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De-compounding your investments. 💪
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@Epi Why? Since ETFs are taxed in advance, that shouldn't really make much of a difference anymore, should it?
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@Epi There’s one thing you shouldn’t forget—of course, everyone sees it differently—but dividends can have a huge psychological impact! It’s helped me out many times 😉
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@Part_Time_Joe The problem isn't the tax; it's that money is being taken out of the investment process.
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@BavarianLion The psychological effect is undeniable. Ask yourself where it actually comes from. Is it the lower volatility of the dividend amounts, or is it the illusion of generating passive income, or is it the sense of self-efficacy, or...?
Those who understand themselves can optimize their investments accordingly.
Those who understand themselves can optimize their investments accordingly.
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•@Epi That might be intentional; for me, for example, the dividends help me rebalance my Level 1 allocation.
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@Epi I think for me, it’s a mix of all the points you mentioned! But I’ll be completely honest here: I’d rather give up a little return if the dividends help me stick with it for 20+ years! Yeah, maybe that’s silly, but in the end, everyone has to find what works best for them!
And in terms of performance, my two dividend ETFs aren’t doing too bad at all! Sure, I’d have a higher return if I’d just stubbornly thrown everything into the FTSE All World… but like I said, sometimes the psychological aspect matters, too! 🙂
And in terms of performance, my two dividend ETFs aren’t doing too bad at all! Sure, I’d have a higher return if I’d just stubbornly thrown everything into the FTSE All World… but like I said, sometimes the psychological aspect matters, too! 🙂
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@Epi I just wanted to add that dividend stocks don't necessarily have to perform poorly! For example, I initially viewed HSBC as a dividend stock, and today I've seen a return of nearly 80%!
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