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Old 10-17-2014, 06:45 PM   #61
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Since a lot of dividends are paid with borrowed funds, i think your point could be argued.


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Even some great companies loaded with cash borrow money to pay dividend. This is because money are parked in for example Ireland and bringing it to US would result in huge tax bill for a company.

It is hard to fake GROWING dividend.
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Old 10-17-2014, 07:01 PM   #62
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apple reits did it all to easily. took quite a while for layman to understand the creative accounting of just where the dividend was being payed from
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Old 10-17-2014, 07:04 PM   #63
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sorry to say yep that is it. '

but today those companys are old and stodgy and while they still give money away the compounding of investor returns has fallen off.
Bunch of crap.... Look at 30-50 year charts of CL or PEP or KO classics of dividend growth.....
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Old 10-17-2014, 07:05 PM   #64
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i said today ,not 50 years ago.

and for that matter apple and microsoft never paid dividends until well after their success so check their charts too as long as we are comparing.. not sure what your point has to do with the mechanics of a dividend payment .it is what it is despite any examples you care to dig up.
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Old 10-17-2014, 07:11 PM   #65
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i said today ,not 50 years ago.

and for that matter apple and microsoft never paid dividends until well after their success. not sure what your point has to do with the mechanivcs of a dividend payment .
“Always invest for the long term.”

“We don’t get paid for activity, just for being right. As to how long we will wait, we’ll wait indefinitely.”

Warren Buffett

BTW I said look at what happened OVER last 50 years NOT 50 years ago
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Old 10-17-2014, 07:35 PM   #66
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it is never timing the markets it is time in the markets.

the markets are very efficient at taking the money from the impatiant and giving it to the patiant.

but it still has nothing to do with the mechanics of a dividend payout
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Old 10-17-2014, 07:45 PM   #67
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Don't sidetrack from GROWING dividends discussion....

Old and stodgy boring like: CL PEP KO PG made and most of them will continue making ton of money.

The accounting of all of it is not interesting.
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Old 10-17-2014, 07:51 PM   #68
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And you know this prediction because you and harry dent use the same crystal ball?

One thing decades of investing has taught me is don't predict .

No one knows whether or not anything will continue to make plenty of money.
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Old 10-17-2014, 08:21 PM   #69
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Over a long time probably having a plan and sticking with it is more more important then anything else.

One could do well enough with simplicity of S&P 500 buy and hold Warren Buffett style....
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Old 10-18-2014, 02:56 AM   #70
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it is all about the plan ,in fact any plan can work as long as there is discipline .

gold peaked in 1980 and if you had bought equal amounts of gold ,cash,an s&p fund and cash and were the worst timer in the world and bought that gold that moment it had peaked you would have actually beaten the s&p 500 return before golds fall a few years ago,. just by rebalancing once a year all those decades even gold would have been a winner .

as amazing as it sounds the two averaged out a little over 9% with gold taking the lead in that simple portfolio . now the s&p is ahead but not by much.

it shows you as long as an asset cycles ,it may take a while but any strategy can work if you stick to the plan.

personally i have always not been a buy and die investor but rather a buy and manage one.

i nudge my portfolio like steering a big ship and keeping it on course as i adjust it periodically to fit the big picture better as the world around me changes.

as an example the last 6 months i got rid of all high yield bonds which in terms of value are at an equal to dow 25,000 .

i shortened up the interest rate sensitive stuff and i up graded the portfolio to only very high investment grade bonds.

i eliminated small caps more than a year ago as well as all international funds.

when the dollar was weak years ago i held funds like fidelity export and multinational. exploited that fund until the dollar got stronger and dumped it for more domestic stocks.

which is why i never look at my funds against a bench mark. neither fund that year beat its index but working as a team they bested it by a lot. i look at my total portfolio performance .


slight shifts in the portfolios but all done to fit the bigger picture for now. i call it buy and manage . it is a long term strategy but with a more active stance. never an in the market or out kind of thing just a case of is there a better choice for the current outlook in the portfolio.

i may change 2or 3 funds out in a year some years even less or many even zero.
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Old 10-18-2014, 07:40 AM   #71
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sorry to say yep that is it. '

the mechanics of the dividend payment itself is no different really than a stock split.

whatever your worth the day before is the same amount you have at the start of the new quarter. the percentage gain is based on dollars not shares.

people think of thiese payments as if they were bank interest which they are not.. a 6% vtotal return made up of 2% dividends and 4% appreciation is no different than any other stock that returned the same 6% providing you reinvested the dividend.
Ok. Agreed and understood.

But! I checked the NAV of my funds/stocks the day before a large year end dividend and shortly thereafter.

In most cases, the NAV price recovered to pre-dividend/CG within a week or so and in all cases within 2 months. PLUS if one had reinvested, the growth would reflect that change even more so which wouldn't be as great without the dividend reinvest.

So, over a shortly longer period than the next day, it would seem that dividends have more than a neutral value.

Or am I out in the weeds (per usual)?
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Old 10-18-2014, 07:48 AM   #72
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the dollars started with are identical though. market action will pull the same dollars over the quarter the same percentage regardless of what combination of number of shares and share price those dollars are made up of.

the fact that the opening price has to be adjusted downward before the stock comes out of the gate means its value is the same no matter what and investment dollars at the gate are the same as they were. .

the trading of that stock takes place all quarter long but if it was 10k before the reinvested dividend and 10k after the dividend is reinvested then 10k is what your investment starts life at for the new quarter and when that bell rings where it goes is based on percentage up or down on 10k not just share price..

while you may see the dividend re-trace the next day after the adjusted price opened .the reality is if it did not pay the dividend the share price would have ended up higher than it did with the same percentage gain.

if you got a 5% dividend on a 10 buck stock , you started out with a 9.50 share price and .50 cent dividend reinvested.

lets say the stock went up 10% on the next day. you have a share price of 10.45 and roughly 1.05 shares after the reinvestment. that is 11 bucks in value rounded off.


if there was no dividend and the stock went up the same 10% next day you would have 1 share at 11.00

it all equals the same amount in the end. it has to mathamatically.

think of a fund distribution which is no different, it is a wash and just the culmination of where you stood right before.

on a volatile day that fund can retrace the distribution but you are no better or worse off than if it didn't make it. you are just up less share price wise if they did do it but the percentage gain is the same regardless.

our gains are measured in compounding off starting values . could be daily ,quarterly yearly or anyother measure.


if the dollars are the same total value and the gains are the same percentage the results can't be anything but the same. all that is varying is the number of shares and the share price when a dividend is payed and reinvested but it is all the same starting value.

i know it is hard to imagine that the dividend money reinvested when shares are lower isn't helping or hurting you but folks confuse it with rebalancing or adding new money in down markets where you are actully changing the allocation and investment amount in that starting value of the investment.
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Old 10-18-2014, 08:12 AM   #73
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the dollars started with are identical though. market action will pull the same dollars over the quarter the same percentage regardless of what combination of number of shares and share price those dollars are made up of.

the fact that the opening price has to be adjusted downward before the stock comes out of the gate means its value is the same no matter what and investment dollars at the gate are the same as they were. .


on a volatile day that fund can retrace the distribution but you are no better or worse off than if it didn't make it. you are just up less share price wise if they did do it but the percentage gain is the same regardless.


.
But couldn't one argue that, like a stock split, the lower price attracted more buyers to subsequently raise the price? Without the drop in price (from dividends/split, whatever) the price might not have subsequently gone up as much.

I'm not challenging here...I'm a true math idiot, but that would be my perspective.
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Old 10-18-2014, 08:14 AM   #74
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usually the drop is so slight as to not really be a factor unlike a split.

if it is a good stock people will buy it regardless. i mean in a year the s&p is paying about 2% in dividends on average. hardly an incentive.

besides if the stock just goes up enough to just even retrace the dividend than the buyer is right back to the same price by the quarters end anyway.

what you could do is avoid the tax implication but the odds are you will not buy it at the open price and will end up buying wherever the markets pull it after the opening bell. it may even trade on the futures market opening at the reduced price and already started trading.
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