5Mês·

Growth or dividend strategy " the never-ending story "

Hello everyone, the last few days have once again been about the old topic.

It was about an investment horizon of 20 years and more.

And as I can often see here again and again. A lot of young people here also start with a rather conservative dividend strategy.

Every time I ask myself the question "Does that make sense? ".

To symbolize the strategies in history a little, I have compared three ETFs over an investment horizon of 10 years.

Performance 10 years

$TDIV (+0,57%) 58.50 % (dividend strategy)

$CSPX (+0,49%) 139.26 % ( Conservative)

$XAIX (+0,24%) 201.61 % (Growth Strategy)

Chart from love @TomTurboInvest since 2019 (@TechNav ) (@Dividendenopi )

$TDIV (+0,57%) 122,01 %

$CSPX (+0,49%) 160,03 %

$XAIX (+0,24%) 228,53 %

With a big thank you to @TomTurboInvest 😘

I was amazed at how quickly the Growth ETF recovered after the bear market in 2020. And also from the 🍊 mini crash in April. But of course, this volatility is not for everyone.

Here is an interesting article from

from Gerd Kommer and Alexander Weis

I have only included the conclusion here.

( @All-in-or-nothing It is also mentioned here that the dividend payout is almost always at the expense of performance. And is therefore not really a gift. It also mentions that a dividend strategy has not been more successful over 20 years or more).

Conclusion

Historically, dividend investing has tended to produce poorer returns than comparable investing without a dividend focus. Dividend stocks also offer a significant advantage in terms of risk.

Science and logic see more disadvantages than advantages in dividend-oriented investing.

However, the lack of systematic benefits of dividend investing will not prevent the financial industry, the financial media and an army of financiers from continuing to encourage private investors in the false belief that dividend investing has real, objective, lasting benefits in order to sell expensive products or increase circulation and click-through rates.

If you want to understand the facts in detail in the scientific literature, we recommend the study by Hartzmark/Solomon (2019).

Full article ⬇️

https://gerd-kommer.de/blog/dividendenstrategien-fakten-und-fantasien/

My dears let's go into dialog, I'm looking forward to it.

@Epi
@Iwamoto
@Max095
@Dividendenopi and everyone else.

My dear friend @TomTurboInvest can you perhaps make us another chart over a longer horizon?

You are the professional with the best tools

30 Comentários

HumanWithCap@realarb

5Mês

For me personally, it's quite simple: if you start out on the stock market in your younger years, you like to invest more in growth shares or almost exclusively in growth shares. Later in life, you want to protect your assets and switch to dividend shares in the classic way, like a Coca Cola, for example.

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Dividendenopi👴@Dividendenopi

5Mês

As the TDIV was only launched in 2016, the comparison is not entirely "clean". And the pure price performance is not accurate. I had a quick look at Extra ETF, where the total performance including distributions is given as 166.37% since inception

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Konstantin@Konstantin85

5Mês

Buybacks rather than dividends

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Olli@Olli

5Mês

In my opinion, 10 years is far too short an observation period to be able to determine this. Since 2015 there has only been the corona crash, the rest were smaller corrections. And regardless of that, we have been living in a money printing phase since 2008. Who says it will always stay that way? An analysis since the 80s would be interesting 👌🏻 although unfortunately I don't know where to get the charts myself 😐

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Get_Rich_or_Die_Tryin@Get_Rich_or_Die_Tryin

5Mês

In my view, the 10-year period for the performance comparison is not accurate. I'm missing the 2008 financial crisis, when things really got rocky. In my view, this is a decisive factor for comparing performance. Another question that arises for me is: are distributions taken into account in the performance of $TDIV?

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Epi@Epi

5Mês

You're drilling a big hole there! 😅

In the end, most people here will continue to pursue their dividend strategies, not because they are rational, but because they feel good. I would agree with Kommer: better than nothing. 🤷

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Ver todas as 5 restantes respostas

Uwe@SchlaubiSchlumpf

5Mês

If I understand correctly, Kommer has also explicitly not done one thing: he has looked at growth.

I wouldn't compare growth and dividend either, as dividend is actually only one small characteristic. But growth is a sum of characteristics. (Tendency towards lower dividends, higher debt ratio, higher P/E ratio, more innovative sectors). Would rather put growth and value next to each other. Or dividend-weighted and without dividend weighting.

Otherwise I see it like @Epi. A dividend strategy is better than not investing. But if you are deliberately targeting dividends, you should ask yourself whether you prefer the psychological benefits to the tax benefits (of not focusing on dividends).

https://www.dimensional.com/de-de/insights/when-it-is-value-vs-growth-history-is-on-values-side-de?utm_source=perplexity

Could be interesting. (And yes I looked for the source with perplexity 😅)

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Mr. K@TechNav

5Mês

I think the performance of trading view stated here is not quite correct

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Tenbagger2024@Tenbagger2024

5Mês

@TechNav
Then I refer you to the article by Gerd Kommer.
Here the whole subject is examined in much more detail.

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Tenbagger2024@Tenbagger2024

5Mês

@TechNav
@TomTurboInvest might take another look at it 😘

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Dividendenopi👴@Dividendenopi

5Mês

@Tenbagger2024 I know the article, it is really well written and for me it is the quasi-deadly argument for dividend strategies, it is often used in such discussions and serves all narratives, similar to the "revenge club" 🤷‍♂️😉😉.

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Tenbagger2024@Tenbagger2024

5Mês

@Dividendenopi
Yes, as I said. I don't want to divide the community here either.
Splitting does 🍊.
We all have something in common, and that is investing.
Maybe choose the middle way, there are also great growth stocks that pay dividends.
The growth stocks of today are the dividend stocks of tomorrow.

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Dividendenopi👴@Dividendenopi

5Mês

@Tenbagger2024 There are many different strategies and also "plans" for your own investment here, finding a middle ground for the majority would be boring, at least for me. The forum here thrives on controversial discussions, everyone can take something away from it and incorporate it. If I were young, I would probably have a completely different portfolio structure to build up capital. As I am old and the capital is available, price performance takes a back seat, cash flow counts and preserving the capital invested is enough "performance" for me.

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Tenbagger2024@Tenbagger2024

5Mês

@Dividendenopi
That also sounds sensible. But I think it's very good that you wouldn't necessarily advise our younger investors to follow the pure dividend strategy either. Buffet always says buy what you know and understand. Everyone knows Unilever and thinks they understand it, but very few people seem to be concerned with the multiples.

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Novius@Novius

5Mês

@Dividendenopi Exactly my perspective.👍🏽 I always advise my boys (both >20) or young people in my circle of friends: invest in growth, not in dividend stocks. For me at >50, however, the investment objective is different

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Der Spekulant@Derspekulant1

5Mês

Tech has been the best-performing sector in recent years; only recently have Mag7s started to pay dividends, and there was a reason for this 👍🏽

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Markus@KohleKompass

5Mês

From my point of view, one advantage of accumulating ETFs is that the income continues to generate returns virtually untaxed. (Almost: upfront lump sum is due)

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devnerd_daddy@devnerd_daddy

5Mês

Absolutely. Focusing purely on dividends was also my big rookie mistake. In the meantime, I don't care about the amount of the payout, but I still get something in from time to time.

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TomTurboInvest@TomTurboInvest

5Mês

@Tenbagger2024 The $XAIX was only launched at the end of January 2019, so a comparison with a longer horizon is not possible.

The comparisons also look different depending on the currency, e.g. all 3 on XETRA in euros look like this https://www.tradingview.com/x/honX4AOl/

PS: TDIV = VDIV on Xetra, CSPX = UBU9 on Xetra

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