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bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
12170 posts

Just a reminder that investing doesn't have to be all that complicated
Dividend ETFs

quote:

Dividends have long been a favorite of investment gurus from Warren Buffett to late Vanguard Group founder John Bogle, and it's easy to see why. Who wouldn't want to generate a steady income stream from their stock portfolio?




OleWarSkuleAlum
Alabama Fan
Member since Dec 2013
8226 posts

re: Just a reminder that investing doesn't have to be all that complicated
Dividends is a losers strategy. You leave too much on the table when you can buy something like ITOT and share the market return while at the same time earning dividends.

ETA: unless you’re retired and you’re using it as an income source then a dividend play is more acceptable although it should still only be a portion of your portfolio.
This post was edited on 11/6 at 2:38 pm


Boring
Member since Feb 2019
339 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

Dividends is a losers strategy


Source?

Tax issues are the biggest reason I've stayed away from dividend stocks. If I was nearing retirement age though, I'd rapidly be shifting my portfolio in that direction.


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80
DaleBrown
LSU Fan
Slidell la
Member since May 2019
1176 posts

re: Just a reminder that investing doesn't have to be all that complicated
Ever since I started buying the spy and qqq on dips, I have done much better than I used to do. No more need to pick winners.

I admit that I still like to dabble on a stock here or there but generally, I just buy the market


bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
12170 posts

re: Just a reminder that investing doesn't have to be all that complicated
Y’all DO know what an ETF is right?

I’m not talking about just picking F, CTL, and SO...


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31
SouthMSReb
Ole Miss Fan
Member since Dec 2013
2599 posts

re: Just a reminder that investing doesn't have to be all that complicated
Dividends is a losers strategy.



"The S&P 500 Dividend Aristocrat index was launched by Standard and Poors in May 2005, and has historically outperformed the S&P 500 index with lower volatility over longer investment time frames. For example, over the past 10 years through the period ending September 30, 2019, the S&P 500 Dividend Aristocrat index has returned 14.67% on an average annual basis whereas the S&P 500 index has returned 13.24% annually during that same period. The risk factor commonly called the standard deviation of the S&P 500 during this same 10 year period was 12.55% while the Dividend Aristocrats' was 11.28% (10.12% lower)."


VerlanderBEAST
Michigan Fan
Member since Dec 2011
17295 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

"The S&P 500 Dividend Aristocrat index


If NOBL isn't at least 50% of your roth you might as well be burning money


bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
12170 posts

re: Just a reminder that investing doesn't have to be all that complicated
Am I missing something? This NOBL etf shows a sub 1.5% dividend...

I’m getting 3.3% from VYM.

Is it overall gains we’re looking at?


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TigerDeBaiter
LSU Fan
Member since Dec 2010
7923 posts

re: Just a reminder that investing doesn't have to be all that complicated
Can you ban yourself please? You’re a complete laughingstock and waste of space.


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90
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USA
Member since 2001
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baldona
Auburn Fan
Florida
Member since Feb 2016
10904 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

Dividends have long been a favorite of investment gurus from Warren Buffett


Dividends are great and have their time and place, but this is a BS statement. Buffett didn’t make his money off dividends he made his money off of growth.


SouthMSReb
Ole Miss Fan
Member since Dec 2013
2599 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

Dividends are great and have their time and place, but this is a BS statement. Buffett didn’t make his money off dividends he made his money off of growth.



It's both. Berkshire made 3.8 billion dollars off of dividends last year...

Ten largest holdings:
1- Apple (dividend)
2 - Bank of America (dividend)
3 - Wells Fargo (dividend)
4 - Coca Cola (dividend)
5 - American Express (dividend)
6 - Kraft Heinz (dividend)
7 - US Bancorp (dividend)
8 - JPMorgan (dividend)
9 - Moodys (dividend)
10 - Bank of NY (dividend)

I don't think it's just a coincidence that ALL of his ten largest holdings pay dividends.


baldona
Auburn Fan
Florida
Member since Feb 2016
10904 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

It's both. Berkshire made 3.8 billion dollars off of dividends last year...



Certainly, but they have what it looks like is $708 billion in assets? So that's 0.5% off of dividends? That's just with a quick google search so I may be off?

Another quick search shows Berkshire holding about 252 million shares of Apple. Apple has gone up 60% ytd from 157 to $260. If their holdings are correct, they've made over $25 billion on Apple's Growth.

I'm not arguing that Dividends are bad as they are great. My only point is that it is not fair at all to say that Buffett got rich off of dividends, that's a very small portion of his earnings overall.


SouthMSReb
Ole Miss Fan
Member since Dec 2013
2599 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

Certainly, but they have what it looks like is $708 billion in assets? So that's 0.5% off of dividends? That's just with a quick google search so I may be off?

Another quick search shows Berkshire holding about 252 million shares of Apple. Apple has gone up 60% ytd from 157 to $260. If their holdings are correct, they've made over $25 billion on Apple's Growth.

I'm not arguing that Dividends are bad as they are great. My only point is that it is not fair at all to say that Buffett got rich off of dividends, that's a very small portion of his earnings overall.


Gotcha. Yes, I'd agree that the "growth" has added more cumulative value to his wealth. However, people often conclude that you can't get "growth" from dividend stocks and thats simply not true.

^^ By the way, i'm not saying you implied that.


deeprig9
Georgia Fan
Member since Sep 2012
36803 posts

re: Just a reminder that investing doesn't have to be all that complicated
I am heavy in div stocks and you absolutely can gain equity. Whenever one of them is taking a shit, you pick up more.


CivilTiger83
Clemson Fan
Member since Dec 2017
1960 posts

re: Just a reminder that investing doesn't have to be all that complicated
quote:

Dividends are great and have their time and place, but this is a BS statement. Buffett didn’t make his money off dividends he made his money off of growth.


This is correct.

Buffett has for years said he favors putting money back into projects that grow revenue or improve efficiency over dividends. The closest he gets to dividends are stock buybacks due to tax efficiency.


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mrgreenpants
Ohio State Fan
paisaland
Member since Mar 2018
280 posts

re: Just a reminder that investing doesn't have to be all that complicated
just an opinion..

but dividend stocks in general tend to be the better value holdings with "controlled" volatility.

if you know immediately before/after ex-div date there will usually be a run ups and then drops in price(equal to dividends)...plus the normal stress/opportunities around earnings...then you can trade accordingly.

helpful for scrapping that 2-3% every month


biggest negative.. this style is not the most tax efficient (will need an accountant)


baldona
Auburn Fan
Florida
Member since Feb 2016
10904 posts

re: Just a reminder that investing doesn't have to be all that complicated
The somewhat under stated benefit of many high dividend stocks is they are often ‘safer’ picks. There is often less volatility because they pay a higher dividend often times due to not needing the money to invest back into the company.

Therefore the risk in a major decline in the stock price is lower. Many retirees like them because they can have a higher stock allocation due to that reason. This is another reason why guys like Buffett like them.


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Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
1184 posts

re: Just a reminder that investing doesn't have to be all that complicated
Exactly. And they've also proven to be a major contributor to total returns for both the S&P 500 and the DJIA:

quote:

From January 1926 to December 2008, the S&P 500 Index (and its predecessors) delivered an annualized total return of 9.69 percent per year. The shocking aspect of that is that over those 83 years, price appreciation (rising share prices) accounted for only 5.5 percentage points of that 9.69 percent. Dividends actually accounted for the remaining 4.19. In other words, dividend income comprised 43.27 percent of the S&P’s returns.

The numbers from the Dow paint a similar picture. From January 1, 1930, (about two months after the crash of 1929) to December 31, 2008, the cumulative return on the Dow was 5,914.64 percent or 7.96 percent on an annualized basis. Price appreciation accounted for just 4.62 of that 7.96 percent points, and dividends accounted for the other 3.34. Looking at it another way, dividend income comprised about 41.96 percent of the Dow’s total returns.


Dividends’ Contributions to Returns


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