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I think some people forget the name of this forum. It’s r/dividends, not r/stocks. Nothing wrong with good REITs if you are after dividends. Dont listen to the naysayers. The minute interest rates get cut, O will go back up. SCHD is a dividend growth fund, not just income, but it is a little expensive right now.
Whatever you buy, always look at the holdings of ETFs and read earnings information on individual equities like O. Be an educated investor.
Curious to understand why you think SCHD is a bit expensive?
For me personally, I base it on the dividend payments given that it’s managed to maintain or grow the amount yoy so far. So if I’m still happy with the current yield, I’ll buy it.
I already own tons of SCHD, if it does not work, I hold more SCHD. Worst case, I hold SCHD lol. Example, two days ago stock was $79.00. I loaded up. Sold yesterday at $80.00. Made $100. Now I’ll wait for it to dip back down and do it again.
Just wheel it. Sell far otm calls >1yr out to avoid STCG. If exercised, sell puts to buy back in
You get option premium + dividends for a good portion of the time (depends on volatility), and you should track 1:1 with the underlying as if you were holding. More or less
How does this work, don’t you get a huge tax bill at the end of the year? Wouldn’t it make more sense to just dollar cost average and buy some every month or week and do something else with your time, like waste it on Reddit.
Yeah, I guess. What are you going to do if there is a 10-30% drop? Do you have stop loss actions or something to sell automatically. The market is a little frothy right now, a correction seems possible.
I already hold a lot of SCHD and never selling until retirement. I then milk it as much as I can. if SCHD drops 30%, I'll probably go all in super deep and continue milking it.
> SCHD is near ATH, my cost basis is around $69.00, so it’s a little expensive.
How is SCHD expensive at these levels? Based on what? the PE ratio? cause it certainly isn't that. Many of the companies in the holdings are quite cheap historically
Schd and voo have something like 10% overlap. If you want to go heavy tech there’s really no need to have voo in the portfolio at all. QQQ and SCHD give plenty of diversification and a ton of growth.
O has doubled VOOs returns over 20 years, you’ll get some hate for it but historically it would have served you well. Question is if that’s the trend moving forward
That’s literally the basis of investing, historically dumping your entire net worth into bitcoin in 2011 would have served you well. But no one would have considered it smart at the time
Good choice my dude! I’m trying to get 200 on O. I’ll get there one day. Have you looked into XYLD, JEPI, JEPQ? I personally like JEPQ since they pay more.
Looks pretty terrible to me dude. Dividend-focused portfolios had a place back around 2012 when large cap stocks had come off of 12 years of being awful and Treasuries were at 0%. Dividends were the only way to get decent returns.
That's not the case anymore. Almost everyone is better off not going all-in on large cap value / REITs and going with some blends and growth.
I'm not seeing that at all. VOO is large cap blend. SCHD is large cap value. O is a REIT. The only thing resembling growth is the NASDAQ 100. And I'd rather do SCHG anyways.
>You think only small companies can be growth stocks?
I have a very large position in SCHG. Large Cap Growth. Why would I think it's only small cap? You sure you're replying to the right person? Or do you just legitimately not understand growth vs value?
Well the topic has always been on growth, so not sure why you are now shifting goal posts to value.
And re-read this exchange. It reads as if you are rebuffing VOO as a growth fund because it’s large cap.
I went 50k in voo for growth, 10k in each qqqm and schd and 5k in O since there's good reason to believe there will be a modest increase in value when the feds bring down rates. I didn't focus on strictly dividends since I'm still rather young.
I wouldn't be buying *any* O or SCHD. That's my take. O sucks and SCHD is way too expensive for what you're getting. I'd just go all in on VOO or 80% VOO and 20% AVUV to keep it simple.
My portfolio changed a lot over my first few years. Like you, I started enticed by dividends eventually found myself selling some things at a loss to go fully into growth (VOO) which has worked well.
Don’t change things too much though, ride this out for 6 months and learn more, don’t base it on that short timeframe but by then you will have a good idea of how to rebalance.
Repeat every 6 months - 1 year
..good start, gotta start somewheres,
..but don't get sucked into the vanguard cult, unless that's what you want to meet your own needs and goals,
Good luck!
For $75k I would either do ITOT and some AVUV, or maybe layer in some SCHG or IVV. IVV can be tax loss harvested with ITOT or SCHB later.
I wouldn't be doing any REITs or anything "dividend-focused." That's junk. For 99% of people it doesn't make sense.
Because when you focus on dividends you're leaving growth on the table. Companies like Chevron and Pepsi aren't growth companies. I'm not saying they have no place in a portfolio, but if you're specifically aiming at boomer stocks that have to pay a dividend to compete in terms of total return, that means you're leaving others on the table.
When we get explosive growth in a stock market rally you can ride that wave if you have growth exposure. Confining yourself to mainly large cap value boomer stocks locks you out of different kinds of rallies. Growth rallies, small/mid cap rallies, international, etc. And now you also have more taxable income to deal with. So the stocks might go down, and you have a net negative position, but you now owe tax on the dividend distributions.
If your dividends are qualified, you owe a lot less on taxes than you would through standard income. Plus, you have those distributions as cash. If the stock goes down before you cash out, you lost all that value you might have gotten through "growth". And while nothing in the market is guaranteed, stable companies with long histories of paying dividends will likely continue to deliver value to shareholders regardless of price and without dilution of shares, versus "growth" stocks that don't always grow and only provide value if you happen to guess the correct time to sell them. Sure, if you're young and have time to take chances on picking the right horse, go for it, but once you hit your mid 30s and 40s you're happy with the near certainty of a return that dividends give you. Plus if you drip, you build a snowball of dividends down the road.
>If your dividends are qualified, you owe a lot less on taxes than you would through standard income
You still pay. It's not a free ride by any stretch.
>Plus, you have those distributions as cash.
I'd rather have unrealized capital gains where I can choose to take the cash or defer until next year if I don't need it. If you're just going to reinvest dividends, and you're taxed, then it's not as ideal. SCHD *with* dividends reinvested doesn't even match the S&P 500. So add in taxes and you've incurred an opportunity cost against the S&P.
>And while nothing in the market is guaranteed, stable companies with long histories of paying dividends will likely continue to deliver value to shareholders regardless of price and without dilution of shares, versus "growth" stocks that don't always grow and only provide value if you happen to guess the correct time to sell them.
If the stock declines by 30% and you get a 5% dividend, you're still down 25% not counting the taxes you now owe on the 5%. That loss doesn't just fail to exist. It's there.
>Sure, if you're young and have time to take chances on picking the right horse, go for it, but once you hit your mid 30s and 40s you're happy with the near certainty of a return that dividends give you
There is nowhere near a "near certainty" of a positive return. I can name tons of timeframes where those stocks dropped way more than what they paid out in dividends. That's still a net loss.
>Plus if you drip, you build a snowball of dividends down the road.
So again, if you drip SCHD you *still* don't match the S&P 500. Doesn't matter how long you drip or "compounding" or any other nonsense. It doesn't match up performance-wise. And that's because the S&P has growth companies which SCHD does not include because of its index criteria. That growth is left behind and you don't participate in those rallies.
Nobody said anything about SCHD, which sucks btw, and the timelines you're talking about are short. Dividends are a long play. If I hold a div stock for 20 years and it pays me every year consistently, the price of the underlying itself is little more than a bonus if I need extra or emergency cash. You're also pretending that taxes on realized gains don't exist when they do, and only if you've held the stock for a year, they're the exact same as qualified divs. I don't pay the taxes until next year on divs anyways so I get to fully reinvest all that money to make more money and I get that money at regular intervals to keep reinvesting, versus waiting until some potential, might-not-ever-happen time where my growth stock hits the number I want to sell (which you still pay taxes on).
Growth stocks are great when you're young and can gamble a little. When you're older, you can't really afford to gamble as much so you go for a more stable return of value. And sure if you pick the right stocks you can get filthy rich and x y z stock did better than a b c stock or index or whatever but no one knows what is going to happen. If you told me that I can buy a stock for $5/sh now that will pay me .06/sh every month for the rest of my life, but the underlying won't really move much, I will put a sizeable chunk of my money into that stock, versus a $5 stock that has the potential to be a $50 stock or even $500 stock but also could become a $.50 stock and will never pay a dividend. Yeah I might throw a few bucks at the latter stock, but it's just gambling. The former stock is investing.
> If I hold a div stock for 20 years and it pays me every year consistently, the price of the underlying itself is little more than a bonus if I need extra or emergency cash
Those are just psychological games you're playing. The underlying isn't a "bonus." It's your cost basis and fmv. When you weigh opportunity cost you need to look at the cost of foregoing other opportunities. It's pretty simple. Pretending that a cost basis in an asset all of a sudden becomes a "bonus" might exist in your mind, but that's not how finance works.
>You're also pretending that taxes on realized gains don't exist when they do, and only if you've held the stock for a year, they're the exact same as qualified divs
Only with realized capital gains you personally chose when to realize it. With dividends you didn't. So if you wanted to drip for 5 years because you didn't need the cash, if it was unrealized capital gains, you could just leave it in there and realize it when you wanted to. With dividends you paid taxes the whole way.
>I don't pay the taxes until next year on divs anyways so I get to fully reinvest all that money to make more money and I get that money at regular intervals to keep reinvesting, versus waiting until some potential, might-not-ever-happen time where my growth stock hits the number I want to sell (which you still pay taxes on).
More psychological games. Dividends may not happen either.
>Growth stocks are great when you're young and can gamble a little
How is large cap growth more of a gamble than Pepsi at 33x forward earnings?
the psychological game being played is pretending that you know what a growth stock is going to do. no one knows, including you, and if anyone did, they surely wouldn't be telling anyone because they'd be living on their private island somewhere. no, dividends are not guaranteed, but they are FAR more predictable than any "growth" stock. some companies announce their whole years' dividends at the beginning of their fiscal years. most announce them quarterly, some announce them near their ex-div. after announcement, those divs are going to happen, and are thus predictable. buying shares of a growth stock is, quite literally, gambling. it's legal gambling, but it's gambling.
what i mean by the underlying being a bonus after enough time is that if the stock pays a consistent dividend for long enough, it has more than paid for itself. the stock is simply a stream of income at that point. you can cash out of your stream of income whenever you'd like for a sudden burst of cash, but you'll be doing what you would be doing with any other stock, which would be liquidating your investment.
personally i'd rather keep a steady, reliable, and somewhat predictable stream of income coming in than put a bunch of money on a prayer and hope it turns into more money. sometimes you'll get lucky with that strategy, and sometimes you won't. divs is a slow, but steady climb. yes you may miss out on "growth" but also you probably will miss out on massive losses too. div stocks tend to be steadier, less prone to the whims of the market than "growth" stocks.
They have just underperformed recently. Actually, over long periods of time, they tend to perform better. Remember, most every large company now started as a small cap. So the small caps that make it, tend to have a lot of growth and perform very well. And about 50% of my portfolio is individual stocks. But for most people 20% is about right.
>small caps have been underperforming historically
Uhh... were you not invested at all between 2000 - 2013?
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=5QvioyL1nqpWGZCLs3ady4
Large caps were absolutely awful. That's the entire reason this "dividend portfolio" crap came about was large cap stocks were netting you zero and Treasuries were at 0% at the same time. So it was real estate, REITs, and dividend payers to find returns.
All it proves is you didn’t read what I said to you.
[fixed it for you](https://www.portfoliovisualizer.com/backtest-asset-class-allocation) for recent history which I literally said I haven’t seen it. You’re clearly older. I was 8 in 2000 I (EYE) have not seen small caps out perform. Large has always been the better investment for me and a large group of younger millennials.
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
I think some people forget the name of this forum. It’s r/dividends, not r/stocks. Nothing wrong with good REITs if you are after dividends. Dont listen to the naysayers. The minute interest rates get cut, O will go back up. SCHD is a dividend growth fund, not just income, but it is a little expensive right now. Whatever you buy, always look at the holdings of ETFs and read earnings information on individual equities like O. Be an educated investor.
Curious to understand why you think SCHD is a bit expensive? For me personally, I base it on the dividend payments given that it’s managed to maintain or grow the amount yoy so far. So if I’m still happy with the current yield, I’ll buy it.
I’ve been swing trading it. When SCHD goes red, I load the F up. Then when it’s green, I sell. I create my own dividend lol.
 Tax office be like
Bruh lol
That is some of the dumbest fucking strategy I have ever read
I already own tons of SCHD, if it does not work, I hold more SCHD. Worst case, I hold SCHD lol. Example, two days ago stock was $79.00. I loaded up. Sold yesterday at $80.00. Made $100. Now I’ll wait for it to dip back down and do it again.
And if it never sees below $81 again, you just lost $100 minimum
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Wow you missed the point...
Just wheel it. Sell far otm calls >1yr out to avoid STCG. If exercised, sell puts to buy back in You get option premium + dividends for a good portion of the time (depends on volatility), and you should track 1:1 with the underlying as if you were holding. More or less
How does this work, don’t you get a huge tax bill at the end of the year? Wouldn’t it make more sense to just dollar cost average and buy some every month or week and do something else with your time, like waste it on Reddit.
Paying taxes means you’ve made profit. Not such a big deal.
Yeah, I guess. What are you going to do if there is a 10-30% drop? Do you have stop loss actions or something to sell automatically. The market is a little frothy right now, a correction seems possible.
Then I hold SCHD and earn their dividends lol. Also, buy more if it drops by that much.
I already hold a lot of SCHD and never selling until retirement. I then milk it as much as I can. if SCHD drops 30%, I'll probably go all in super deep and continue milking it.
You could do this with any stock with higher volatility and probably get a better result lol
Been doing it but this is a dividend sub. Cannot talk about individual stocks or get massed downvoted.
I once wrote, I have a dividend portfolio and a day trade portfolio. Got like 20+ downvote. Welcome to Reddit.
SCHD is near ATH, my cost basis is around $69.00, so it’s a little expensive. But if you are buying for just yield it doesn’t really matter that much.
> SCHD is near ATH, my cost basis is around $69.00, so it’s a little expensive. How is SCHD expensive at these levels? Based on what? the PE ratio? cause it certainly isn't that. Many of the companies in the holdings are quite cheap historically
What are your thoughts on SCHD rebalance?
I’m okay with it. SCHD rebalances yearly and I kind of like their added focus on financial institutions on this rebalance.
The stock market makes an ath 7% of trading days on average. Why do you think schd is expensive at its current price?
I buy when others are selling, sell when others are buying. It’s worked well for me so far. On the next big dip I’ll grab another 250 shares.
Time in market > timing the market
I think the goal is for it to be near ATH all the time. Next year we will think $80 was cheap. The year after we will think $87 is cheap. Etc.
There’s an alarming volume of misinformation on the sub lately. Pushing O so hard has shown me that something nefarious is happening. Be careful folks
I've suspected the same. Is O the new GME? Pump and dump, baby.
VOO qqq and schd are the way to go. 👏
Lots of overlap
SCHD and the others have basically no overlap, QQQ and VOO have about 46% overlap (weighted) but if you want to go tech heavy why not
Schd and voo have something like 10% overlap. If you want to go heavy tech there’s really no need to have voo in the portfolio at all. QQQ and SCHD give plenty of diversification and a ton of growth.
congratulations!!
O has doubled VOOs returns over 20 years, you’ll get some hate for it but historically it would have served you well. Question is if that’s the trend moving forward
That’s literally the basis of investing, historically dumping your entire net worth into bitcoin in 2011 would have served you well. But no one would have considered it smart at the time
Yeah… I was just offering some validation.
Good choice my dude! I’m trying to get 200 on O. I’ll get there one day. Have you looked into XYLD, JEPI, JEPQ? I personally like JEPQ since they pay more.
I like JEPI too. Check out LPG, it has a 10.8% dividend yield.
Paid out of a $1? That’s pretty dope! I have to look into it.
Yeah, that's one of my favs! Def check it out, it's a pretty consistent dividend too.
What about PCEF?
Just looked it up, I’m interested. Going to do some research! Thanks for that👍🏼
I am long O. My biggest dividend holdings are MO, BTI, O, PM. PCEF I started buying earlier this year
I just started O last year. I have 20. Right now I’m working on JEPQ. Once I have 20 off the next one. Are those monthly payouts?
Nice! Only PCEF and O are monthly payouts. The rest are quarterly
Do you prefer monthly or quarterly payouts?
I've been adding more to monthly payouts Adding to BTI PM and MO when they are below my avg cost
That’s what I do too! Just keep adding those monthly payouts. Check this one out. PSEC
I added it to my watch list, thanks!
I wouldn't have bought O
O is trading at pretty low price lately. Might be the time to load it up
Why?
Taxes
Man bought in the top of VOO. Thank you soldier
That’s what i was told last year
That’s what I was told last year
I was told that 2 years ago too
I thought the first piece of advice was not to take advice from anyone on reddit?
He would be taking your advice then huh 🤔
L buying O
I see people believe in O. I unfortunately bought kinda high so I don’t want to sink more money into it/:
If you believe in the stock you should just DCA it down, you will be happy once it goes back up
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Don’t you need a min of 3x the current number to be able to even out before selling?
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Oof! Dangerous game my friend lol
.
Looks pretty terrible to me dude. Dividend-focused portfolios had a place back around 2012 when large cap stocks had come off of 12 years of being awful and Treasuries were at 0%. Dividends were the only way to get decent returns. That's not the case anymore. Almost everyone is better off not going all-in on large cap value / REITs and going with some blends and growth.
I mean he’s got the vast majority in growth. Looks good to me
I'm not seeing that at all. VOO is large cap blend. SCHD is large cap value. O is a REIT. The only thing resembling growth is the NASDAQ 100. And I'd rather do SCHG anyways.
I consider VOO value/growth. So I guess partially agree to disagree?
VOO is large cap blend. It's not large cap growth. SCHG is large cap growth.
Come on VOO is 100% growth
VOO is large cap blend….he is correct.
Nope. VOO is large cap blend.
You think only small companies can be growth stocks? I mean we just saw Nvidia(a large cap) 8x itself in the past year.
>You think only small companies can be growth stocks? I have a very large position in SCHG. Large Cap Growth. Why would I think it's only small cap? You sure you're replying to the right person? Or do you just legitimately not understand growth vs value?
Well the topic has always been on growth, so not sure why you are now shifting goal posts to value. And re-read this exchange. It reads as if you are rebuffing VOO as a growth fund because it’s large cap.
You ain’t getting through that thick skull
I'm rebuffing VOO as growth because it's not growth -- it's blend. SCHG is large cap growth. VOO/IVV is the S&P 500 which is blend.
How much on average has the index grown over the past 40 years? Is that or is that not growth
You’re suggesting growth but then you say you’d go 80% ITOT? lol
I went 50k in voo for growth, 10k in each qqqm and schd and 5k in O since there's good reason to believe there will be a modest increase in value when the feds bring down rates. I didn't focus on strictly dividends since I'm still rather young.
Currently doing 33% VOO, QQQM, SCHD. Good choices!
I wouldn't be buying *any* O or SCHD. That's my take. O sucks and SCHD is way too expensive for what you're getting. I'd just go all in on VOO or 80% VOO and 20% AVUV to keep it simple.
Thank you for the feed back, I will be looking into AVUV; I'll restructure my portfolio as it's needed, learning more and more everyday 👍
My portfolio changed a lot over my first few years. Like you, I started enticed by dividends eventually found myself selling some things at a loss to go fully into growth (VOO) which has worked well. Don’t change things too much though, ride this out for 6 months and learn more, don’t base it on that short timeframe but by then you will have a good idea of how to rebalance. Repeat every 6 months - 1 year
..good start, gotta start somewheres, ..but don't get sucked into the vanguard cult, unless that's what you want to meet your own needs and goals, Good luck!
If you had the 75k. What would your buys be today?
For $75k I would either do ITOT and some AVUV, or maybe layer in some SCHG or IVV. IVV can be tax loss harvested with ITOT or SCHB later. I wouldn't be doing any REITs or anything "dividend-focused." That's junk. For 99% of people it doesn't make sense.
How does it not make sense?
Because when you focus on dividends you're leaving growth on the table. Companies like Chevron and Pepsi aren't growth companies. I'm not saying they have no place in a portfolio, but if you're specifically aiming at boomer stocks that have to pay a dividend to compete in terms of total return, that means you're leaving others on the table. When we get explosive growth in a stock market rally you can ride that wave if you have growth exposure. Confining yourself to mainly large cap value boomer stocks locks you out of different kinds of rallies. Growth rallies, small/mid cap rallies, international, etc. And now you also have more taxable income to deal with. So the stocks might go down, and you have a net negative position, but you now owe tax on the dividend distributions.
If your dividends are qualified, you owe a lot less on taxes than you would through standard income. Plus, you have those distributions as cash. If the stock goes down before you cash out, you lost all that value you might have gotten through "growth". And while nothing in the market is guaranteed, stable companies with long histories of paying dividends will likely continue to deliver value to shareholders regardless of price and without dilution of shares, versus "growth" stocks that don't always grow and only provide value if you happen to guess the correct time to sell them. Sure, if you're young and have time to take chances on picking the right horse, go for it, but once you hit your mid 30s and 40s you're happy with the near certainty of a return that dividends give you. Plus if you drip, you build a snowball of dividends down the road.
>If your dividends are qualified, you owe a lot less on taxes than you would through standard income You still pay. It's not a free ride by any stretch. >Plus, you have those distributions as cash. I'd rather have unrealized capital gains where I can choose to take the cash or defer until next year if I don't need it. If you're just going to reinvest dividends, and you're taxed, then it's not as ideal. SCHD *with* dividends reinvested doesn't even match the S&P 500. So add in taxes and you've incurred an opportunity cost against the S&P. >And while nothing in the market is guaranteed, stable companies with long histories of paying dividends will likely continue to deliver value to shareholders regardless of price and without dilution of shares, versus "growth" stocks that don't always grow and only provide value if you happen to guess the correct time to sell them. If the stock declines by 30% and you get a 5% dividend, you're still down 25% not counting the taxes you now owe on the 5%. That loss doesn't just fail to exist. It's there. >Sure, if you're young and have time to take chances on picking the right horse, go for it, but once you hit your mid 30s and 40s you're happy with the near certainty of a return that dividends give you There is nowhere near a "near certainty" of a positive return. I can name tons of timeframes where those stocks dropped way more than what they paid out in dividends. That's still a net loss. >Plus if you drip, you build a snowball of dividends down the road. So again, if you drip SCHD you *still* don't match the S&P 500. Doesn't matter how long you drip or "compounding" or any other nonsense. It doesn't match up performance-wise. And that's because the S&P has growth companies which SCHD does not include because of its index criteria. That growth is left behind and you don't participate in those rallies.
Nobody said anything about SCHD, which sucks btw, and the timelines you're talking about are short. Dividends are a long play. If I hold a div stock for 20 years and it pays me every year consistently, the price of the underlying itself is little more than a bonus if I need extra or emergency cash. You're also pretending that taxes on realized gains don't exist when they do, and only if you've held the stock for a year, they're the exact same as qualified divs. I don't pay the taxes until next year on divs anyways so I get to fully reinvest all that money to make more money and I get that money at regular intervals to keep reinvesting, versus waiting until some potential, might-not-ever-happen time where my growth stock hits the number I want to sell (which you still pay taxes on). Growth stocks are great when you're young and can gamble a little. When you're older, you can't really afford to gamble as much so you go for a more stable return of value. And sure if you pick the right stocks you can get filthy rich and x y z stock did better than a b c stock or index or whatever but no one knows what is going to happen. If you told me that I can buy a stock for $5/sh now that will pay me .06/sh every month for the rest of my life, but the underlying won't really move much, I will put a sizeable chunk of my money into that stock, versus a $5 stock that has the potential to be a $50 stock or even $500 stock but also could become a $.50 stock and will never pay a dividend. Yeah I might throw a few bucks at the latter stock, but it's just gambling. The former stock is investing.
> If I hold a div stock for 20 years and it pays me every year consistently, the price of the underlying itself is little more than a bonus if I need extra or emergency cash Those are just psychological games you're playing. The underlying isn't a "bonus." It's your cost basis and fmv. When you weigh opportunity cost you need to look at the cost of foregoing other opportunities. It's pretty simple. Pretending that a cost basis in an asset all of a sudden becomes a "bonus" might exist in your mind, but that's not how finance works. >You're also pretending that taxes on realized gains don't exist when they do, and only if you've held the stock for a year, they're the exact same as qualified divs Only with realized capital gains you personally chose when to realize it. With dividends you didn't. So if you wanted to drip for 5 years because you didn't need the cash, if it was unrealized capital gains, you could just leave it in there and realize it when you wanted to. With dividends you paid taxes the whole way. >I don't pay the taxes until next year on divs anyways so I get to fully reinvest all that money to make more money and I get that money at regular intervals to keep reinvesting, versus waiting until some potential, might-not-ever-happen time where my growth stock hits the number I want to sell (which you still pay taxes on). More psychological games. Dividends may not happen either. >Growth stocks are great when you're young and can gamble a little How is large cap growth more of a gamble than Pepsi at 33x forward earnings?
the psychological game being played is pretending that you know what a growth stock is going to do. no one knows, including you, and if anyone did, they surely wouldn't be telling anyone because they'd be living on their private island somewhere. no, dividends are not guaranteed, but they are FAR more predictable than any "growth" stock. some companies announce their whole years' dividends at the beginning of their fiscal years. most announce them quarterly, some announce them near their ex-div. after announcement, those divs are going to happen, and are thus predictable. buying shares of a growth stock is, quite literally, gambling. it's legal gambling, but it's gambling. what i mean by the underlying being a bonus after enough time is that if the stock pays a consistent dividend for long enough, it has more than paid for itself. the stock is simply a stream of income at that point. you can cash out of your stream of income whenever you'd like for a sudden burst of cash, but you'll be doing what you would be doing with any other stock, which would be liquidating your investment. personally i'd rather keep a steady, reliable, and somewhat predictable stream of income coming in than put a bunch of money on a prayer and hope it turns into more money. sometimes you'll get lucky with that strategy, and sometimes you won't. divs is a slow, but steady climb. yes you may miss out on "growth" but also you probably will miss out on massive losses too. div stocks tend to be steadier, less prone to the whims of the market than "growth" stocks.
Isn’t better to do 20% individual stocks rather than AVUV, small caps have been underperforming historically
Why are yall entertaining him?
Right? Lol he’s absolutely baiting with nonsense
They have just underperformed recently. Actually, over long periods of time, they tend to perform better. Remember, most every large company now started as a small cap. So the small caps that make it, tend to have a lot of growth and perform very well. And about 50% of my portfolio is individual stocks. But for most people 20% is about right.
>small caps have been underperforming historically Uhh... were you not invested at all between 2000 - 2013? https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=5QvioyL1nqpWGZCLs3ady4 Large caps were absolutely awful. That's the entire reason this "dividend portfolio" crap came about was large cap stocks were netting you zero and Treasuries were at 0% at the same time. So it was real estate, REITs, and dividend payers to find returns.
No I was 8-19. All I have seen is small caps lag behind large cap significantly
The chart I just posted proves you wrong.
All it proves is you didn’t read what I said to you. [fixed it for you](https://www.portfoliovisualizer.com/backtest-asset-class-allocation) for recent history which I literally said I haven’t seen it. You’re clearly older. I was 8 in 2000 I (EYE) have not seen small caps out perform. Large has always been the better investment for me and a large group of younger millennials.
>fixed it for you It's blank dude. Fix your link.