Automatic reinvestment of dividends with Ing.

From €75 for ETFs and free of charge.

I like it

Last year, there was a distinct lack of snow in December. Instead, the portfolio did really well and I made progress with my crypto sell-off strategy. A small cold in the fall, despite taking good precautions, set me back in terms of ice bathing and hiking, but fortunately I was healthy again by Christmas. Unfortunately, that wasn't all... Time for a look back.

I present the following points for the past month of December 2024:

➡️ SHARES

➡️ ETFS

➡️ DISTRIBUTIONS

➡️ CASHBACK

➡️ AFTER-PURCHASES

➡️ P2P CREDITS

➡️ CRYPTO

➡️ WHAT IS REALLY IMPORTANT

➡️ OUTLOOK

➡️ Shares

$AVGO (-5,25%) is back on the tube. Wow, at +276%, the stock is now up for me. After the share cooled down a little, it went to the moon again in December.

$NFLX (-5,74%) and $SAP (-5,31%) are on a par with the previous month in terms of performance and are still in 3rd and 4th place in terms of volume. $WMT (-3,92%) . The retail chain will soon become a doubler for me.

The red lanterns will once again go to the usual suspects $NKE (+3,05%) , $DHR (-7,55%) and $CPB (-2,13%) . In terms of performance, all three stocks are down between -30% and -20%. They are the smallest positions in my main share portfolio with the $DHL (-6,85%) However, across all portfolios, the smallest positions are the new additions $SHEL (-7,19%) and $HSBA (-7,02%) .

➡️ ETFs

The ETFs are doing their thing as usual. This month, I immediately invested a refund from the previous year's utility bill in the $GGRP (-5,6%) and $JEGP (-3,59%) invested. I'm always expanding this asset class in particular with cash inflows. I don't care about timing. The money should go into the assets so that the stream of distributions keeps growing. I buy income and want cash flow.

➡️ Distributions

I received 34 distributions on 14 payout days in December. I am grateful for this additional income stream. My minimum target has been met anyway in this high-distribution month. The snowball rolling down the slope is getting bigger and bigger.

I already donated part of the dividend at the beginning of the month. This is based on the conviction that you can (and should) give something back, no matter how small, if you have the opportunity to do so.

➡️ Cashback

In November, I received €6 from redeemed Payback points, the equivalent of which I transferred from my grocery account to my settlement account. As already mentioned, there was also a credit from the utility bill. REWE and Penny have now separated from Payback, while Edeka, Netto Markendiscount and Marktkauf have joined. All three new stores are not in my immediate vicinity, which is why I will earn fewer Payback points in future. I will most likely collect the points mainly at DM. REWE and Penny now have their own bonus programs. REWE's will be exciting, as I can also save up credit with my purchases. I will deduct this discount from my grocery account and invest it in the same way as before. I'll see over the year whether it pays off more than Payback did back then.

➡️ Subsequent purchases

As already mentioned, there were additional purchases at $JEGP (-3,59%) , $GGRP (-5,6%) and $SPYD (-4,84%) . I always invest every little return or leftover money to further increase my portfolio. This buys me freedom.

➡️ P2P loans

I was finally able to get rid of Peerberry. Now only Mintos is hanging on my leg like a log. A mid-double-digit amount, which has long since defaulted, is still waiting to be refunded or written off.

This asset class will soon be history for me.

➡️ Crypto

All in all, December was another exciting month for crypto investors. Limit orders were triggered again for me. The last tranches $LINK (+2,29%) have left me, as has a first tranche $UNI (+1,66%) and a first tranche $BTC (+0,91%) . I have invested the proceeds in $HSBA (-7,02%) and $SHEL (-7,19%) invested in the separate portfolio. I have already explained my underlying strategy in detail, which you can read about in my articles. Recently, the crypto market has been in a sideways phase again. I'm hoping for another breakout in January to trigger further limit orders, as I still need to buy a security so that the separate portfolio pays me a return each month. So far, only two out of three quarterly months are covered. The two new stocks have even performed well in this short period of time, gaining around +3.6% within a month. The last purchase will perhaps be an ETF. You will see more about this in the coming reviews. I am already looking forward to collecting again in the coming bear market and will then certainly write an extra post with the levels at which I will gradually enter again.

➡️ What is really important

I remember December as a good month in financial terms, but unfortunately Christmas was overshadowed by tragic events this time.

After recovering from my cold at the beginning of the month a few days before Christmas Eve and getting back to my daily routine (consisting of work, running, ice swimming, hiking and my love of finance), I received the terrible news from Magdeburg. I am simply stunned and ask myself "why?". I am not affected, I am not one of the bereaved and I don't know any of the victims, the wounded or the bereaved personally, yet this event brought me down on the evenings around the Christmas holidays. Loyal readers know that I am working on a closer relationship with my ex's kids. Even though my blood doesn't run through their veins, questions ran through my mind about what if they were affected by the horrific act, or me? It could have happened anywhere. At least in the event of my untimely demise, I also made appropriate arrangements in the last few days of the year to ensure that what I leave behind ends up where I want it to be. I spent the turn of the year with the kids and the time I spent with them was the best end to the year imaginable. It's nice when connections continue to exist and you remain part of the life of the Kampfzwerge and can continue to accompany them through life.

➡️ Outlook

New year, new luck. I'll be surprised what the new year will bring. There will be a separate post for the evaluation of 2024 as a whole. I'm particularly happy because I exceeded an important goal despite a few expenses.

Links:

Social media links can be found in my profile, you can also check out the Instagram version of my review.

Weekly at TR

$GGRP (-5,6%)
$TDIV (-4,93%)
$JEGP (-3,59%)
$JEPQ (-4,98%)
$FGEQ (-5,26%)

It continues at Ing, but only monthly

On the 7. $SPYD (-4,84%)
$VUSA (-5,34%) and $HMWO (-5,73%)

I hope I can keep up the pace with the savings plans 🤣 as they say @Simpson ? "For a simple man" (and I count myself among them) this will be a challenge. If so, and I hope nothing extraordinary comes up, then that's a great sum for me/us to put aside and create value.

Oskar is still marginally involved with the VL, but my employer is a bit stingy about that.

Happy new year, good luck in 2025 and, above all, stay healthy, otherwise it's all for nothing anyway. What you do for

Disclaimer: No investment advice or recommendation, this article is for information purposes only. Before you decide on an ETF, take a closer look at it in terms of positions

take a closer look at positions, sampling, regions, etc. I can't describe all of this

I can't describe everything, as it would go beyond the scope of this article

Part 1 (definition, categories & Z-score and quality factor): https://getqu.in/RCSY4a/

Part 2 (Value ETF): https://getqu.in/Nfnhqb/

Part 3 (Low Volatility ETF): https://getqu.in/Ub7KpG/

Part 4 (Momentum ETF): https://getqu.in/CNMgGw/

Part 5 (Small and Growth ETF): https://getqu.in/0NoqmW/

What are dividend ETFs?

Abbreviated what dividends are, since everyone here probably knows this: distributions by a company to its shareholders, the amount is usually voted on at the annual general meeting and is usually paid out of profits, but does not have to be (if it is paid out of the substance, this is often counted as a bad indicator).

Dividend ETFs are therefore primarily ETFs that distribute the dividends paid by companies to the ETF holders; they are also referred to as distributing ETFs (Dist.). In contrast, an accumulating (Acc.) ETF uses the dividends to buy more shares, i.e. it reinvests.

Because the dividend ETF distributes money, I get cash flows back from my investments, usually on a quarterly basis. These ETFs are celebrated - especially on social media - as a form of passive income and have their advantages but also disadvantages, which we will examine in more detail below.

Dividends as a value premium (CAPM /French Fama model)

Short recap (in more detail in part 5): French Fama's 3 factor model raises beta (volatility), size- and value-premium as factors to determine the expected return of an investment. Dividends are not explicitly mentioned as a factor, but they are indirectly included in the value and beta factors, as a company must first be able to afford to pay dividends.

must first afford to pay dividends. Growth and small-cap companies

often do not yet pay dividends, as the revenue generated is used for more growth

growth or the balance sheets are not yet as sustainable. Dividend payers often have a stronger balance sheet, which makes them less volatile to changes in interest rates, for example (although this reduces the expected return according to the CAPM). Exceptions are high dividend payers, which are often riskier and reward investors with a high dividend for holding the share.

The fact that dividends also count as a quality factor can be clearly seen in the dividend aristocrats. These are companies that have been paying dividends continuously for 25 years and increase them annually. This makes them particularly attractive, which is why they can also be invested in via individual products such as the $SPYD (-4,84%) are investable.

Dividends are also included as a valuation factor in the Quality ETF as a positive valuation criterion (see also Index Methodology Part 1)

Historically, several studies for the US market show an outperformance of dividend stocks, especially even high dividend payers:

https://www.hartfordfunds.com/insights/market-perspectives/strategic-beta-etfs/what-drives-dividend-stock-performance.html

https://www.globalxetfs.com/content/files/High-Dividend-Stocks-In-Rising-Interest-Rate-Environments.pdf

In the recent past, however

However, high-dividend stocks have underperformed in the recent past, with the ACWI High

Dividend has significantly underperformed the MSCI ACWI over the last 10 years (- 100 %).

Classes of dividend ETF?

In my view, dividend ETFs can be roughly divided into 3 categories:

- Dividend as a windfall: The focus of the ETF is not on dividends, but some companies are included in the index that pay dividends and these are then distributed to the holder. A classic example is the dividend-paying $VWRL.

- Quality dividend: The focus is on achieving dividends, but these are accompanied by quality factors such as dividend aristocrats or quality dividend ETFs

- High Dividend: The highest dividend yields are targeted here, whereby quality factors may play less of a role.

Why high dividend yields can be a problem

Unfortunately, I have often overheard conversations that sound like: "VW is so cheap, you get a 10% dividend yield, you can't go wrong". But that brings us to the problem of high dividend yields, because these are often a signal of structural weakness in the company and/or a sharp fall in the share price. If the dividend yield remains at this level, this could seriously jeopardize the company's long-term financial strength. If the dividend yield remains

and is even reduced, the original investment case is invalidated.

So even if the unsystemic individual risk in ETFs often "diversifies away", it is important to take another look at the largest positions and check whether this is not a structurally weakening company.

Advantages of dividends

In addition to the potential value premium mentioned above, dividends fulfill a different purpose at an individual level, depending on the stage of life: for most people reading this, this purpose is likely to be psychological, as they are not dependent on the cash flow from dividends.

cash flow from dividends. The dividends are then a nice motivational effect and

offer the "peace of mind" of a steady income even in the event of market setbacks

and therefore less worry about declining book profits.

Once you have reached an advanced age, the dividend offers a high comfort factor. This means that there is often no need for rebalancing or a withdrawal plan, as would be the case with accumulating ETFs. The dividends are then used as additional income for retirement; of course, withdrawals can also be made, but not to the same extent as would be necessary with accumulating ETFs.

would be necessary.

Disadvantages of dividends

Taxes! Because payments are distributed to the holder, capital gains tax, solidarity surcharge (26.375% in total) and, if applicable, church tax are also due. This tax is first deducted before I can reinvest the dividends, and reinvesting the dividends costs extra (even with neobrokers via the spread between the ask and bid price). Dividends therefore have a detrimental effect on the compound interest effect of the ETF's profits.

Although accumulating ETFs have been brought somewhat into line with dividend ETFs in terms of taxation with the advance lump sum taxation, they still offer the advantage that the tax burden is always lower than for dividend payers (if the dividend ETF has distributed less than the advance lump sum, an advance lump sum is also charged).

Another negative aspect that goes hand in hand with the above is market timing. Often not every small dividend is reinvested directly, but accumulated until, for example, EUR 1,000 is reached in the clearing account. If the market has then run away, you wait for a setback and may miss the entry or at least lose the lost performance where the money was sitting in the settlement account without earning interest.

account without interest. There is also more work involved in the savings phase due to the necessary reinvestments.

Tax comparison high-dividend vs accumulating (example 2024)

Assumption that the tax-free amount has already been exhausted

Investment amount: 100,000

ETF1: Vanguard FTSE ACWI High Dividend ($VHYL (-4,8%))

ETF2: iShares MSCI ACWI ETF ($ISAC (-4,53%) )

Tax Burden High Dividend:

Price at the beginning of the year: EUR 57

Shares: 100,000 / 57 = 1,754.39

Dividend per share: EUR 1.94

Absolute dividends: EUR 3,403.51

Partial exemption ratio: 30%

Tax (26.375 %) = EUR 628.38

Tax burden accumulating ACWI

Fund value at the beginning of the year: EUR 100,000

Prime rate 2023 (for 2024): 2.55%

Base yield (70%): EUR 1,785

Partial exemption rate: 30%

Up-front lump sum: EUR 1,249.50

Tax (26.375%) = EUR 329.56

There is a tax disadvantage of around EUR 300, which is thus withdrawn from compound interest.

For whom are dividend ETFs worthwhile?

In summary, the disadvantages of strongly dividend-oriented investing outweigh the advantages for me. Of course, there are many shades of gray between focusing on high dividends and reinvesting. Dividends as an addition - especially as they often come with a premium - make perfect sense, but the explicit focus on high dividends can be dangerous and has tax disadvantages.

Dividend ETFs are therefore primarily for investors who want to generate income regardless of the current market phase and appreciate the stability of the cash flow. If the dividends also ensure that you can sleep better at night when the market fluctuates and are not tempted to panic sell, then the small tax disadvantage is no reason not to invest.

the small tax disadvantage is no reason not to invest in dividends. Also

It also has its charm to have a less intensive withdrawal phase in old age.

withdrawal phase. So if you are emotionally affected by market fluctuations, appreciate regular income and are convinced of the dividend premium (as part of the value premium), then dividend ETFs are just right for you.

👉Dividends-ETFs:

Performance comparisons incl. dividends

$VHYL (-4,8%) (World | TER 0, % | Tracking Difference -0.04 % | DivRendite 3 %| EUR 5 bn invested volume | 3Y underperformance vs. MSCI World - 5 %pt | 5Y underperformance vs. ACWI - 30 %pt | 10Y underperformance vs. ACWI -100%pt)

• Index methodology: Based on the FTSE All-World Index, which includes large and mid-cap companies from developed and emerging markets worldwide. REITs are excluded. Companies are sorted according to the expected 12-month dividend yield and the stocks with the highest dividend yield are selected. The aim is to achieve around 50% of the market capitalization of the original index and then to weight these companies according to their size in the index.

$TDIV (-4,93%) (World | TER 0.38 % | TD 0.47 % | Div yield 4.3 % | EUR 1.2 bn invested | 3Y outperformance vs. ACWI + 18 %pt | 5Y underperformance vs. ACWI - 7 %pt | 8Y underperformance vs. ACWI - 38%pt)

• Index methodology: Screening for consistent dividend payers with ESG relevance. Weighting by dividend max. 5% per share and max. 40% per sector. Selection of 100 stocks with the highest dividend yield. Semi-annual rebalancing

$SPYD (-4,84%) (US | TER 0.35 % | TD -0.07 % | Dividend yield 1.5 % | 3.5 bn invested | 3Y underperformance vs. S&P 500 -23 %pt | 5Y underperformance vs. S&P 500 - 63 %pt. | 10Y underperformance vs. S&P 500 - 283%pt.)

• Index methodology: Includes components of the S&P Composite 1500, then selects for companies with the highest dividend yield whose dividends have been increased for the last 20 consecutive years. Furthermore, minimum requirements for market capitalization and liquidity of the share must be met. Maximum weighting per share 4%.

$SPYW (-5,41%) (Europe | TER 0.30 % | TD -0.35 % | DivRendite 3.7 % | 3Y underperformance vs.

Eurostoxx 600 - 1 %pt. | 5Y underperformance vs. Eurostoxx 600 - 24 %pt | 10Y underperformance vs. Eurostoxx 600 - 28 %pt.)

• Index methodology: Based on the S&P Europe Broad Market Index, companies must have increased or maintained stable dividends for 10 consecutive years, selection of the 40 companies with the highest dividend yield and weighting accordingly. Max. 5 % per share, 30 % per country/sector.

Conclusion - what remains: A balanced strategy with dividends as an admixture can make sense, whereby the focus should be on quality dividends rather than high payouts.

#smartbeta
#etf
#dividende

$SPYD (-4,84%) my last outstanding dividend for this year has thus been announced

0.3522$ (currently 0.336€) - this means that the total distribution for this ETF for the year in € is down by approx. 3%.

https://www.ssga.com/ie/en_gb/intermediary/resources/documents/dividend-distributions

The popular $O (-2,42%) is currently the second largest position in this ETF with 2.18%.

Payment on 31.12. and then it's rum again with 2024 😅

The gray November showed what it can do. Rain, clouds, cold and wet. It was just the perfect weather for me to go hiking and ice bathing. Especially in the second half of the month, the temperatures headed towards freezing point. I was finally able to hike and ice bathe in temperatures that were perfect for toughening up. So while I was trudging through Saxon Switzerland in the first decent snow from sunrise to sunset and bathing in ice water at 1°C for two proud minutes, on the other side of the pond the newly elected president unleashed the "Trump wave", which lifted all our deposits and wallets. Time for a look back.

I present the following points for the past month of November 2024:

➡️ SHARES

➡️ ETFS

➡️ DISTRIBUTIONS

➡️ CASHBACK

➡️ AFTER-PURCHASES

➡️ P2P CREDITS

➡️ CRYPTO

➡️ WHAT IS REALLY IMPORTANT

➡️ OUTLOOK

➡️ Shares

$AVGO (-5,25%) , cooled off in terms of performance in the past month. Of course, its +169% is impressive, but the positions behind it are not sleeping. $NFLX (-5,74%) is close behind with +151%. This also applies to the volume invested. It's hard to believe that the streaming giant is doing so well. I didn't think the company would see such rosy times again. All due respect! Together with Netflix, it is also $WMT (-3,92%) in terms of volume and is already at +89% in terms of performance. I would hardly have expected such a boring business model to deliver such a stable performance. At the lower end $DHR (-7,55%) Dick is still in the red. For me, this is still the result of the unbundling. $NKE (+3,05%) and $TGT (+1,89%) have problems with their business figures and $OR (-1,22%) certainly also. I would be happy to add to this, if only I had significantly large sums to spare.

➡️ ETFs

I'll spare myself the typical "everyone has to have this" blah-blah-blah this time and my $VWRL (-4,62%) is the heavyweight of my entire securities portfolio at 13.41%. You know what I mean. The only thing I have to say is that financial education in Germany is still inadequate and something needs to be done about it. Now one party is stating in its platform that capital gains should be taxed as a secondary type of income like a main type of income. Such a demand is simply the result of a lack of financial education and - excuse my language - stupidity. For me, this party is absolutely unelectable. But that goes beyond the scope. Politics does not belong in my program, but perhaps there will be a separate post here about why I am ultimately an absolute fan of the capital gains tax - simple flat tax. Hopefully, more and more young people will join the capital markets and use their votes to ensure that left-wing non-performance-related blah-blah-blah will soon be a thing of the past. Because we must not leave Germany behind.

➡️ Dividends

I received 19 distributions on 8 payout days in November. I am grateful for this additional income stream. My minimum target has been met again. Even in this low-distribution month. I can therefore now safely increase the size of the reinvestment of the distributions. From next month, €105 will be reinvested instead of the planned €80. I have already explained how my reinvestment strategy works in a separate article. The snowball rolling down the slope is getting bigger and bigger.

➡️ Cashback

In November there was a small payout from the health insurance bonus program. Otherwise the month was poor in terms of cashback. But that will come again in December.

➡️ Subsequent purchases

Two small additional purchases were made to boost the cash flow in my old portfolios On November 7 and 8, small sums went into the $GGRP (-5,6%) and $SPYD (-4,84%) .

➡️ P2P loans

I want to continue to cut back and get rid of the two remaining platforms. Only Mintos and Peerberry are left. There has been no interest for a long time.

This asset class will soon be history for me

➡️ Crypto

Wow! What a month. The red Trump wave has really boosted my crypto portfolio. Can you still remember the days when $BTC (+0,91%) were bobbing around at under 70K? The price level was totally unusual. I'm wide awake now and haven't just been on the sidelines for a long time. I regularly check the prices and a few indicators. The first limit orders were already triggered at $xrp in November. At USD 1.10, this token was kicked out of my portfolio. Of course I could have done more, but I went home with a good profit. As I write now, the next limit orders will be triggered soon. I described how my strategy works, what assumptions I make and where I see the exits in great detail in two posts earlier this month. As of now, no subsequent dividend stock or dividend ETF has been bought from the proceeds, from whose dividends the additional purchases will be made in the new bear market. But I am sure that this will happen this year.

➡️ What is really important

Thanks to the automation of long-term wealth accumulation, there is enough time to focus on the important things in life. Because the end of it is sure to come.

With a healthy lifestyle, I want to delay the end as much as possible. And yet I'm currently thinking about who I want to leave my estate to at some point. It certainly won't be the state, it's already cashing in well on taxes. Regular readers can now imagine who might be in my favor. I'll have to deal with the subject of wills at some point. In any case, I want to sort it out somehow when I'm young, even if it's subject to change.

At the end of the month, I spent time with the kids again, whose father I would have liked to have been myself. The older one has now reached an age where she's slowly beginning to realize that she's not growing up in such good financial circumstances. After I made a firm commitment to her during our trip to Berlin to support her with her dreams and her future, I also took action. It is important to me to introduce the child to financial education step by step. My principle is not to encourage and challenge at the same time. Let's see how well I succeed, I'm certainly very optimistic.

➡️ Outlook

Why I have dollar signs in my eyes when I see my utility bill and where I'm donating some of my earnings in December, as well as the further course of my implemented crypto strategy, will be revealed in December. In any case, the month is full of excitement, as 2 more cryptocurrencies will soon be released from my wallet.

Links:

Social media links can be found in my profile, also feel free to check out the Instagram version of my review.

Hello everyone,

I would like to add a few stable dividend payers to my portfolio.

Currently I have $O (-2,42%) and $BLK (-7,33%)

I was thinking of investing in an ETF that specializes in high dividend yields instead of buying more individual shares. Also to reduce the risk.

Are there any recommendations from the community with good experiences?

I have currently looked at:

$SPYD (-4,84%) and $DHS (-5,86%)

I would appreciate some suggestions - thanks!