Dividend Growth Investing

Discussion of the Stock portion of the Permanent Portfolio

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Kbg
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Re: Dividend Growth Investing

Post by Kbg » Sat Jun 29, 2019 9:58 pm

There is some new AQR research on this very topic. It turns out dividends aren’t so bad after all when looking at various investing strategies.
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dualstow
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Re: Dividend Growth Investing

Post by dualstow » Sat Jun 29, 2019 10:09 pm

What’s AQR - my gaelic is rusty.
Something Quantitative something?
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Smith1776
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Re: Dividend Growth Investing

Post by Smith1776 » Sat Jun 29, 2019 10:10 pm

Found it.

From the conclusion: "As a result, dividend avoidance results in reduction in expected after-tax returns."

https://poseidon01.ssrn.com/delivery.ph ... 28&EXT=pdf

Huh. Well that's verrrrrry intriguing.

...

Take that, Larry. Ha! ;)
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sophie
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Re: Dividend Growth Investing

Post by sophie » Sun Jun 30, 2019 8:58 am

Ironically, the experience of holding physical gold in my hand is what got me interested in buying individual stocks. There's nothing like direct ownership.

Yes it may not be optimal to be paying taxes as you go on dividends, but the tax rates are certainly better than ordinary income and you probably will end up paying it eventually anyway. Or more, if the cap gains tax rate increases. Plus, if you own individual stocks you can play the tax loss harvest game, and 100% of your earnings are qualified dividends. WIth funds, some of the payouts are ordinary dividends so you get stuck paying correspondingly higher taxes on them, and you can only tax loss harvest after large overall market swings.
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dualstow
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Re: Dividend Growth Investing

Post by dualstow » Sun Jun 30, 2019 2:08 pm

You can add VCIT or another bond fund and roll your own Wellesley.
(or buy Wellesley. They do it better),
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Ad Orientem
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Re: Dividend Growth Investing

Post by Ad Orientem » Mon Aug 19, 2019 2:52 pm

I have a smallish position in VIG. I like it. The dividend is not especially impressive but it's probably pretty safe given the way that particular ETF is structured. Most of my stock investments are obviously in standard index funds. But I have to admit, I've never seen the point of owning a company, no matter how profitable, that doesn't share any of its profits with the owners.
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Re: Dividend Growth Investing

Post by mathjak107 » Thu Sep 05, 2019 9:05 am

sophie wrote:
Sun Jun 30, 2019 8:58 am
Ironically, the experience of holding physical gold in my hand is what got me interested in buying individual stocks. There's nothing like direct ownership.

Yes it may not be optimal to be paying taxes as you go on dividends, but the tax rates are certainly better than ordinary income and you probably will end up paying it eventually anyway. Or more, if the cap gains tax rate increases. Plus, if you own individual stocks you can play the tax loss harvest game, and 100% of your earnings are qualified dividends. WIth funds, some of the payouts are ordinary dividends so you get stuck paying correspondingly higher taxes on them, and you can only tax loss harvest after large overall market swings.
as little as a 2% dividend in a taxable account can wipe out any lower tax advantage over the long term ... fund turnover adds to that problem .
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