Poll: What is your annual cash income from securities?

[Alan]

I apologize, I read the poll too fast. Is there any way I can change my answer to the poll please?

I'm afraid I don't believe canceling your vote to allow you to vote again is possible. It is certainly not within my powers as a Moderator as this is an anonymous poll.

 

[rbmrtn]

I am at the < 30K range by design. That cover my expenses without touching principal by a good bit. Also stays in the minimum tax bracket and should maximize AHA rebates if it survives.

Why separate out "income" from total return? I'm really curious to see the answer.

Because I live off dividends/interest. I can't do that with total return without selling something. I created a report in quicken that tracks dividends/interest vs spending to track how budget works.

 

[Lsbcal]

I am at the < 30K range by design. That cover my expenses without touching principal by a good bit. Also stays in the minimum tax bracket and should maximize AHA rebates if it survives.

Originally Posted by Lsbcal
Why separate out "income" from total return? I'm really curious to see the answer.

Because I live off dividends/interest. I can't do that with total return without selling something. I created a report in quicken that tracks dividends/interest vs spending to track how budget works.

Thanks, sometimes I forget that we haven't all selected the same way to optimize our situations.

Our situation is optimized through having everything in retirement accounts. Part of this was by design, part by having some of the taxable eaten up faster due to the 2008 melt down. So I deal with the tax situation in quite a different way, but still have to consider taxes in our taking of income.

 

[devans0]

Mine is deliberately low. I am accumulating and don't want the taxable income.

 

[Bikerdude]

It's interesting to see that many people don't track their dividend and interest income. I am quite obsessed with tracking that kind of data. I have the spreadsheets to prove it.

+1

 

[haha]

I am thinking this way also. I'm kinda scratching my head to understand where haha is going with this (maybe nowhere, which is fine), or what he hopes to get out of it.

The answer to "What is Life?"

Ha

 

[ERD50]

The answer to "What is Life?"

Ha

Yes, that too. But we can always assume '42' as the answer.

You are a thoughtful and pragmatic guy, so if you were wondering just how much people are counting on dividends vs cap gains for their total return, I would think % rather than absolutes would matter. I'm having trouble with the thought process behind the $ request (maybe linking it to to some multiple of poverty levels? or median income?).

I guess your curiosity makes me curious. No big deal, just curious.

-ERD50

 

[mathjak107]

I am at the < 30K range by design. That cover my expenses without touching principal by a good bit. Also stays in the minimum tax bracket and should maximize AHA rebates if it survives.



Because I live off dividends/interest. I can't do that with total return without selling something. I created a report in quicken that tracks dividends/interest vs spending to track how budget works.

except for a small commision there really isnt much difference between the company having a distribution and the exchange computors adjusting the price downward to reflect that distribution or you selling an equal dollar value of shares of a non dividend payer.

it all works out to the same thing right after the distribution and where market action takes either case is a seperate issue.

a stock dividend is no different than a mutual fund dividend. its just distributing the gains that already happened leading up from the last distribution.

exchange rules have the share price adjusted downward in either case.

the dividend sees a price reduction and a non dividend payor would see a share reduction of equal value if you did it on your own instead.

 

[pb4uski]

except for a small commision there really isnt much difference between the company having a distribution and the exchange computors adjusting the price downward to reflect that distribution or you selling an equal dollar value of shares of a non dividend payer.

it all works out to the same thing right after the distribution and where market action takes either case is a seperate issue.

a stock dividend is no different than a mutual fund dividend. its just distributing the gains that already happened leading up from the last distribution.

exchange rules have the share price adjusted downward in either case.

the dividend sees a price reduction and a non dividend payor would see a share reduction of equal value if you did it on your own instead.

There you go again. There are no exchange rules that require a downward adjustment of share price when a dividend is paid. The share price is a result of market activity, not a computation. Any decrease in share price when a dividend is paid happens because of economics, not any regulatory requirement.

 

[mathjak107]

wrong my friend , there certainly is

i suggest you read NYSE rule 118 and AMEX Rule 132.

they both dictate that, on ex-cash dividend days, open limit orders to buy stocks are reduced by the cash dividend amount at the open..


no different than funds go through.

 

[pb4uski]

The reason that an open limit order is adjusted for the cash dividend is because the party placing the open limit order made the limit based on the pre-dividend market price and the rule adjusts the limit order (not the stock price) by the dividend once the stock goes ex-dividend.

Stocks work different than funds. (Open end) fund prices are based on net asset value and NAV decreases exactly by the amount of dividends paid. Individual stock prices are based on supply and demand, so while they are affected by the payment of a dividend, the effect on the price of the stock is not necessarily exactly the amount of the dividend.

 

[mathjak107]

a funds nav is identical. its nav always reflects the supply and demand of every issue it holds. its nothing more than a collection of individual funds . it just collects all its gains ,interests and dividends and pays them out together rather then seperatly as they come in but the consept is the same..
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the exchanges reduce the price of the last quote of the previous days trade.

But because the quote of the previous day's closing trade AND the bid and the ask of all outstanding orders are also reduced (unless placed with a Do Not Reduce restriction) by the exchange the stock usually opens based on the reduction.

"

NYSE Rule 118 and AMEX Rule 132 dictate that, on ex-cash dividend days, open
limit orders to buy stocks are reduced by the cash dividend amount. With discrete
prices, if the resulting price is not a tick multiple, it is further lowered to the next tick.​

Prices in limit sell orders are not changed"


dubofsky and haite did a paper debating the effects of the exchange mandated reductions.

 

[pb4uski]

I think we both agree that the stock price will be affected by the dividend paid. I believe that it is not by regulation but is the natural result of market supply and demand and that investors are aware of when the dividend will be paid. Also, as you indicate any orders placed prior to the payment of the dividend are presumed to be pre-dividend and are adjusted for the dividend paid once the stock goes ex-dividend. Wikipedia indicates the following:

It is relatively common for a stock's price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid. This reflects the decrease in the company's assets resulting from the declaration of the dividend. The company does not take any explicit action to adjust its stock price; in an efficient market, buyers and sellers will automatically price this in.

Notice that the above indicates "roughly equal" not "equal". You were suggesting some mechanical intervention in the pricing of a stock by the exchanges that would make it exactly equal (like what happens with a fund since it is based on NAV and cash is part of NAV) and I am suggesting that it is not mechanical, automatic or one-to-one.

Beyond that, I guess we'll have to agree to disagree.

 

[mathjak107]

but there is no disputing that the two exchange rules mandate that drop. it may not be to the penny but close enough.

if it didnt work that way we could just be ahead by buying a stock the day of record and then collecting the dividend like bank interest.

the exchanges make sure that doesnt happen by having those 2 rules in place. where they trade after the open is all investor sentiment.

its all about total return. selling enough shares from a stock with a total return of 8% to equal a 2% dividend is no different then a dividend payer up 6% with a 2% dividend.

in either case you can have that cash flow .

 

[Alan]

The answer to "What is Life?"

Ha

Brilliant answer - my cash income from securities is 42

 

[MichaelB]

The dividend discussion is like the movie Groundhog Day.

 

[pb4uski]

The dividend discussion is like the movie Groundhog Day.

+1 I'm done.

 

[mathjak107]

i guess if brilliant researchers like dubofsky bail and hite couldnt agree what chance do we have.

 

[redduck]

Yet, even Dubofsky and Hite were able to agree that Neil Armstrong said, "One giant step for a man."