MaK (@DollarDon) on getquin

2Yr·

High dividend, low Rendite🤷‍♂️

For many, the dividend is one of the main reasons why they invest in a company. To make it really worthwhile, they should have a high and preferably constant dividend yield.

In my view, the potential total return is far too rarely taken into account. There is no other explanation for the numerous investments in companies like BASF. They have always underperformed the S&P and there is no reason why this should change soll🤷‍♂️

If you want to have some additional security and diversification you choose an ETF.

Where this can lead you can see well in the picture. The global X SuperDividend has the goal to find the companies with the highest dividend yield and to invest in them.

Since 2011, unfortunately, exactly these companies have constantly underperformed the market, while the dividends have increased. After 11 years one is out with +/- 0. At the same time the MSCI World has doubled. 😅

However, the chart does not include taxes on dividends. In such a case, the return might even be negative.

what does it mean now?

Of course, you can't lump all companies together, but I maintain that most companies that have a high dividend can attribute this to share price losses. These in turn result from operational problems or poor prospects for the future.🥲

source: C.W Röhl

33 Comments

tommycash@tommycash

2Yr

Someone must have subscribed to Christian W. Röhl 👌🤭

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Ella Marie Waschbär@DividendenWaschbaer

2Yr

Maybe I don't understand the chart, but I don't see any comparison to the MSCI World there. Regardless, it depends on the strategy. Few people can beat the market anyway. It sounds nice to shout that you can't beat the market with dividend stocks. But this is only half the truth. There are periods in which you can beat the market. Regardless of that: my goal is to build up a steady cash flow. Of course, I personally make sure that the value of the company at least runs sideways. Yes, you pay taxes on the dividend and yes, that reduces the return. If my growth company doesn't pay a dividend, then I save up for 30 years and then my company goes bust or makes a loss, blah, blah, blah, whatever. So my pension is "gone", no matter what happened before. I also focus on the pension. I calculate around how much money I can take out from when so I'm taken care of until 89 (hopefully I won't be 102). Or I shift into dividend stocks and just pay the tax then. And have the expense, etc. Pp. I, as an early 30 year old still go for dividends. Why do I do that? To be as flexible as possible. I can reinvest the dividends, but I can also pay myself a vacation without effectively going to my assets. I could lease a car, which is paid by dividends or or or. So I effectively already have something from it (for example my McDonalds McMenu at Christmas, sponsored at McDonalds itself). In addition, I can bequeath the thing and my heirs do not have to worry about anything, they do not even have to have the slightest idea about the stock market. Just leave it and continue to just get money all the time. They could pass that on, etc. (assuming all companies would exist forever (regardless of value)) So I don't see a zero-sum game here at all. I don't care where the company stands as long as I get my dividend. (Of course, I'm still happy to take the increase in the share price with me).

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Enrique@Der_Dividenden_Monteur

2Yr

I think BASF is a bad example,
It's just a cyclical stock, which you should know as a dividend investor.
What counts here is when you buy.

And your ETF shown is really garbage 😅
The performance of "normal" dividend ETFs is quite different.

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Negan@Negan

2Yr

Very nice contribution! I keep thinking the same thing myself. In the beginning, I paid zero attention to this myself and just wanted to generate the highest possible dividends. But then at some point I had to clean up my portfolio :D

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Fabzy ✨@Fabzy

2Yr

That's why a $KO in a core satellite makes no sense at all.
I'm still learning, but that's exactly what I've seen a few times... or when making investment decisions. A CocaCola will certainly not beat the market over the next few years. If you already own a world ETF as a core, such defensive dividend stocks don't add any value. This is just a living example of your performances

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Niki02@Niki02

2Yr

I basically agree with you, but if you cash out after decades, you also pay very high taxes on your capital gains, so a few distributing shares (preferably a distributing ETF, of course) also make sense in order to utilize the annual tax-free allowance so that you don't end up booking such high capital gains.

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Paul S.@Bademaista

2Yr

Finally someone says it! The dividend is deducted from the share price anyway.

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Ayecaramba@Ayecaramba256

2Yr

But you forget that some investors don't care about the total return but want to live off their dividends and don't want to liquidate in the end...

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Topper H.@TopperHarley

2Yr

I hold a small position in the Super X Dividend. This is a very special ETF which, according to my latest information, can no longer be bought in Germany. This special ETF has nothing to do with dividend ETFs in general...

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SquirtGame@SquirtGame

2Yr

How many death threats did you receive after you published this post?

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