Dividend growth is an oxymoron. You can either have dividends (short term gratification) or growth . not both. I don't know why people think dividends are great ? You don't keep your money invested. You remove profits every month and get taxed on it.
How is this a great strategy ?
How is this a great strategy ?
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@reach2ashish the last sentence shows that you miss the bigger picture and explains why you think that way („short term gratification“). Capital markets literature has clearly shown that dividends contribute to total returns significantly and over long time periods that dividends are irrelevant to a company‘s stock price (dividend irrelevance theory). If you see the bigger picture, it’s actually long term investing strategy that allows allocation of cash flows into new assets (diversification) or consumption, both without reducing the share of ownership of an owned company. Selling ETF shares or individual shares is simply different, since selling shares effectively reduces your relative share of ownership compared to other investors. It will only be the same if other investors in dividend stocks re-invest their dividends in the same stock while you don’t.
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