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Old 05-24-2021, 07:02 AM   #21
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No expert, but I've always hated preferred stocks. The issuer has all the control. If interest rates go up, you are stuck as there is no fixed term like a bond that would help limit your downside risk. If interest rates go down, they can call and either re-issue or issue some bonds.

If the company gets in money trouble, preferred holders are in line after bond holders so preferred carries more default risk than bonds.

The fact that some of these are paying a lot and not being called, seems likely to be due to poor creditworthiness of the company. It's not like the corporate CFOs went to sleep and or said "let's not call these, we like paying more for money than we have to!"

So I think some of these are just junkier versions of junk bonds and buyers should be skeptical if the yield is terrific.
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Old 05-24-2021, 07:35 AM   #22
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Wish to create an income portfolio of 3-4 low expense ETFs, preferably dividend ETFs that will on average return 4% or more. At this moment, looking at Invesco Preferred ETF (PGX) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD).

As this type of portfolio will have significant risk during an inflationary cycle, I am soliciting suggestions for additional ETFs to complete this income portfolio as well as any commentary regarding the first two ETFs that I have selected (PGX and SPHD). Thanks!

I like monthly paying ETFs so I would suggest ETFs: DIVO, PEY, SPHD, DHS.

Those are all relatively high yield (3.50% to 4.00% for all but DIVO). In particular DIVO is around 5.00% because it strategically adds income from covered calls.

Those fours ETFs will not only pay out a descent amount, but they have also had dividend growth of around 7% on average, in combination if equally weighted.

If you are still short on income you can add in a few more ETFs: JEPI, NUSI, QYLD, XYLD, PFFA, AMZA.

Most of those make money from selling covered calls. PFFA buys preferred stock with modest leverage. AMZA buys MLPs with modest leverage.

I only include AMZA as I think MLPs hit rock bottom last year. They have been absolutely devastated the last 6 years or so. Be cautious on that one because I don't have much trust in MLPs anymore. They maybe permanently un-investable forever...
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Old 05-24-2021, 07:59 AM   #23
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... Many dividend paying naysayers do not take into account the yield on cost and long term holding aspect of dividend paying assets (including the forbes author). Further, you can find just as many articles promoting dividend investing.
Sigh ...
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Old 05-24-2021, 08:03 AM   #24
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Sigh ...
.... Sigh ....

Got something to say? then say it.
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Old 05-24-2021, 08:15 AM   #25
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Many dividend paying naysayers do not take into account the yield on cost
There's a difference between being a dividend naysayer vs. looking for total return. I'm not sure there are any of the former here. Total return advocates, by definition, do take the yield payout of dividends into account, as part of the return. What makes you say differently?
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and long term holding aspect of dividend paying assets
Please explain what this long term holding aspect is, and how it differs from the long term holding aspect of a total return portfolio.
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Old 05-24-2021, 08:25 AM   #26
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OP,
I am doing similar. I believe that Div payers are part of a total return portfolio.
....

Many dividend paying naysayers do not take into account the yield on cost and long term holding aspect of dividend paying assets (including the forbes author). Further, you can find just as many articles promoting dividend investing.
I am not a "dividend naysayer", I accept the dividends that come as part of a diversified portfolio (like VTI - Total US Market).

But I don't like the idea of investing only in div payers, that is making it harder to be as diversified as the Total US Market, and I've seen no evidence of any advantage (on the contrary, my research into div payers show they under-perform by all meaningful measures, including volatility).

Call it semantics, but I dislike the term "total return portfolio". All portfolios deliver a "total return" - it is a measurement, not a description of the portfolio. It's like saying I have a square foot house, all houses can be measured in square feet.

Show us some data - how can someone on this forum easily invest in a diversified group of div payers that show a historical advantage over VTI? If it's true, it should be easy to educate us on these touted advantages. Data, not stories.

I don't care how many articles promote something, show me the data.

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Old 05-24-2021, 09:05 AM   #27
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IMO, the only reason to invest in dividend yielding stocks is if it allows you to increase your equity exposure.

It is psychological, but if you decide to ‘never sell’ and live off only your dividends, then having a 100% invested in dividend yielding equities (or funds) is a good way to go. Dividends are rarely cut during a market downturn (assuming you’re diversified).

This approach will do better than total return, because most total return investors will offset their allocation with bonds/FI investments.

Otherwise, it’s better to invest for total return and rebalance as needed.

Yes! I would not be 100% equity if I invested for total returns.

Although, I wouldn't say its all psychological. Maybe 50%.
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Old 05-24-2021, 09:12 AM   #28
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Yes! I would not be 100% equity if I invested for total returns.

Although, I wouldn't say its all psychological. Maybe 50%.
I'd say it's 110% psychological.

A dividend paying portfolio has MORE volatility than a 100% Total Market portfolio (which is why I say more than 100% psychological). There just is no factual basis (that I've ever seen), that a dividend paying portfolio will provide more stability in downturns than a Total Market portfolio.

Show us the data.

And what good is "psychological" for your portfolio health? If someone truly believes that daily consumption of a piece of chalk and a shot of Apple Cider Vinegar is going to cure their operate-able cancer, they might feel better, but they will probably die from that cancer. Psychology killed them, but I guess they felt good about it?

-ERD50
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Old 05-24-2021, 09:17 AM   #29
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.... Sigh .... Got something to say? then say it.
"Sigh" is shorthand for "I don't have the energy to argue about these nonsense statements." and "This type of individual is generally not interested in facts anyway."

Others responding to your posts obviously have more energy than I do.
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Old 05-24-2021, 09:18 AM   #30
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There's a difference between being a dividend naysayer vs. looking for total return. I'm not sure there are any of the former here. Total return advocates, by definition, do take the yield payout of dividends into account, as part of the return. What makes you say differently?

Please explain what this long term holding aspect is, and how it differs from the long term holding aspect of a total return portfolio.
Agreed on the difference. Plenty of threads here touting total return vs. dividend investing. I do not believe it is an either/or. Some on this very thread do. Posts #4 and #11 as exhibit A.

Dividend investing is a good part of total return investing, in my opinion.

Yield on cost is key to me. Accumulate, hold "forever" and dividend payments relative to ones cost rises -- while alos getting capital appreciation.
---Again, part of an investing strategy, not the only part of investing strategy.
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Old 05-24-2021, 09:20 AM   #31
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I am not a "dividend naysayer", I accept the dividends that come as part of a diversified portfolio (like VTI - Total US Market).

But I don't like the idea of investing only in div payers, that is making it harder to be as diversified as the Total US Market, and I've seen no evidence of any advantage (on the contrary, my research into div payers show they under-perform by all meaningful measures, including volatility).

Call it semantics, but I dislike the term "total return portfolio". All portfolios deliver a "total return" - it is a measurement, not a description of the portfolio. It's like saying I have a square foot house, all houses can be measured in square feet.

Show us some data - how can someone on this forum easily invest in a diversified group of div payers that show a historical advantage over VTI? If it's true, it should be easy to educate us on these touted advantages. Data, not stories.

I don't care how many articles promote something, show me the data.

-ERD50
We are in 90% agreement.
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Old 05-24-2021, 09:23 AM   #32
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"Sigh" is shorthand for "I don't have the energy to argue about these nonsense statements." and "This type of individual is generally not interested in facts anyway."

Others responding to your posts obviously have more energy than I do.
Sigh is shorthand for passive-aggressive behavior where you feel intellectually superior but are too lazy to reply.
Then don't....reply.

I do marvel at your ability to discern whether someone is "interested in facts" or not from one post on one thread. That is good stuff.
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Old 05-24-2021, 09:43 AM   #33
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Over my six plus decades I've learned to never disregard any methodology in life that may not be the most ideal approach, but when it is weighted with the probability of the individual sticking to it, it is the the ideal choice. This is especially so when it comes to investing and staying fit.
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Old 05-24-2021, 10:17 AM   #34
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Agreed on the difference. Plenty of threads here touting total return vs. dividend investing. I do not believe it is an either/or. Some on this very thread do. Posts #4 and #11 as exhibit A.

Dividend investing is a good part of total return investing, in my opinion.

Yield on cost is key to me. Accumulate, hold "forever" and dividend payments relative to ones cost rises -- while alos getting capital appreciation.
---Again, part of an investing strategy, not the only part of investing strategy.
No, you've missed what people are saying about total investing, and you didn't really address either of my points. There are plenty of other threads where this has been discussed, and I'm not going to rehash this. I take offense when you misrepresent what total return investing is, and what the mindset of those who see it as their investing goal.
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Old 05-24-2021, 11:56 AM   #35
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No, you've missed what people are saying about total investing, and you didn't really address either of my points. There are plenty of other threads where this has been discussed, and I'm not going to rehash this. I take offense when you misrepresent what total return investing is, and what the mindset of those who see it as their investing goal.
I don't believe i even represented what total investing is much less mis-represented.
Post #4 and Post #11 is Exhibit A of assuming total return investing is the end all/be all answer. I don't believe that. Do you?

I also don't believe dividend investing vs a total return investing is the question. Both have a place in my opinion. Difference is I don't dismiss one.
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Old 05-24-2021, 12:04 PM   #36
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We are in 90% agreement.
We are in 100% agreement.
FYI, dividend is a trigger word. It divides the families. /S
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Old 05-24-2021, 12:22 PM   #37
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I don't believe i even represented what total investing is much less mis-represented.
Hey, remember that time you called them "dividend paying naysayers"? All the way back in post #20. It was over 3 hours ago, so maybe you don't.
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Old 05-24-2021, 12:41 PM   #38
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Hey, remember that time you called them "dividend paying naysayers"? All the way back in post #20. It was over 3 hours ago, so maybe you don't.
Yes. I remember. Vividly.

Just because someone is a dividend paying naysayer does not mean to me that they are a total return investor only. That must be some sort of assumption you have. But, don't apply it to me.
Further, I have stated more than once that dividend investing and total return investing should not be an either/or thing.
what do you believe? do you have a stance to take?

Remember when you implied there are no dividend naysayers on here? (post #25).
Remember when I gave exhibit A of two (on this very thread) who in fact were naysayers AND one was trying to state that total return is a replacement for?
Allllll the way back to post #30.
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Old 05-24-2021, 01:02 PM   #39
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Yes. I remember. Vividly.

Just because someone is a dividend paying naysayer does not mean to me that they are a total return investor only. That must be some sort of assumption you have. But, don't apply it to me.
Further, I have stated more than once that dividend investing and total return investing should not be an either/or thing.
what do you believe? do you have a stance to take?

Remember when you implied there are no dividend naysayers on here? (post #25).
Remember when I gave exhibit A of two (on this very thread) who in fact were naysayers AND one was trying to state that total return is a replacement for?
Allllll the way back to post #30.
I should've just echoed Old Shooters "sigh".

Me? Total return, all the way. If dividend payers help get me the best total return, great. But in the end, it's all about total return. I don't care about dividend yield beyond what it contributes to total return.

I can't say for sure, but I think that's what the authors of posts 4 & 11 believe too.

With that, I'm done here.
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Old 05-24-2021, 01:22 PM   #40
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I should've just echoed Old Shooters "sigh".

Me? Total return, all the way. If dividend payers help get me the best total return, great. But in the end, it's all about total return. I don't care about dividend yield beyond what it contributes to total return.

I can't say for sure, but I think that's what the authors of posts 4 & 11 believe too.

With that, I'm done here.
Much more productive conversations occur when one party (you) does not assume what the other party believes (me) and then tries to apply it to the debate with zero evidence (you).
Not really worth anyone's time to post things like "sigh" (you) in a forum where investing philosophies are being discussed.

Obvious things to me:
"Dividends" do seem to trigger some emotive replies here. Not sure why.
"Dividends" also seems to bring out passive-aggressive / feelings of intellectual superiority out of people here. Not sure why.

To the OP, I agree with an income portion of your portfolio being dividend focused. Some less common things to consider are:
BDC's
Covered call ETF's
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