Income Portfolio

[ERD50]

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.

-ERD50

 

[ESRwannabe]

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%.

 

[ERD50]

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

 

[OldShooter]

.... 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.

 

[olyveoil]

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.

 

[olyveoil]

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.

 

[olyveoil]

"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.

 

[enjoyinglife102]

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.

 

[RunningBum]

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.

 

[olyveoil]

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.

 

[target2019]

We are in 90% agreement.

We are in 100% agreement.
FYI, dividend is a trigger word. It divides the families. /S

 

[RunningBum]

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.

 

[olyveoil]

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.

 

[RunningBum]

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.

 

[olyveoil]

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

 

[aja8888]

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

Sigh....you are new here....we are mostly "set it/forget it" investors. We are (most of us) retired and have "enough" and prefer to use our time doing things that are fun (like go on vacation, take trips, play pickle ball, fish, garden, etc). That's why we retired.

 

[ERD50]

...
Obvious things to me:
"Dividends" do seem to trigger some emotive replies here. Not sure why. ...

The antidote (*not* "antecdote") to emotive replies is data.

Got some?

-ERD50

 

[olyveoil]

Sigh....you are new here....we are mostly "set it/forget it" investors. We are (most of us) retired and have "enough" and prefer to use our time doing things that are fun (like go on vacation, take trips, play pickle ball, fish, garden, etc). That's why we retired.

So what if I'm new here?
What about my posts are not relevant to the OP?
Just because most are set and forget types precludes discussion about dividend investing? If you don't agree, just say so. Why be dismissive or passive-aggressive childishness?

congrats on retirement.
Included with your pickle ball, vacations etc also includes replying to this forum.

 

[olyveoil]

The antidote (*not* "antecdote") to emotive replies is data.

Got some?

-ERD50

One antidote is data, yes. Not the antidote.
What data would one be looking for? I am suggesting that a dividend stream is part of an investing strategy....not the investing strategy.

Where is the data stating otherwise?

 

[qwerty3656]

People keep asking for Data. Here is some data. I think the right comparison is 100% stocks for the dividend growth investor vs. 60/40 for the "total return" investor. I am 100% invested in dividend growth stocks and in the crash last year and the crash in 2009, my dividends hardly moved at all.

VYM (Vanguard High Dividend Yield Index)
10 yr: 12.04
5 yr: 11.40

SCHD (Schwab U.S. Dividend Equity ETF)
10 yr: NA
5 yr: 16.85

VTI (total Market)
10 Yr: 14.03
5 Yr: 17.68

AGG (Bonds)
10 Yr: 3.30
5 Yr: 3.12

60/40 VTI/AGG
10 Yr: 9.74
5 Yr: 11.86

 

[MichaelB]

If there’s much more sighing we’ll have enough wind to sail a schooner.

 

[Koolau]

So what if I'm new here?
What about my posts are not relevant to the OP?
Just because most are set and forget types precludes discussion about dividend investing? If you don't agree, just say so. Why be dismissive or passive-aggressive childishness?

congrats on retirement.
Included with your pickle ball, vacations etc also includes replying to this forum.

Heh, heh, you'll get used to it if you stick around for a while. Sometimes we sound like a tough crowd who is quite opinionated. Uh, I guess some of us are. You can toughen up and participate or shake the dust off your feet. I'm hoping for the former though YMMV.

 

[MichaelB]

You can toughen up and participate or shake the dust off your feet.

Of course, there is another option, which is everyone can be more respectful and disagree without being disagreeable

 

[Koolau]

Of course, there is another option, which is everyone can be more respectful and disagree without being disagreeable

Yeah, that was gonna be my second option. Maybe I'm not as optimistic as you are. Hopeful - but not as optimistic. YMMV

 

[ERD50]

One antidote is data, yes. Not the antidote.
What data would one be looking for? I am suggesting that a dividend stream is part of an investing strategy....not the investing strategy.

Where is the data stating otherwise?

I've posted it many times, I will repeat it for you when I have time a little later, unless you search and find it before then.

-ERD50