Unfortunately, that is too short-sighted. I am constantly buying new shares through the dividends, my portfolio is growing and growing and I can buy new shares month after month without having to sell shares. Selling shares is very different from paying dividends. The mental block is more on your side here. Of course, the dividend is deducted from the share price in the short term. But dividends grow in the long term. The time factor is decisive here. Allianz is increasing its payout by 20%. I keep getting a payout year after year. I've had enough growth and tech stocks with immense book profits - there are many that give up their profits again. Only a few like MS or Apple last very long. And even these are starting to pay out dividends. Much of the gains in the S&P over the years have come from dividends. And once I have received a dividend, it stays with me. I can decide what to do with the money and don't have to leave it up to the companies. I can reinvest it, top it up, pay it out or invest it in other assets. If you've been through a few ups and downs in a few years, at some point you'll have shares in your portfolio that have completely given up their book profits. The dividends that have been paid out to me remain with me, are mine, belong to me. Your book profits do not. In the end, it's a good mix of everything that gets you ahead. And just because you take such a short-term view of dividends and don't understand them doesn't mean they don't make sense. And nobody sells 3% of a share to get a "payout". This is bad theory with false assumptions and calculations far removed from reality.
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@joysanity No, you simply don't understand the basic math. According to your theory, dividends come and go as they please, independent of the share price. Please read up on the subject again.
https://aktienrebell.de/dividendenstrategie/
https://aktienrebell.de/dividendenstrategie/
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@Aktienmasseur Your math is clear to me, but you have not fundamentally understood the topic of dividends, you are only looking at the sub-area of it. Ask all the shareholders who live off dividends like Waikiki why they have dividends. I will soon be receiving 22,000 euros in dividends every year. Tell me what I'm doing wrong.
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@joysanity You can also make partial sales of the same amount and get the same result. If you understand the math, then the term dividend discount should mean something to you. Dividends are nothing more than left pocket right pocket. Whether the share is at €100 and you receive €3 in dividends and the value falls to €97 while you have €3 in the settlement account or you make the €3 partial sale yourself, the result is the same.
According to your logic, companies are only profitable or you can only participate in profits if you receive dividends. But that is simply wrong. Of course you can't compare a dividend-paying share with a non-dividend-paying share. Because the share only exists once. But as a dividend investor, you are ultimately worse off. As you have to pay tax immediately on every distribution, this inevitably reduces your return and minimizes compound interest. Furthermore, the tax deferral effect means that you have to pay less tax overall if you sell once "at the end" and not quarterly or annually or even monthly in the case of dividends.
You are not doing anything wrong with your strategy, yet you are anecdotally portraying dividends as better.
And even if you get a 30% dividend yield on Alliant, that is part of the total return at any given time.
My post was about errors in dividend ends. There is nothing wrong with buying dividend stocks. But the focus should not just be on the dividend, so don't buy shares for the sake of the dividend.
According to your logic, companies are only profitable or you can only participate in profits if you receive dividends. But that is simply wrong. Of course you can't compare a dividend-paying share with a non-dividend-paying share. Because the share only exists once. But as a dividend investor, you are ultimately worse off. As you have to pay tax immediately on every distribution, this inevitably reduces your return and minimizes compound interest. Furthermore, the tax deferral effect means that you have to pay less tax overall if you sell once "at the end" and not quarterly or annually or even monthly in the case of dividends.
You are not doing anything wrong with your strategy, yet you are anecdotally portraying dividends as better.
And even if you get a 30% dividend yield on Alliant, that is part of the total return at any given time.
My post was about errors in dividend ends. There is nothing wrong with buying dividend stocks. But the focus should not just be on the dividend, so don't buy shares for the sake of the dividend.
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@Aktienmasseur Leave the dividend discount aside for a moment. It's very simple math, I think everyone here understands that. But that is precisely the typical error in thinking. The discount is there, of course, but it will be made up again. And unfortunately, your example of paying out or selling €3 is a purely theoretical example of fresh investors. Try to skip that, because it won't happen that you sell 3% shares. But you will take the distribution if the company offers it. The tax and deferral effect is also clear, it's nothing new.
Of course I can also participate in profits if companies don't pay out dividends. I've already been up many hundreds of percent with shares, but so many have fallen again and I ended up with nothing. I have enough Apple (largest position) and Microsoft shares and also Nvidia. Everything is wonderful. But the distributions and dividends are what I am surely entitled to. Share prices can and will fall again. There is also nothing wrong with an accumulating S&P ETF. Everything is wonderful. It's in the pension portfolio and stays there and is allowed to grow. But without me doing anything, I can buy new shares every month for almost 2,000 euros because the money ends up in the clearing account. Believe me, that's a very, very cool feeling.
And the example of Realty Income: buy now and get money in your account every month for life without thinking. That's worth so much! Never mind the few taxes. You'll still pay enough tax. Who knows what you'll have to pay on your profits in 20 or 40 years. Sure, Realty Income is no Nvidia or ARM.
I'm not making dividends look better in an anecdotal way, but I see your post doing just that: denying dividends are a good thing.
Of course I can also participate in profits if companies don't pay out dividends. I've already been up many hundreds of percent with shares, but so many have fallen again and I ended up with nothing. I have enough Apple (largest position) and Microsoft shares and also Nvidia. Everything is wonderful. But the distributions and dividends are what I am surely entitled to. Share prices can and will fall again. There is also nothing wrong with an accumulating S&P ETF. Everything is wonderful. It's in the pension portfolio and stays there and is allowed to grow. But without me doing anything, I can buy new shares every month for almost 2,000 euros because the money ends up in the clearing account. Believe me, that's a very, very cool feeling.
And the example of Realty Income: buy now and get money in your account every month for life without thinking. That's worth so much! Never mind the few taxes. You'll still pay enough tax. Who knows what you'll have to pay on your profits in 20 or 40 years. Sure, Realty Income is no Nvidia or ARM.
I'm not making dividends look better in an anecdotal way, but I see your post doing just that: denying dividends are a good thing.
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@joysanity We probably just meet in the middle. My post really just wanted to expose the misconceptions and the stiffened focus. At the end of the day, everyone has their own strategy. You're happy to leave some performance behind as long as you feel comfortable. But you can't invalidate facts like that.
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