Yes, but to get any return that’s usable in the real world means selling, and that’s challenging for me and others for various different reasons, logical or not, that’s the point of the whole thread!
I’d disagree too, the “superior” investment mindset belongs to those who feel good about their strategy and won’t ever freak and lose money with it, because that’d be real money lost. Total maximum return is an excel exercise and is only known after the fact, whereas we’re trying to be future-looking, not what one could do on the 1st of April 2025 but where one wants to be on the 1st of Jan 20XX.
Understood! I wrote that it doesn’t work for me and it is totally fine if it works for others. With regards to the BRK.B, it seemed to me initially that you were using the dividends continuously for buying/selling. All good.
While I agree wholeheartedly with the content of your post, it kinda misses the point of this thread, no? You talk about all the rational (and correct!) reasons how one should invest, but we are humans after all that are emotional and irrational (some more so, some less).
And the point @Mirager, me and others are making is that if focusing a bit or a lot on dividends enables you to be a more rational investor, you’d still come out ahead at the end of the day.
Folks most of us here are investing in global market ETFs
They (distributing or acc versions) both have exactly the same total return. If someone reinvests dividends manually into same fund, they would also have same long term return minus reinvesting costs.
This means for all practical purposes - financially speaking - they are equivalent. I think no one is even arguing about it.
Hence if someone is feeling happy about distributing versions , then why do we need to prove them wrong? Happiness is personal. It doesn’t need to be mathematically proven.
You’re being very dogmatic, check out what Buffett says about buybacks vs dividends, both can either be bad or good, with the difference that buybacks can offer perverse incentives to cook the numbers…and at the same time dividends can lead to cannibalizing an otherwise good business, or digging a bad business into an even deeper hole. It’s not so black and white and neither was my post.
Need to differentiate between dividend paying shares / ETFs holding dividend paying shares Vs non dividend paying ones and acc vs distributing ETFs here.
Whereas there’s somewhat of a difference between dividend Vs not dividend paying shares, if you buy the Acc or Dist version of the same ETF is basically non relevant.
There are three ways to return value to shareholders
pay dividends
Buy backs
Invest the earnings back into company (assuming company will grow future earnings using this new capital infusion)
All three can be effective or ineffective depending on which company are we are talking about and who is the investor
For example -: if AT&T stops paying dividends and start using option #3, then they are saying investor don’t have a better use of money than investing in AT&T. I think their stock price would fall down dramatically because of course there are better companies out there
Now Google / Berkshire employing option #3 can getaway because they have shown to outperform & have higher return on capital than most companies.
To be honest #1 & #2 largely depends on income vs capital gains tax where investor is domiciled.
Not dogmatic at all. Purely based on facts. I would rather the management reinvested cash flows into a growing business. Sooner or later that will be reflected in the share price.
I mainly commented on messages in this thread that were outside of the dividend VS no dividend logic. Like selling after 7%, buying other stocks with dividend money.
For the distributing VS accumulating part I totally agree. If it works for someone it is totally fine. Even wrote that it is Unfortunate that distributed versions do not make me happier
All good. I see value in this thread. We are not machines and any ideas that will help us keep on track with less worry are more that welcomed.
Yeah, a global market distributing ETF typically distributes what, 1-2%? If anything, the end of the year dividend document seems somewhat disappointing.
(Though I’ve got a lot in accumulating ETFs too so maybe that’s why. )
I read this really great book about investing psychology a couple of years ago, it was a free pdf, pretty substantial and on point, not very long maybe 100 pages or so, but I can’t seem to find it again … Anyone?
Yes, I want to learn that. Probably Puts cost a lot when there is so much volatility. Heading up to April 2, I wouldn’t have minded to invest 0.1% of my capital to protect from any downside. But alas, I don’t have the knowledge how to do that. I don’t even know which product to buy and where to look for it. And would 0.1% amount to any protection at all?
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
)
