Apart from the fact that I also read a lot of nonsense here. What is so difficult about accepting that everyone can have different preferences and goals? Who says that dividends have to be reinvested? I've also never spoken to anyone who is into dividends and thinks it's "free money". What nonsense
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•@Cype If that were the case. How often do we read here about the dividend avalanche or dividend strategy?
And it's good that you agree that dividends are not free money. You've already gone further than many others.
And what was nonsense on my part? Do you believe that dividends somehow magically generate money?
And it's good that you agree that dividends are not free money. You've already gone further than many others.
And what was nonsense on my part? Do you believe that dividends somehow magically generate money?
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@Madhatter5566 Well, for example, your reference to "does not protect against a crash" with the indication that 1% of €50 is different from 1% of €25 is more of a pro argument than a disadvantage. The dividend doesn't care what the share price is.
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@Cype No. 😅
Unless you think 1% of 25 euros is the same as 1% of 50 euros. Is that what you think? Have you done the math?
Dividends are reduced during a crash or stopped or suck an asset dry. You are inflexible compared to a manual partial sale that you could leave when the market is crashing. Dividends are fixed. Partial sales are not.
And your loss of the actual share value is equal to the dividend. It's weird that you think it would be different. Where does your imaginary advantage come from?
Unless you think 1% of 25 euros is the same as 1% of 50 euros. Is that what you think? Have you done the math?
Dividends are reduced during a crash or stopped or suck an asset dry. You are inflexible compared to a manual partial sale that you could leave when the market is crashing. Dividends are fixed. Partial sales are not.
And your loss of the actual share value is equal to the dividend. It's weird that you think it would be different. Where does your imaginary advantage come from?
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•No? I think you're talking kind of crazy and claiming something? I built up an IBM position many years ago when it was still possible to make double-digit purchases. The aim was to realize some of the profits from my portfolio on an ongoing basis, because "you only live once" and dividends simply appeal to me more. Since then, I have been receiving a stable, rising dividend, regardless of whether the share price is at 150 or 100. Then I might have sold at 100, at 150, at 120, at 100,150 etc. I find it unsexy when I look at the current price, so I'm glad I didn't sell anything. The pocket money has also grown considerably in relation to the investment in the meantime, comes punctually and reliably (even in bad times/"crash"). I also don't see what should stop me from partial sales at just under 3x - what's the problem? I'm happy about cash flow and just under 3x, I'm satisfied. Yes, somehow more return is certainly possible, it's a question of the goal. I don't want to become the richest man in the cemetery, so I'm happy to withdraw from a small part of my portfolio. Instead of surrendering to the current market price and giving up parts (e.g. down from 160 to 120), I prefer to do this via stable divs and am happy about a fixed position size. If I now look at the notional book profits for each sale not made, you could actually speak of free money
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@Cype Then you haven't done the math right... you're confusing the growth of your share with a dividend effect. Your dividend would not stay the same or increase without the growth of the share/company taking this out.
In principle, you sell when a dividend is triggered by the company. Your reinvestment keeps the value of your investment the same. If it did not grow and you did not reinvest, the value of your company would simply fall in the long term. Quite simply, if your company pays out more than it has and earns, it loses value!
Please do the math. Please show how a company without growth could maintain the value it has with a dividend. Where does money magically come from?
In principle, you sell when a dividend is triggered by the company. Your reinvestment keeps the value of your investment the same. If it did not grow and you did not reinvest, the value of your company would simply fall in the long term. Quite simply, if your company pays out more than it has and earns, it loses value!
Please do the math. Please show how a company without growth could maintain the value it has with a dividend. Where does money magically come from?
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@Madhatter5566 Reinvest mine? Reading and understanding is not your thing, is it? ;-) NO reinvest....
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•@Cype You are still confusing dividends with growth. Without the dividend, the share would have grown by the amount of the dividend. The money doesn't just appear with you. My goodness. You could have just as easily sold part without the company paying a dividend and you would have seen the same growth. There is no difference between a partial sale and a dividend
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@Madhatter5566 Where do I say that money just appears like that? Old Swede. What's your message? I would have been better off if I had sold shares at 110,120,130,140,150 in the last few years instead of collecting dividends and now holding all original shares at +210 ?
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•@Cype? My point was that dividends are indistinguishable from partial sales. You have already automatically sold parts of your position with the dividend at 110, 120, 130, 140, 150 if you have not reinvested it. (Since the share has automatically lost the dividend amount in value). What's not to understand? Money is not simply printed.
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@Madhatter5566 Okay, let's take a look at the period from 2017 to 2019. Do you want to tell me that would have been a good period for partial sales? You can add the distributed dividend to the share price, but that doesn't make any difference. Without the dividend, the share price would be higher, of course, but still in the red compared to now. The difference of just under €100 compared to today is not the total dividend payments to date, I can tell you that much ;) The markets go up and down and not just up, so it makes a difference when or if you change your position size
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