Not quite from my point of view. Dividends are a differentiated topic: with ETFs, you can look at it the same way as @Madhatter5566, but not when investing in individual stocks.
There are usually reasons for stocks that don't pay any dividends at all. Here, too, there are exceptions that have high quality and pay out almost nothing ( $MSFT $GOOGL ), but as a rule, high-quality stocks have been returning a portion to their shareholders every year for decades. And many of these stocks have been increasing this payout rate as a percentage every year, some of them for over 100 years: this shows what quality they have: $BNS, for example, has been increasing its dividend every single year since 1833, and the underlying base price continues to rise.
When investing in shares, you can of course generate "dividends" yourself at some point by selling part of your previous price gains: however, this leads to a loss of substance, is time-consuming, each trade costs fees, etc.
Quality dividend shares: pay dividends without any loss of value. You can bequeath the number of shares to your grandchildren and the dividend will still increase from year to year. In particular, your personal dividend yield (i.e. how much money did I pay for a share at what time, and how much dividend do I receive today in relation to the purchase price at that time) is the measure of all things. If you want to replicate this by selling shares at some point, then good night Marie, say goodbye to your investments.
After 20 or 25 years, this personal dividend yield can rise to 70 or 80 % for many quality stocks: per year! In other words, based on the *former* purchase price, you will receive 70% of your purchase price each year, without any loss of substance: next year again and so on.
There are usually reasons for stocks that don't pay any dividends at all. Here, too, there are exceptions that have high quality and pay out almost nothing ( $MSFT $GOOGL ), but as a rule, high-quality stocks have been returning a portion to their shareholders every year for decades. And many of these stocks have been increasing this payout rate as a percentage every year, some of them for over 100 years: this shows what quality they have: $BNS, for example, has been increasing its dividend every single year since 1833, and the underlying base price continues to rise.
When investing in shares, you can of course generate "dividends" yourself at some point by selling part of your previous price gains: however, this leads to a loss of substance, is time-consuming, each trade costs fees, etc.
Quality dividend shares: pay dividends without any loss of value. You can bequeath the number of shares to your grandchildren and the dividend will still increase from year to year. In particular, your personal dividend yield (i.e. how much money did I pay for a share at what time, and how much dividend do I receive today in relation to the purchase price at that time) is the measure of all things. If you want to replicate this by selling shares at some point, then good night Marie, say goodbye to your investments.
After 20 or 25 years, this personal dividend yield can rise to 70 or 80 % for many quality stocks: per year! In other words, based on the *former* purchase price, you will receive 70% of your purchase price each year, without any loss of substance: next year again and so on.
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11
•Deleted User
9Mon
Comment was deleted
@Madhatter5566 That's right, you can see it that way. Only the number of shares held remains the same with the dividend model; if I want to make withdrawals without dividends, I have to sell.
The number of shares held decreases. And if what you outlined above happens next year (profit goes down for some reason), and the number of shares has decreased, that's like a lever on the personal return. return.
So I have to trade more, act more. But you're right: in the end it's a matter of opinion and depends on personal needs. A young person who is building up assets doesn't necessarily have to pay attention to dividends.
But: the idea that shares that don't pay dividends make more price gains than those that do is obviously not statistically true (I've been told this, but I can't check it, so I don't know if it's true).
The number of shares held decreases. And if what you outlined above happens next year (profit goes down for some reason), and the number of shares has decreased, that's like a lever on the personal return. return.
So I have to trade more, act more. But you're right: in the end it's a matter of opinion and depends on personal needs. A young person who is building up assets doesn't necessarily have to pay attention to dividends.
But: the idea that shares that don't pay dividends make more price gains than those that do is obviously not statistically true (I've been told this, but I can't check it, so I don't know if it's true).
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11
•Deleted User
9Mon
Comment was deleted
@Madhatter5566 "Leverage" meant symbolically and of course not in the correct stock market sense: Number of shares x dividend increase rate x price gain vs. decreasing number of shares x price gain of the securities.
In your model, wealth will definitely fall at some point or will *theoretically* be reduced to 1 single share over many years: after that, it's over.
Not in mine.
I'm talking about a phase of pure withdrawal without new purchases, e.g. at retirement age.
Which, admittedly, doesn't play a role in the average lifespan of a person.
D
And: good dividend-paying stocks are not 1-euro stocks with moderate price performance vs. non-paying stocks = 1000-euro stocks, but have roughly the same price performance as non-dividend-paying companies: the latter, however, usually simply do not have the same quality, which is why they cannot pay out anything to the owners at this stage of their business model. However, these stocks can of course also have exploding share price gains: Stock market prices usually reflect an expected or hoped-for future.
Distributing ETFs are a different matter: I agree that they should be scrutinized in terms of asset accumulation.
Accumulating or distributing: the shares behind them are the same, the risk is the same, only the share growth is slower.
In your model, wealth will definitely fall at some point or will *theoretically* be reduced to 1 single share over many years: after that, it's over.
Not in mine.
I'm talking about a phase of pure withdrawal without new purchases, e.g. at retirement age.
Which, admittedly, doesn't play a role in the average lifespan of a person.
D
And: good dividend-paying stocks are not 1-euro stocks with moderate price performance vs. non-paying stocks = 1000-euro stocks, but have roughly the same price performance as non-dividend-paying companies: the latter, however, usually simply do not have the same quality, which is why they cannot pay out anything to the owners at this stage of their business model. However, these stocks can of course also have exploding share price gains: Stock market prices usually reflect an expected or hoped-for future.
Distributing ETFs are a different matter: I agree that they should be scrutinized in terms of asset accumulation.
Accumulating or distributing: the shares behind them are the same, the risk is the same, only the share growth is slower.
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