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Old 03-13-2020, 11:39 PM   #61
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Very helpful, thanks.

Anybody else? ....
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Old 03-16-2020, 07:38 PM   #62
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Thanks for asking this question, ER Eddie. I was wondering the same thing. In the first years of ER my plan is to meet spending needs primarily through rental income, supplemented with dividends and interest. My investment advisor noted that the dividend income is rather independent of the stock's price fluctuations and could be expected to remain relatively stable. She felt I was good to go for ER. That was about 2 months ago though. The answers folks have given here are generally reassuring, so for now I'm still planning to be in class of 2020. Do keep us posted with any updates on your end.
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Old 03-17-2020, 04:19 AM   #63
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Re: dividend investing..... Look at your portfolio as a black box, with what you put in going in one end, and what you take out coming out the other. The dial is your AA, which you can change. Still, when you die, you will have taken out so much, and have some (or none) left over.

The Boglehead strategy of index investing with steady compounding at whatever the S&P rises at, at least for all time until now (what was true may fail in the future), gives the most money at the outgoing (and remainder) end.

At least this is how I understand it. And I say this as a previous long-term dividend investor who thought the same as you stated above. It sort of comes down to TANSTAAFL. It (dividend investing) *seems* like it is too good to be true, and it is.
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Old 03-17-2020, 08:16 AM   #64
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Originally Posted by audreyh1 View Post
Some major economic sector always seems to get creamed now and then. Dividends are cut.
I think the oil industry will finally have to cut dividends. In the history of Standard Oil/Chevron (where dad has his career and was startled when his NW went up and up in retirement due to oil stocks), I could never find a decrease in dividends. They even INCREASED their dividend for Q1 2020. Q2 will be interesting. Stock price yesterday fell to about the same in 2009, about a 50% loss in value.

Check out the dividend chart.

https://www.chevron.com/investors/st...endinformation
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Old 03-17-2020, 09:55 AM   #65
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Originally Posted by BoodaGazelle View Post
The Boglehead strategy of index investing with steady compounding at whatever the S&P rises at, at least for all time until now (what was true may fail in the future), gives the most money at the outgoing (and remainder) end.

At least this is how I understand it. And I say this as a previous long-term dividend investor who thought the same as you stated above. It sort of comes down to TANSTAAFL. It (dividend investing) *seems* like it is too good to be true, and it is.
To clarify, I'm not a dividend investor in the sense of selecting specific dividend stocks. I'm an index fund investor, the kind you allude to in your first paragraph. I'm just talking about dividends thrown off by general, broad-based index funds (e.g. Total US Stock Market).

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Originally Posted by pdxgal View Post
Thanks for asking this question, ER Eddie. I was wondering the same thing. In the first years of ER my plan is to meet spending needs primarily through rental income, supplemented with dividends and interest. My investment advisor noted that the dividend income is rather independent of the stock's price fluctuations and could be expected to remain relatively stable. She felt I was good to go for ER. That was about 2 months ago though. The answers folks have given here are generally reassuring, so for now I'm still planning to be in class of 2020. Do keep us posted with any updates on your end.
You're welcome. Judging by history since WWII, a 23% drop would be worst case scenario. Average drop is much less than that, an unbelievably low 4%. I'd be shocked if it was only a 4% drop. I wouldn't even notice that.

I'll keep an eye on my own dividends and try to report back. I might not really know until the end of the year, though.
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Old 03-17-2020, 10:11 AM   #66
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The dividend drop for VTSAX Total US Stock Market may be greater than the drop of Dividend Aristocrats, I'd think. I found this chart of dividend history for VTSAX.
https://seekingalpha.com/symbol/VTSAX/dividends/history

Dividend history can also be downloaded from Yahoo.

4% drop seems very optimistic.
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Old 03-17-2020, 02:05 PM   #67
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The dividend drop for VTSAX Total US Stock Market may be greater than the drop of Dividend Aristocrats, I'd think. I found this chart of dividend history for VTSAX.
https://seekingalpha.com/symbol/VTSAX/dividends/history

Dividend history can also be downloaded from Yahoo.

4% drop seems very optimistic.
Thanks for the link. Interesting. I'll keep an eye on it. We should have data for Q1 pretty soon. Q2 will give a better indication.

I agree that a 4% drop would be too good to be true. I'm not expecting something that small. Would be nice, but nah, not this time.
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Old 03-17-2020, 07:48 PM   #68
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I just keep 5 yrs of planned spending in cash (i.e. CD's) and invest the rest. I sleep well at night.
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Old 03-19-2020, 05:51 AM   #69
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Olive Garden (DRI) has suspended its dividend. Even worse, stock price is down almost 70%.
https://www.marketwatch.com/story/ol...=mw_latestnews

Darden Restaurants Inc. (DRI) is part of the S&P 500.
https://markets.businessinsider.com/...onents/s&p_500
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Old 03-19-2020, 08:05 AM   #70
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Originally Posted by target2019 View Post
Olive Garden (DRI) has suspended its dividend. Even worse, stock price is down almost 70%.
https://www.marketwatch.com/story/ol...=mw_latestnews

Darden Restaurants Inc. (DRI) is part of the S&P 500.
https://markets.businessinsider.com/...onents/s&p_500
And they had a very steady and mostly rising dividend for almost 25 years. Looks like a little pull-back and leveling ~ 2007, but that was after they boosted it by 5x.

If the CV happened a year or two later, it looks like DRI would have been eligible (or close) for inclusion in that Dividend Aristocrat list? And now it is a zero div and a near 70% drop? I'll stick to my diversified portfolio, thanks.

Date Div*
01/09/20 0.880
10/09/19 0.880
07/09/19 0.880
04/09/19 0.750
01/09/19 0.750
10/09/18 0.750
07/09/18 0.750
04/09/18 0.630
01/09/18 0.630
10/06/17 0.630
07/06/17 0.630
04/06/17 0.560
01/06/17 0.560
10/05/16 0.560
07/07/16 0.560
04/07/16 0.500
01/06/16 0.500
10/07/15 0.492
07/08/15 0.492
04/08/15 0.492
01/07/15 0.492
10/08/14 0.492
07/08/14 0.492
04/08/14 0.492
01/08/14 0.492
10/08/13 0.492
07/08/13 0.492
04/08/13 0.447
01/08/13 0.447
10/05/12 0.447
07/06/12 0.447
04/05/12 0.384
01/06/12 0.384
10/06/11 0.384
07/07/11 0.384
04/06/11 0.286
01/06/11 0.286
10/06/10 0.286
07/07/10 0.286
04/07/10 0.223
01/06/10 0.223
10/07/09 0.223
07/08/09 0.223
04/07/09 0.179
01/07/09 0.179
10/08/08 0.179
07/08/08 0.179
04/08/08 0.161
01/08/08 0.161
10/05/07 0.161
07/06/07 0.161
04/05/07 0.206
04/06/06 0.179
10/05/05 0.179 << ~5x boost
04/06/05 0.036
10/06/04 0.036
04/06/04 0.036
10/08/03 0.036
04/08/03 0.036
10/08/02 0.036
04/08/02 0.024
10/05/01 0.024
04/06/01 0.024
10/05/00 0.024
04/06/00 0.024
10/06/99 0.024
04/07/99 0.012
10/07/98 0.024
04/07/98 0.024
10/08/97 0.024
04/08/97 0.024
10/08/96 0.024
04/08/96 0.012
10/05/95 0.024


https://www.dividendchannel.com/symbol/dri/

-ERD50
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Old 03-19-2020, 08:15 AM   #71
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Thatís why diversification is important.
While some sectorís dividends will be cut, others wonít.

And while some dividends will be cut, a well diversified set of dividends wonít drop nearly as much as the stocks themselves. At least, that is the goal
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Old 03-19-2020, 08:28 AM   #72
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Ford dividend gone.

https://www.zerohedge.com/markets/fo...draws-guidance
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Old 03-19-2020, 08:38 AM   #73
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Thatís why diversification is important.
While some sectorís dividends will be cut, others wonít.

And while some dividends will be cut, a well diversified set of dividends wonít drop nearly as much as the stocks themselves. At least, that is the goal
But it is a tunnel vision, and unhelpful (to your financial health) goal to focus only on the dividends versus the total value of the stocks plus dividends.

I'll put diversification ahead of that, I'll invest in the broad index and not limit myself to whether a stock pays high/mid/low/no divs. It's the balance sheet of you portfolio that counts. You can always create cash flow if needed, as needed, by deciding when and how much to sell, rather than having these div payers decide for you (a dividend is essentially a sell off of the stock).

-ERD50
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Old 03-19-2020, 09:58 AM   #74
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i won't be surprised if companies that take money from the government will not be able to pay stock dividends based on the wording in the legislation. Bailouts will probably come with strings attached. It sounds like shareholders will be at the end of the line in this disaster. At this juncture, it only seems fair...

Corporations have been the biggest buyers of stock in the Bull market. The consumers are the ones who have been propping up this behavior for so long [with never-ending tax breaks and low interest giveaways]. Corporations are addicted to the cheap money and now comes the withdrawal pains of not having easy access to credit because the value of all their [repurchased] shares is upside-down. Their corporate cultures are too. Some have become truly dangerous to their customers and have to go. The "Walking Dead" - Wells Fargo, Uber and Boeing - would be great places to start. As a taxpayer, I don't want them getting a dime of my bailout money. Someone else can assimilate them in BK and turn them around.
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Old 04-02-2020, 11:22 AM   #75
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I'm still waiting on my quarterly dividend statements from Vanguard and Fidelity. They ought to be coming out soon. I can compare this year's Q1 dividends with 2019's.


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But what I am saying is that it is a totally artificial restriction. A dividend is just a distribution of some of the value of the stock. It makes absolutely no difference (outside of tax implications) whether that company distributed some of their value to you in the form of a dividend, or if you sold some of their stock to obtain that value.
Re. bolded: It doesn't make a difference on their end, but it does make a difference on mine. If I sold stock instead of taking dividends, I would be locking in losses.

That's the main reason I like taking dividends. It allows me to avoid selling stock during a bear market.
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Old 04-03-2020, 12:15 PM   #76
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I got my Q1 statements from Vanguard and Fidelity, so I can compare last years dividends to this year's.

Dividends for Q1 2019: 4808.
Dividends for Q1 2020: 4996.

So they actually went up a bit.

I expect it to drop significantly in Q2. I'm surprised there was no drop in Q1.
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Old 07-03-2020, 08:15 PM   #77
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Update to the thread, now that I have Q2 results:

My dividends dropped 3.7% in Q2. Nothing to worry about. That's close to the average of 4% for dividend drops during recessions and bear markets (see OP). It's nowhere near the outlier of a 23% drop in 2008-2009.

To clarify for those who don't want to read back in the thread, I'm referring to the dividends generated by general Vanguard index funds, not to specific dividend funds. I'm a general index fund investor; I don't try to pick specific dividend stocks.
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Old 07-03-2020, 08:35 PM   #78
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Thank you!

Now I have a good reference. I use that site all the time, but hadnít paid much attention to their dividend data.

So, an investor should be prepared for a 23% haircut after a big bear market, and that it could take several years to get back to get back to a peak.
This number is consistent w/ my data for 2009 which was for a mishmash of fund of the month recs from Money Mag, etc so not exclusively S&P500.
The number was even larger for the 2001 recession. Yet the numbers so far for 2020 don't show much of a dip. The largest dividends so far are for VG index funds & they seem similar to last yr. .........so I'm confused about what to use for this yrs forecast. Right now I'm assuming no change so that I don't get caught short for estimated taxes.
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Old 07-04-2020, 06:31 AM   #79
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Just got my Fidelity statement. Q2 dividends dropped 3.8%, compared to Q2 in 2019. As you'd expect, that's very close to the 3.7% drop in Vanguard dividends.

That's good news to me. I'm living off dividends, and a 3.7% drop is really nothing to me. I was concerned about a possible outlier scenario like in 2009, with 23% drops or worse -- but no sign of that so far.
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Old 07-04-2020, 04:38 PM   #80
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I'm still waiting on my quarterly dividend statements from Vanguard and Fidelity. They ought to be coming out soon. I can compare this year's Q1 dividends with 2019's.

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Originally Posted by ERD50 View Post
But what I am saying is that it is a totally artificial restriction. A dividend is just a distribution of some of the value of the stock. It makes absolutely no difference (outside of tax implications) whether that company distributed some of their value to you in the form of a dividend, or if you sold some of their stock to obtain that value.

Re. bolded: It doesn't make a difference on their end, but it does make a difference on mine. If I sold stock instead of taking dividends, I would be locking in losses.

That's the main reason I like taking dividends. It allows me to avoid selling stock during a bear market.
Sorry, I missed this 3 month old reply.

But this is the myth that keeps getting repeated, which does not make it any truer. Are you 100% equities? That's not typical. The typical retiree is more like 60/40.

At 60/40, you will very, very, very likely never sell stocks during a bear market. A conservative retiree is likely at < 3.5% WR, and a 60/40 AA ought to kick out at least 2.5% in divs, So that 40% fixed will be available to sell/rebalance, and will provide many, many, many years of 1% withdrawals ( the delta of 3.5% withdraw and the 2.5% in divs).

So try again.

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