3Settimana·

Strategy adjustment Growth & dividends

I am 42 years old and have an investment horizon of 20 years. I would like to combine some growth with dividends as a retirement provision.

Even though the portfolio is currently quite red, I am generally satisfied with the stocks. $RKLB (-0,27%) was once a gift and $MSFT (+0,41%) would be a bonus, so they are not self-selected.

I would like to invest a total of 6,000 euros per year for the time being, i.e. an average of 500 euros per month.

I have now changed the distribution as follows:

150 euros go into the $VWRL (-0,49%)

75 euros to the $ZPRG (-0,59%)

45 Euro to the $QYLE (+0,1%)

30 Euro in the $EUDF (+0,23%)

Would you weight differently here?

Up to now, I have saved 10 euros a month in the individual shares represented, but I will be making a quarterly one-off purchase of 500 euros. In this way, I can take advantage of opportunities and gradually build up the stocks or say goodbye to one or the other or add something new.

400 euros remain free each year, which I would like to use flexibly for $BTC (+0,22%) for example.

I like the mix of regular long-term passive investment and the opportunity to be more active on a quarterly basis.

17Posizioni

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18 Commenti

Harald@Madhatter5566

3Settimana

With a term of twenty years, you don't really need distributing ETFs now. And no yield brakes like covered calls either.

Yes, if it goes sideways, the covered will bring you something. If it goes down, you eat losses in the same way. But when it goes up, you simply leave profits behind. An investment should go up in the long term, otherwise you should leave it alone.

The same applies to dividends: this is a deinvesting strategy. For you, this means that you are making more effort now for twenty years from now. Without benefit. Dividends can be tracked with partial sales, and much more easily.

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Uvilo@Uvilo

3Settimana

@Madhatter5566 Good thoughts! I'm unfortunately not that disciplined and have realized that the monthly return somehow does motivate me a lot. Positive growth but also 😄.

But the CC ETF is actually the one I'm most critical of myself. Maybe it really does still have to go. Thank you!

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Max@bullish999

3Settimana

@Uvilo Dividends are very good. Don't let them unsettle you. They are part of the return.

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Harald@Madhatter5566

3Settimana

@bullish999 They are as pointless as a crop when building up the position and have no added value as long as they are reinvested. Worse, they are tax events, especially where they are not needed. Namely at the beginning of the investment, where every euro counts.

And at the end: unless you have planned them perfectly, you still have to sell part of them in order to live. Complete nonsense.

Of course, they are part of the return. But in the end, only the total return counts. And this is usually worse with distributing investments than with accumulating investments.

I understand that some people think dividends are magic money, but they're not.
You could also have part of your portfolio paid out every month, count it up and pay it back in. That's all you do when building up a position in dividends. But you have effort, trading costs, spread, your money is uninvested as long as it is paid out and not paid in again, etc.
Simply wasting time

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Uvilo@Uvilo

3Settimana

@bullish999 Thanks for the feedback! I've already learned that a dividend strategy is polarizing 🤗! Do you have a dividend favorite?

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Pleni70@Pleni70

@Madhatter5566 Mathematically, that's true. But you're always spoiled for choice as to what to sell and if you make the wrong decision, you regret it. I think dividends are a good thing for the head. But for 20 years I would add at least 50 % growth.

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Harald@Madhatter5566

@Pleni70 Or your dividends just sell at the completely wrong time for you.

None of this helps, you are no longer a small child

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Pleni70@Pleni70

@Madhatter5566 can now be discussed back and forth. Who always sells at the right time. It's also a personal matter where you feel more comfortable. But you're probably right in terms of the figures.

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Chris@Multibagger

3Settimana

For ETFs, there are much more competent opinions here than mine, but as far as savings plans are concerned, I would stick to monthly for cost average reasons, reduce the number and increase the amount per share saved.

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Uvilo@Uvilo

3Settimana

@Multibagger Yes, that's why I like savings plans so much! However, I would also like to be able to be somewhat active. Maybe I'll take half of the quarterly 500 euros in savings plans on the most important individual stocks and then only actively invest the other 250 euros. Thank you!

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Melly@melly-m

3Settimana

Nice portfolio. With a 20-year investment period, I would look to add a few more dividend growth stocks to the portfolio at good purchase prices.
(Possibilities are e.g. Zoetis, S&P Global, SNAP-on, CME, JPM, Fastenal, Watsco, ... - if the valuation is right, of course).
I think with such stocks you will have a good dividend yield in 20 years and will be happy not to have to get into them in the first place.

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Uvilo@Uvilo

3Settimana

Thanks for the feedback 👍! That's actually a point I would try to take into account when making quarterly purchases. Do you have a dividend favorite?

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Gomerdoc@Gomerdoc

1Settimana

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.

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Harald@Madhatter5566

1Settimana

@Gomerdoc Dividends are not magic money, even for individual stocks. They are deducted directly from the share price and are valued like a partial sale. There is no difference. You can see that dividends can be quite substantial, especially when dividends have already been approved and the share price then plummets due to other things. At the end of the day, the only thing that counts is the total return.

Whether the annual dividend increases or not is completely irrelevant. Just because you pay out a part more and then pay it back in.... what is supposed to happen except that you pay taxes? If you only withdraw, it doesn't do you much good either.... you just don't have to do it manually.

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Gomerdoc@Gomerdoc

1Settimana

@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).

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Harald@Madhatter5566

1Settimana

@Gomerdoc The first paragraph is nonsense. Your share number is not leverage. Please double check your math behind it. 1% of a thousand euro share is the same as 1% of 1000* 1 euro shares.

You don't need to act more. Rather less, especially when building the portfolio. Because you don't get paid out meaningless portions every month or quarter.

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Gomerdoc@Gomerdoc

1Settimana

@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.

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Harald@Madhatter5566

1Settimana

@Gomerdoc Your math is still wrong. There is no lever.

Your dividend, in the case of pure withdrawal, is deducted directly from the share price and reduces your share price accordingly. Your partial sale changes your number of shares, but does not reduce the share price.

Whether you invest 50 euros with one share or 50 euros with 1.05 shares changes nothing at all.

And no, the number of shares also goes with a comma for most providers....

You're getting something very wrong or you're on the wrong track. The mistake is probably that you are overlooking the price losses due to dividends as a result of normal growth. Hence the false statement that the share price remains the same as for non-distributing shares despite distributions. That is wrong.

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