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re: Beginner investors. My 2 teen kids.
Posted on 4/5/23 at 7:29 pm to TorchtheFlyingTiger
Posted on 4/5/23 at 7:29 pm to TorchtheFlyingTiger
quote:
Dividends generate taxable events whether desired or not. Picking individual dividend stocks is riskier than index investing and diversifying across hundreds or more companies. Dividends just reduce underlying value of stock by distributing to stock holders. I'd rather choose when to sell and invest in companies that use profits to grow my investment. Please dont teach your kids to chase dividend yield its a short sighted approach for those that think it's better to never sell shares.
Dividends provide an income stream. You can't benefit from a non dividend stock unless you sell it. Which isn't a bad move but now it's gone.
Posted on 4/5/23 at 8:51 pm to Bestbank Tiger
quote:
Dividends provide an income stream.
True. And also, dividends have made up approximately 32% of the returns of the S&P 500 since 1926. Especially as one advances through the different stages of life, shifting the asset allocation more toward income production (without chasing yield) is probably a wise move.
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