You have not considered the most important point when comparing dividends and deinvestment. The dividend is the optimal value of the deinvestment, as only the company itself knows how much money it can distribute and how much it needs for investments.
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@Botrux Yes and no. There are plenty of dividend-paying stocks that mercilessly fail to recover and drive the share price into the ground. It is also not good when stocks like Aristocrat are defended at all costs. And what does optimal mean? When you sell, the investment is optimal. Not when a company tells you to. Especially not when we're talking about dividends in crashes. How many people try to optimize their cash flow through dividends and then have umpteen positions because they want to have the right amount of money per month. Then Japanese payers are added because the USA shares pay out in certain months. It's all nonsense if you understand that dividends are just partial sales. You can initiate them yourself and save yourself all the cheese.
On the other hand, I have never disagreed that dividends are a good method of saving, but otherwise they have no positive effect. Especially not when building up the position. There they are a hindrance.
On the other hand, I have never disagreed that dividends are a good method of saving, but otherwise they have no positive effect. Especially not when building up the position. There they are a hindrance.
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You keep making straw man arguments. I didn't claim that I buy shares by distribution date. I didn't even mention aristocrats.
When I invest, I have to assess whether the company is more likely to rise in the future (in which case I should sell a little) or fall (in which case I should sell a lot). Within the company, however, it is much easier to estimate how the company will develop and whether the money needs to be thrown out or kept together.
When I invest, I have to assess whether the company is more likely to rise in the future (in which case I should sell a little) or fall (in which case I should sell a lot). Within the company, however, it is much easier to estimate how the company will develop and whether the money needs to be thrown out or kept together.
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•@Botrux Then you want to argue about something I didn't write or disagree with. Argumentative?
Dividends are a great de-investment. There. I'll write it again!
It's all about the belief that dividends have some kind of benefit in building up the investment or even somehow increase compounding. Which is nonsense.
Dividends are a great de-investment. There. I'll write it again!
It's all about the belief that dividends have some kind of benefit in building up the investment or even somehow increase compounding. Which is nonsense.
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@Madhatter5566 I don't argue, I discuss. If you don't want an answer to your posts, don't publish them, write them in your diary.
Everyone here agrees that distributions lead to lower returns. I'm referring to your statement "Flexibility is also nonsense. Partial sales do the same thing and are more flexible. With dividends you just have the trading costs when you build up the portfolio (you have to reinvest the dividends), when you sell as needed when you de-save."
Everyone here agrees that distributions lead to lower returns. I'm referring to your statement "Flexibility is also nonsense. Partial sales do the same thing and are more flexible. With dividends you just have the trading costs when you build up the portfolio (you have to reinvest the dividends), when you sell as needed when you de-save."
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•@Botrux Everyone agrees...you see, you're just wrong. They all wave their magic wand here and think dividends bring more.
And why are you writing that I'm overlooking something? That wasn't my point, nor do I disagree. If you want to discuss the internal dynamics of dividends in companies, feel free. Always open.
In my opinion, the company is throwing out money with which it cannot grow. That's great. That some companies have to do this is also OK. It shows that the business is stable and the company can no longer grow much. Or wants to attract dividend payers who think it will magically generate money.
The bottom line for you, however, is that you get zero euros more, you just get the money paid out and that costs you something. The fact that you have money in your hand and can reinvest it is great. But apart from the fact that the company has reduced your investment amount, what is the advantage for you? If you need the money, you could always sell parts yourself. When you need it, not when the company deems it opportune. When you build it up, you have to reinvest it at your expense with a new spread. Clean.
Personally, I don't find dividends from a company a buzzkiller, but I don't need them either. Not even if I want to actively withdraw them. I can do that myself. When I assess whether a company is great, I add the dividend and growth together. The dividend alone tells me nothing about whether it is a great company. There are enough distributors with high dividend yields where the share price simply falls all the time. Frying in their own gravy, so to speak
And why are you writing that I'm overlooking something? That wasn't my point, nor do I disagree. If you want to discuss the internal dynamics of dividends in companies, feel free. Always open.
In my opinion, the company is throwing out money with which it cannot grow. That's great. That some companies have to do this is also OK. It shows that the business is stable and the company can no longer grow much. Or wants to attract dividend payers who think it will magically generate money.
The bottom line for you, however, is that you get zero euros more, you just get the money paid out and that costs you something. The fact that you have money in your hand and can reinvest it is great. But apart from the fact that the company has reduced your investment amount, what is the advantage for you? If you need the money, you could always sell parts yourself. When you need it, not when the company deems it opportune. When you build it up, you have to reinvest it at your expense with a new spread. Clean.
Personally, I don't find dividends from a company a buzzkiller, but I don't need them either. Not even if I want to actively withdraw them. I can do that myself. When I assess whether a company is great, I add the dividend and growth together. The dividend alone tells me nothing about whether it is a great company. There are enough distributors with high dividend yields where the share price simply falls all the time. Frying in their own gravy, so to speak
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@Madhatter5566 You describe what I mean here: "But the bottom line for you is zero euros more, you just get the money paid out and that costs you something. The fact that you have money in your hand and can reinvest it is great. But apart from the fact that the company has reduced your investment amount, what is the advantage for you? "
I receive a steady return on my investment through dividends without having to decide for myself which share and how much I have to sell in order to trade ideally. I would also prefer it if dividends were optional. In other words, I could decide at each payout whether I wanted the dividend or not. But unfortunately that's not the case.
So I receive a dividend and can decide at that moment whether I want to reinvest or do something else with it. This is where the flexibility and my advantage lies, because I can increase my current consumption if I have to/want to. E.g. loan repayment.
That's why dividends fit my investment case. That doesn't apply to everyone.
I receive a steady return on my investment through dividends without having to decide for myself which share and how much I have to sell in order to trade ideally. I would also prefer it if dividends were optional. In other words, I could decide at each payout whether I wanted the dividend or not. But unfortunately that's not the case.
So I receive a dividend and can decide at that moment whether I want to reinvest or do something else with it. This is where the flexibility and my advantage lies, because I can increase my current consumption if I have to/want to. E.g. loan repayment.
That's why dividends fit my investment case. That doesn't apply to everyone.
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@Botrux However, the decision to pay a dividend is not always optimal. This is because it may happen at an inopportune moment, as it has been set well in advance. This makes it an obligation that may be included in a crash.
However, I have to say that this shouldn't really matter if I really need the money at the time. Because then I would also have had to sell part of it at that time
However, I have to say that this shouldn't really matter if I really need the money at the time. Because then I would also have had to sell part of it at that time
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