The article is mMn a presentation of the dividend strategy from the perspective of a world portfolio representative and has accordingly gaps in the processing of, among other things, the following points: - Volatility of emerging markets and associated underperformance compared to benchmark indices at the level of industrialized countries. In recent years, EMs have outperformed developed markets, but the sharp ratio of EMs was ~54% and that of MSCI Worlds was ~48%. This means that the gain was achieved by means of higher volatility. Not every investor wants to have to endure that. See also political situation in China - Personal situation of the investor: From a certain age limit or personal financial CF target, it is unattractive to bet on market developments. This is mainly due to the dividend growth effect, so that one can buy well at an attractive price in the medium to long term. - Many well-known representatives of global equity funds are weighted by market capitalization and not by GDP. This means, by way of example, that the real addition of companies is only by traded value and not by actual importance to the country or world economy. Examples are the USA (too heavily weighted in the MSCI World mMn) and Japan (tends to take too little into account) - If you look at the S&P 500, over 52% has come from reinvesting dividends in recent years. These companies have a great importance for the growth of your ETFs at least on this index. As a result, I think it makes more sense for me to set the core on a broad and reliable world economy by means of core satellite and additionally generate CF by means of dividend growth effect. There we are partly at parity and I can definitely appreciate the ETF idea. Where we are not at parity: The statement on the subject of the best investment strategy I consider too general for the above reasons. You could have made it easier for yourself with a side sentence on the topic of investments exclusively in industrialized countries via ETF and then put that in comparison to dividends. Otherwise, your arguments are well prepared, even if I am of a different opinion 👍 (No investment advice)
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@svenleowe
I'm paraphrasing by saying that companies like Coca-Cola or McDonald's have rather low dividend yields at the beginning of the investment and only become interesting by increasing the dividend (whereby your mentioned profits are also decisive) over several quarterly cycles. As an example: 10 years ago, a Coca-Cola share cost €32.88 in August (simplified, source: Aktienfinder). This corresponds to 2.89% (annual dividend, source: Finanzen.net). If I bought 100 shares at that time, this would result in a total value of 3,288€. Per share there was 1.02$ at that time. For simplicity, let's calculate with 1€ the share. That means I would have 100€ (1€*100 shares) out annually. Let's say I don't sell and hold the 100 shares. Since the Coca-Cola share is now just under 62€ and the group knows the importance of the dividend for the share, now no longer 1€ is distributed (would be a dividend yield of only 1.6%) but thanks to profit and sales increase now 1.72€ is spent.
That would be only 2.7% again if I had bought the stock - but since I held it, I now calculate 1.72€ / 32.88€ = 5.231% dividend yield. I assume we mean the same thing - you mean profit increase, I mean the dividend increase that can be derived from it for a dividend stock like Coca-Cola. It may not be a hammer return, but it is at least reasonably safe. Not investment advice, yes I know Tesla would have outperformed that easily if you could have invested back then😁😁 (also not investment advice) Put the chairs up, hour is up😁😁
I'm paraphrasing by saying that companies like Coca-Cola or McDonald's have rather low dividend yields at the beginning of the investment and only become interesting by increasing the dividend (whereby your mentioned profits are also decisive) over several quarterly cycles. As an example: 10 years ago, a Coca-Cola share cost €32.88 in August (simplified, source: Aktienfinder). This corresponds to 2.89% (annual dividend, source: Finanzen.net). If I bought 100 shares at that time, this would result in a total value of 3,288€. Per share there was 1.02$ at that time. For simplicity, let's calculate with 1€ the share. That means I would have 100€ (1€*100 shares) out annually. Let's say I don't sell and hold the 100 shares. Since the Coca-Cola share is now just under 62€ and the group knows the importance of the dividend for the share, now no longer 1€ is distributed (would be a dividend yield of only 1.6%) but thanks to profit and sales increase now 1.72€ is spent.
That would be only 2.7% again if I had bought the stock - but since I held it, I now calculate 1.72€ / 32.88€ = 5.231% dividend yield. I assume we mean the same thing - you mean profit increase, I mean the dividend increase that can be derived from it for a dividend stock like Coca-Cola. It may not be a hammer return, but it is at least reasonably safe. Not investment advice, yes I know Tesla would have outperformed that easily if you could have invested back then😁😁 (also not investment advice) Put the chairs up, hour is up😁😁
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@BASS-T sexy post.
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