Wow, someone has made an effort 👍 Very detailed and understandably written. I also agree with you. Just briefly my comments on this. Of course it is the case that 1) paying dividends or reinvesting is first left pocket, right pocket, 2) the distribution first involves a tax payment, and 3) all other things being equal, the price of the reinvesting company should naturally grow more. I would still note that of course you have a certain sector bias if you invest only in growth or only in dividend stocks. Fast growing companies, especially in the tech sector, will reinvest profits to grow even faster, while stable sectors (especially when "winner takes all" is not important, unlike in the tech & internet sector) such as food, energy, tobacco, do not have to or cannot grow at all. Therefore, the alternative is usually buy-back or dividends, which of course has a similar effect in the end. So investors who invest only in growth or only in dividend stocks will always invest only in one part of the market. So I think you should look at the company and the industry itself rather than just whether they pay out or not. Lastly, as you also noted, it certainly depends on whether one is still in the accumulation phase or still has 15+ years to go. For people who have a regular, "passive" income (we all know that nothing in the world is entirely passive, but let's leave it at that) that leaves mainly rental income, dividends, and meanwhile interest again. With the latter, of course, you have no upside, so the first two are more exciting. Sure you could get the current income by selling. But if I always want to generate an equal amount by sales every month, I have the problem of the let's call it inverse-cost-average effect. In crises, at low prices, I have to sell more shares than in good times. One more point just occurred to me.... A strong dividend policy naturally requires a certain degree of financial discipline. Whereas it has to be said that capital allocation should always be an important skill for management, dividend or not, but if you know that just 30% of the profit is already budgeted, you can't fool around with it anymore. That's my comments on the topic.... but thank you for your interesting contribution!
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@Investorentagebuch super thanks for the very detailed comment 👌 In the end, the truth lies somewhere in the middle and every amount depends on personal circumstances and preferences. But it could also be exactly the crises where dividend cuts then occur. Just as another comment in the other direction 😅 If there were only black or white, we would all have the same portfolio.
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