Dividends are not a good thing in a portfolio

[west42]

I guess you’ve found the secret. Don’t forget about us when you become a billionaire.

"Portfolio managers hate him."

Also, I checked two of my stocks, there's no pattern whatsoever. TS is smoking something.

 

[bad seed]

lol TS thinks he stumbled onto some brilliant insight outsmarting the finance industry.

dividend stocks play an entirely different role in your portfolio than growth stocks. Read up on asset allocation before shitting out these dumb "insights".

 

[Cooz]

And you know why? It's because I said so. Nah, jk'ing, but seriously they are meaningless. As soon as you get your dividends the value of the portfolio falls like hell. I always thought Dividends are great but in reality they arent since the value of your portfolio will automatically fall.

One of my dividend stocks is nearly up 200% TRTN

 

[ConnorMacGregod]

One of my dividend stocks is nearly up 200% TRTN

Wow how did you find that stock? It has been up nearly 300% in a year. you think it will continue to go up?

Can you give me tips on stocks or trading if you trade? I just have a mutual fund portfolio but would love to learn how to trade.

 

[Mr Mojo Lane]

Invest in fur coats and swag. Its better than high yield stocks and ETFs

 

[rj144]

Wow how did you find that stock? It has been up nearly 300% in a year. you think it will continue to go up?

Can you give me tips on stocks or trading if you trade? I just have a mutual fund portfolio but would love to learn how to trade.

Apple pays dividends and that stock always has a good return.

It's not hard to trade. Do your research and diversify across different sectors. It's common sense.

 

[Mr Mojo Lane]

Warren Buffett is a total dipshit

 

[newcastleman]

I only have experience in Hong Kong where I live, but I believe that stocks with a good dividend are attractive to fund houses, pension and life insurance companies, because they require yield for their products.
At least the dividend will add some support and momentum to the price.
When stocks go ex dividend, they often fall in price immediately, but not always. Selling them before the ex date in the hope of getting them back cheaper is always a gamble, but can be an effective strategy.
Recently I've been heavily buying shares in HSBC, 1 of the top banks in the world. It pays a quarterly dividend, still yields over 5% annually, and has gone up in price about 50%in the last year. The bank itself has been aggressively buying back its own shares, which makes me confident its upward trend will continue.

 

[newcastleman]

I trade shares, but never trade mutual funds, which are more suited to holding long-term.

 

[RockstarChris]

if i need dividends i will just rob the TS. meanwhile i will just netflix and chill with my dog.

 

[pakimahi]

Try closed-end funds. EDF has been good to me, fat dividend and respectable appreciation.

 

[Pwent]

Well arent you the smartest person on Sherdog ever. Let me guess your a doctor or Lawyer right?

lel

 

[HIMBOB]

In America its kinda true seeing they are double taxed. In Australia the tax is counted through franking credits.

Also sometimes the stock drops less then the div. Was recently waiting for a div payment on a hybrid, paid its $1.50 div and dropped about 70cents....cunts.

Really depends who you feel will use the money better. If the company can put it to effective use they should have it, if not you should get it as dividends.

Also older people live yield stocks because it gives them regular cash flow.

Tldr. Depends but usually good imo.

 

[HIMBOB]

That's patently false

Dividend growth is GOAT

Neh.
Earnings growth is the one true king.

 

[Pwent]

even though the TS had completely different reasoning, a lot of investors avoid dividend stocks, because it means the company is not reinvesting its profit, meaning it wont experience as much growth. The logic is, if the market is ripe for growth, then the company would want to reinvest for growth, so they believe dividends=stagnant growth.

but lots of them grow anyways, just saying I opened the thread expecting the TS to discuss this and became disappointed

 

[HIMBOB]

Also if you take a look at the picture I have here, where I researched PrimeCap Admiral fund you can see they pay a yearly Dividend of about 1.20% but their value drop by 4-5% of their value. So realistically you are losing about 3% by holding on to the fund on the day before dividends are paid and a few days after.

12/16/13 and 12/19/14 are the days dividends were paid btw. Then it dips by alot.

This happened from all the years I checked. From 2013,2014,2015, 2016. You are better off selling it on the day before dividends are paid basically and buy cheap a few days later.

Dividend harvesting funds do the exact opposite and the one's i have seen do okay. By okay i mean average for the market.

Fyi the terms you are looking for are.
Cum-dividend = a share that is about to assign a dividend. Ie you own a share when it is Cum-dividend you get the div.
Once the dividend is assigned it becomes ex div and the price drops (even though the div is actually paid a fair bit later).

In theory a cum div stock is equal in value to a ex div stock plus a dividend.

 

[HIMBOB]

yeah I understand that. but what you dont seem to get is that the percent you get from dividends is lower than how much the value of each shares drops.

Say you have with 10 units at $10 each and it pays $1 in dividends but loses $2 in share value the day after dividends are recorded then you end up with 11.111 units at $8 a share or $88.88 in your portfolio instead of $100. I gave you a picture of how that happened.

Why dont you do this, give me the name of a fund and I will show you that the percent that fund share value drops is higher than the dividend it payed out on its recorded day. You can choose any mutual fund name. Proof me wrong.

"the percent you get from dividends is lower than how much the value of each shares drops"

This is true about half the time and not true about half the time.

You could make money using this strategy but my bet is you will lose out roughly as much as your brokerage costs.

No knowledgeable person would deny what you have seen is true. But they would also know that if you increased your sample size you'd see its near totally random.

 

[HIMBOB]

even though the TS had completely different reasoning, a lot of investors avoid dividend stocks, because it means the company is not reinvesting its profit, meaning it wont experience as much growth. The logic is, if the market is ripe for growth, then the company would want to reinvest for growth, so they believe dividends=stagnant growth.

but lots of them grow anyways, just saying I opened the thread expecting the TS to discuss this and became disappointed

The classic example is utilities or something such as a toll road.

They can't use such a small amount of funds effectively so should return them to shareholders.

 

[HIMBOB]

I only have experience in Hong Kong where I live, but I believe that stocks with a good dividend are attractive to fund houses, pension and life insurance companies, because they require yield for their products.
At least the dividend will add some support and momentum to the price.
When stocks go ex dividend, they often fall in price immediately, but not always. Selling them before the ex date in the hope of getting them back cheaper is always a gamble, but can be an effective strategy.
Recently I've been heavily buying shares in HSBC, 1 of the top banks in the world. It pays a quarterly dividend, still yields over 5% annually, and has gone up in price about 50%in the last year. The bank itself has been aggressively buying back its own shares, which makes me confident its upward trend will continue.

Unless its funding those buybacks with debt which might increase in cost over the long term.

Low interest rates = buy backs.

It will increase earnings per share but it becomes more risky thus extra return should be expected.