5D·

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 (+0,07%) 58.50 % (dividend strategy)

$CSPX (+0,7%) 139.26 % ( Conservative)

$XAIX (+0,98%) 201.61 % (Growth Strategy)

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

$TDIV (+0,07%) 122,01 %

$CSPX (+0,7%) 160,03 %

$XAIX (+0,98%) 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

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

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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Tenbagger2024@Tenbagger2024

@Dividendenopi
I have just added a contribution by Gerd Kommer. Very interesting

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Joris@JorisInvests

23H

@Tenbagger2024 which is incorrect, as historically dividend stocks have outperformed non dividend stocks, only over the last 20 years they are underperforming growth (so not over more than 20 years). In the lost decade 2000-2010, the dividend aristocrats outperformed as well. It is since 2012 till 2024 that dividend stocks underperformed growth stocks (and the distinction between the two groups is also not really black and white) and this by a lot (unfortunately for us dividend investors, but that is just the way it goes and in the meantime I can buy much 'cheaper' than growth investors).
In 2025 dividend portfolio's are doing just fine. AI oriented portfolio's are performing exceptionally well, now for a few years already, but the valuations of 80% of those companies is built on thin air and when I hear and read more and more about that it is because of how AI is the future and profits will come and PE is not valid for evaluating those stocks, the more I have the feeling we are back in 1999-2000.
For every reference you give I can give ten others and in return you can give 20 back. It is a neverending debate, and neither one is completely right or wrong. I love dividends and I'm missing out on gaining a lot with ASML, AMD and Nvidia, but I'm happy with my lower return, as I'm taking less risk.

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Tenbagger2024@Tenbagger2024

23H

@JorisInvests
You are right. It's the mixture that makes the difference

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Konstantin@Konstantin85

Buybacks rather than dividends

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All-in-or-nothing@All-in-or-nothing

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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Tenbagger2024@Tenbagger2024

@All-in-or-nothing
My dear, good point . I chose the Van Eck because it is very popular here. Perhaps I should have chosen an accumulating one.
My tool only showed me a horizon of 10 years.
Maybe you could do a new analysis with your tool to prove us wrong.
I don't want to talk down the dividend strategy either
But companies like Unilever always make my hair stand on end 🙈

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Tenbagger2024@Tenbagger2024

@All-in-or-nothing
You can also see that in April the x Tracker really fell to its knees. However, it subsequently recovered significantly faster. Of course, you have to be able to withstand such volatility.

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Patrick Z.@PatrickZwartjes1975

If you reinvest the dividend with Tdiv, it is not inferior to a vwce

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Epi@Epi

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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Tenbagger2024@Tenbagger2024

@Epi Thank you dear, I think that's a very important contribution from you. You are also somehow the Kommer of getquin

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Epi@Epi

@Tenbagger2024 Well, on the one hand, I like Kommers' commitment to passive index investing. On the other hand, I think he sometimes overdoes it and backs up his statements with distorted statistics, maW he sometimes twists the numbers to make it fit.

There are also more long-term charts on the subject of dividend strategy and then things look different: https://gfmasset.com/2020/08/over-time-high-dividend-stocks-outperform-low-dividend-stocks/

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Tenbagger2024@Tenbagger2024

@Epi
Yes, exactly, that's why everyone should choose the strategy that helps them sleep well.
We both get on well 😘

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devnerd_daddy@devnerd_daddy

@Epi I think you always have to look at what investors understand by high-dividend. For some, Microsoft is already part of it, others don't do it at $AGNC and while the former is a good stock, the latter is more likely to be dirt.

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Epi@Epi

@devnerd_daddy That's right, basically for every study it would have to be defined exactly what is meant by "high dividend", how often you rebalance and with which rules, etc. This is usually all completely unclear and so you end up with whatever result you want. 🤷

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Olli@EisenEnte

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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Uwe@SchlaubiSchlumpf

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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K@TechNav

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

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Tenbagger2024@Tenbagger2024

@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

@TechNav
@TomTurboInvest might take another look at it 😘

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Dividendenopi👴@Dividendenopi

@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

@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

@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

@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

@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

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

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

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

@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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