in a pissing match here, rarely post much, and don't know the players in this thread, but what do you suggest? So far you've attacked another, but offered no alternative. I don't have the time to manage my money the way I should which is something I'm not proud of, so I read these threads sometimes to get ideas. It frustrates me that nearly every thread turns into someone trying to tear down someone else. It's a message board, it's inevitable, but be constructive....give me something better.
Posted on 1/23/14 at 6:00 am to TigerBite
I was shocked that FCISX was down that much in 2008. For a balanced/conservative allocation fund that is not very good. It has a beta of 1.0%, .97% and 1.08% for its 3,5,10 year. Downside protection? Hell, it has a negative 10 year alpha. Returns?
FCISX
1 year-13%
3 year- 9.62%
5 year- 14.78%
10 year- 6.82%
Return since 1/1/08- (-5.4%)
BERIX
1 year-15.83%
3 year- 8.83%
5 year- 13.06%
10 year- 7.08%
Return since 1/1/08- 16.3%
3,5,10 year beta- .60, .53, .56
2008 return- (-10.2%)
My point is why take all of that risk for the little extra return? I certainly don't want one of my more conservative holdings to lose a third of its value in a major correction. I have other balanced funds I use as well, that even though the returns are not quite as good, the risk level is much lower. Remember for every dollar you make, you make one dollar. But for every dollar you lose, you need to make almost $2 to get back to even.
Sorry if I came off as attacking last night, it was not intended as such.
FCISX
1 year-13%
3 year- 9.62%
5 year- 14.78%
10 year- 6.82%
Return since 1/1/08- (-5.4%)
BERIX
1 year-15.83%
3 year- 8.83%
5 year- 13.06%
10 year- 7.08%
Return since 1/1/08- 16.3%
3,5,10 year beta- .60, .53, .56
2008 return- (-10.2%)
My point is why take all of that risk for the little extra return? I certainly don't want one of my more conservative holdings to lose a third of its value in a major correction. I have other balanced funds I use as well, that even though the returns are not quite as good, the risk level is much lower. Remember for every dollar you make, you make one dollar. But for every dollar you lose, you need to make almost $2 to get back to even.
Sorry if I came off as attacking last night, it was not intended as such.
This post was edited on 1/23/14 at 6:26 am
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