Is living off of dividends an illusion?

[dixonge]

On a related note - I've often seen dividends promoted as a way to buffer or reduce exposure to market downturns. I've also seen a lot of notices of dividend cuts in some large players. It would seem that dividend income may not work so well during situations like we are in now...

 

[jebmke]

On a related note - I've often seen dividends promoted as a way to buffer or reduce exposure to market downturns. I've also seen a lot of notices of dividend cuts in some large players. It would seem that dividend income may not work so well during situations like we are in now...

Personally, I think we will see dividends flatten in Q2 and possible drop considerably in Q3 (depending on how things go). Boards of companies that are well capitalized and not in severe stress will wait to make the call in Q3. Some have already suspended. Weirdly, the dividend for the Vanguard S&P 500 Index fund in Q1 was quite a bit lower than Q1, 2019. It was paid early so it could just be a timing issue of dividends paid by the underlying stocks.

 

[MikeyMarks]

I read just now that Boeing announced they’re suspending their dividend. I own lots of Boeing shares and that dividend funded part of my living expenses. So, while it may be rare for companies to play around with dividends, it is happening, so be careful. It’s not like there’s any legal obligation there the way there is with bonds. Buy bonds instead.

 

[Brat]

As much as I believe that Boeing will be protected I wouldn't buy THEIR bonds.