FwieRendite (@FwieRendite) on getquin

1Yr·

A thought that has been on my mind now since I joined #getquin has been on my mind:

"Why is everyone here so keen on #dividends?"

From a purely financial point of view, the yield of a share is, as is well known, composed of dividend yield + price gains. Since the distributed dividends are automatically deducted from the price of the respective stock, it becomes a zero-sum game when viewed holistically.

Assuming two completely identical companies, we naturally forego the compound interest effect and thus a potentially better long-term performance due to the distributions.

What do you think?

What are your reasons for and against dividend stocks???

PS: Yes, I also have dividend stocks in my portfolio, because it just feels nice to get cash in my hand at certain intervals. But I can't explain it rationally. 😜

54 Comments

Staatsmann@Staatsmann

1Yr

I use dividend stocks primarily to motivate me in times when growth stocks are not doing so well. It is a purely psychological effect for me that when I know that my growth stocks are only going down in book value, but in parallel a dividend arrives in the account every now and then. For this reason, only part of my portfolio consists of dividend stocks.

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RealMichaelScott@RealMichaelScott

1Yr

In theory, you are right. But unfortunately, theory is not always practice because people are rational only in the rarest cases. Some reasons that speak for dividend stocks: - Motivation: instead of being happy about book profits, real money comes into the account on a regular basis - Passive income: many people like the idea of regular income without any further active action on their part - Quality feature: a company must be able to afford a dividend that increases over decades. This can be a positive indicator of the health of the company Of course only a rough list, but I hope the idea gets across.

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DonkeyInvestor@DonkeyInvestor

1Yr

I am not keen on dividends. But I feel more comfortable living on dividends in my old age than selling parts of my portfolio.

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Lorena@Lorena

1Yr

I'm not a fan of dividends. But maybe when I'm older, I'll focus more on that. But not yet, growth is more important to me

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MORE MONEY BOY 🤑@EnjoyCapitalism

1Yr

Dividends offer the only rational added value if you have enough capital to live on the returns. In principle, it is also possible to continue to bet on price gains and then successively sell shares, but this has the massive disadvantage that you would also have to do this in times of crisis when prices are low, have to sell more accordingly and then profit less from the relatively higher sale of shares in the subsequent recovery. Dividend stocks also lose value, but only cut their payouts in extreme cases, which is why cash flow remains stable even during a bear market.

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Björn@Kapital_Koala

1Yr

Dividends are love 🫶 It is important to me that I do not have to work until the statutory pension (small joke on the side), come closer to my goal. I experience in recent months often, the acquaintances, colleagues, etc. shortly before or just at retirement age are and Zack give up the spoon. I do not intend to work so long, but rather with deductions early to enjoy my life still something. Dividends and rental income help me implement my plan, plus I get something back with my dividends. I spend so much money in the month on everyday products, whether Unilever or Coca Cola, everything is expensive enough, you can be happy if you get something back 😄✌️

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Zackdela79@Zackdela79

1Yr

You seem to have come to Getquin too late: in 2021, dividend hunters were still demonized by many here and everyone wanted tech. Since Tech has been sliding since the beginning of 2022, many have discovered the pleasures of dividends for themselves - that's just how the stock market plays 😁

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MaK@DollarDon

1Yr

I partly rely on dividends because I have more flexibility in everyday life. For example, dividends are tax-free in some countries 😌 In addition, there are countries where you can already live with 400€ like 1500€ in Germany, even 50€ dividends are already very attractive 😉 I am still of the opinion that in a good portfolio growth as well as dividend values belong 🧐

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Dividenden-Penner@Dividenden-Penner

1Yr

I can't pay for bread rolls with book profits.
And when I retire, my portfolio will not be reduced.

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Zoro@RoronoaZoro

1Yr

I think it depends on what you want to do with the portfolio in the long or short term. I have a few dividend payers in the portfolio, but not because of the dividend, but because of the title itself. In the long term (20+ years), dividends should also be able to pay my life in part, but since this is a long way off, I don't place much value on it at the moment. A few others here will either want to watch their monthly cash flow grow constantly or are already earning a decent side income with it at the present time, although the majority here is probably doing the former. Dividends are also a psychologically good means to keep oneself in a good mood, e.g. in the last months.

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