quote:
For an average holding period of 1 year, dividends accounted for 27% of total returns for the S&P500 since 1940. If we increase the holding period to 3 years, dividends account for 38%, 5 years it increases to 42%, over a 10 year period it rises to 48%, and with a 20 year holding period dividends account for some 60% of total returns. It is important to note, too, that here we are just looking at the S&P500 as a whole and not focusing purely on companies that actually pay a dividend. If we did, we think these results would likely be even more striking.”

As noted in the above article, time frame or holding period matters. So that we can make more of an apples to apples comparison, can you provide data which shows that companies within the S&P 500 that did not pay dividends outperformed those that did?

Since longer term investors aren’t typically “traders”, choose some reasonable holding period, say 3-5 years. Opinions on either side of the issue are just opinions… if no data is provided. I’m not here to be argumentative, just asking if you have actual data to legitimize your opinion?

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Posted by secfballfan

Member since Feb 2016

3189 posts

Posted on 4/17/24 at 9:45 am to Jag_Warrior

Ok, lets look at the famous FANG stocks that accounted for about 70% of the S&P 500 moves over the past 3 years- Facebook/Meta pays a tiny dividend 0.4% yield, same with AAPL 0.56%, Netflix, Amazon, Google zero. Oh and new star NVIDIA- yields a whopping 0.02%. Look I am not saying dividend are bad- but when companies are booming and at their best, you do not want them giving you money back- you want them putting it back in the company.

One ore way to look at it- do you want other people telling you when to buy or sell stocks? When a company pays a dividend (especially a large one) they have decided for you that you should reduce your investment in them.

My OP came off as arrogant, I apologize for that. I respect most of your points, but again feel you are missing the logic here. And look no one knows the "real" person behind the usernames, is it maybe possible I am not an expert in this, sure, but maybe I am. Maybe I once reported to Warren Buffett at one of his subsidiary companies and am a CFA who overseas multi billion $ portfolios with an MBA from a top 20 school. Two truths and a lie?

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