People are Wrong about Dividend Stocks. Here’s why

A note: the dividend stock price drop after the dividend is not an effect of the marker but of the broker. Its the broker who adjusts the price down by that same amount, but of course that price is meaningless, since once orders are put in again, the price of the stock then get adjusted back to those orders. The market does not perfectly reflect the dividend drop.

Plus dividend is taxed as income so anyone saying it's free is lying and the massive amount of stock you need alway buy gold with dividend nothing else fyi .

I trade dividend stocks not for the dividend, but because they know how to turn a profit.

Exactly the kind of investing video beginners need. Clear breakdowns, practical tips, and guidance that make getting started feel less overwhelming. More content like this is definitely needed on YouTube.

Ine of the major differences, especially between the different generations of investors is that older generations and more wealthy investors didnt need to invest and didnt need the extra money. Younger and less well off investors like me are in a position where we need money and we need it now cuz we are often in positions where one source of income isnt enough. We invest in dividends because we need it to pay our bills now

Investing is math. If you let anything else influenced your decision then that's when you get into trouble.

Reply is simple, any company conduct share buybacks (including most growth stocks) are doing precisely the same thing, using free cash flow to reward investors...

In my opinion dividends are like chocolate for kids. Its a small motivation every month.

Taxes eat you up😮

Sell covered calls for income not shares should of used better comparison

These are bad arguments

I really like this! I don't need record breaking percentange, i want predictable revenue!

Buy and Hold
Get Cash and Appreciation still happens.

Why sell stocks whe n you need to time the market.

yeah seeing how the $100 stock drops after that $4 dividend payout makes total sense now. been using era wallet for the crypto portion of my portfolio

So wrong.... Point 1.... You frames it as dividends give you choice control, but in reality they give you less choice control. I can't choose to not take the dividend now (and avoid paying the tax now), but I can choose to sell stock anytime I want.

Not sure how I stumbled here 2 yrs later, but good food for thought. Maybe I'm just not that smart, but this is why I'm happy with VTSAX Vanguard Total Stock Market Index as its the best of both worlds, growth and dividends. If the market is up, I see growth. If the market is down, it means quarterly dividends are automatically reinvested at a better price.

I'm 35, just starting doing dividend investing. I wish i knew this in my 20s.

Dividends are to stocks what yields are to bonds. Most people who trade bonds aren't looking to hold for 30 years but it tethers the bond to reality otherwise what information are you using? If you buy and sell Amazon what metric are you using? "The company did well". SO WHAT? You could own 10% of Amazon with a multi-billion $ quarter and you wouldn't see 1 penny of those profits. You have to go the the opium drug den of the secondary market and hope they inflate the price because they're too stupid to realize it's a worthless piece of paper.

If the business doesn't need to reinvest and can still grow using the current assets plus the reserves are beefy enough, then not paying dividends is a crime. However the revenues have to be cash.

You can also use a DRIP to reinvest your dividends automatically so you don't even think about it

So from everything you said it seems that there is one real objective benefit - investor behavior. You feel better, you invest more consistently. But all of your actual "hard number" examples were just anecdotal/biased picks. More than that, you literally showed in the video that the total return of dividend stocks was lower than the total market over a long period.

I totally agree with the behavioral part, but as you can see, even your video proves that mathematically dividend investing is not an optimal strategy. But again, mathematically, we are all people and if some composition of numbers gives someone more comfort than other composition - sure, go for it.

Also "growth should by design outperform value over time" - what? That was never the design, these are just different ways to group stocks, they say nothing about future returns, value stocks can easily outperform growth stocks over decades. Otherwise, why would anyone pick anything other than growth?

A bank CD pays you moe

Owning any company which dosn't pay dividends is gambling on a greater fool buying it from you at a later date.

If I don't need the cash flow right now, why should I pay taxes on dividends before reinvesting them anyways? Delay the taxable event to when you are actually selling and you will pay less.

My dividend stocks have given me cash when other stocks were floundering

Diversification is good

Selling assets for cash is for suckers. Hold your assets and get cash flow from dividends in a Roth IRA tax shield. And do both growth and cash flow strategies. You have a luxury retirement for a couple decades. Then pass your assets to heirs upon death, and THEY will have a luxury lifestyle. And on and on it goes. Very simple actually.

hey you forgot to mention beta. dividend stocks are way less volatile and when price drops, since you will still get a dividend, it makes more sense to buy more rather than if there was no dividend & u have to worry about buying something that's worthless & averaging to zero.

Value stocks will outperform growth stocks

Warren buffet entered the chat.

Yeah dividends are gimmicks sorry you haven't convinced me.

The thing that I hate about some dividend lovers is that they think you can have your cake and eat it.

Sometimes a company that is doing poorly will give a huge dividend to keep shareholders from leaving.

Thanks for the information, these last days i was so nervous think about the inflation and crisis, im so glad i managed to find a way to make some profit out of this whole situation, for public utility, the video that teached me is public and is named “How to Profit in the Financial Crisis by Michael Thompson” 🚀

I detest the idea of a company that does not - and does not plan on ever - paying dividends. Dividend tax is just another way for politicians to help their powerful friends by giving corporate executives an excuse not to distribute.
I mean, what the fuck is a stock even worth for you? It's worth the NPV of all its future dividends. If future dividends are all 0, NPV is 0. People are buying something purely on the hope they will be able to sell it for more later. Even if that hope is backed by a reasonable belief that the company will grow... so what if it grows? You won't get anything out of it. Only the CEO and other high administrative staff will. They will be giving themselves large amounts of money both explicitly and as benefits - company car, company jet, company everything. Your only hope is another sucker will buy it off of you.

Check Ben Felix. What he is saying is yes dividend stocks do outperform the broader market, but this is all acounted from the risk factors like small cap, value, profitability, investment etc
So if you invest in funds from dimentional and avantis for example you will get exposure to those factors without sucrefising diversification. What if a value company does a buyback or repays debt, why not include that in your portfolio for diversification?

Also since dividend stocks are mostly value stocks, you should expect them in general to dip more in labor crisis like 2008 than the general market, examined from the total returns point of view where dividends are reinvested. (that is the risk part of the risk factor of value stocks, higher returns but the biggest dip when you lose your job). So in crisis if companies do not cut dividents you using all the dividents like they are your cashflow, is like a normal investor selling a biger part of there portfolio. If in a crisis companies in distress still pay dividends you should reinvest part of it or you risk portfolio catastrophy.

Also value outperforms growth long term, not what you said. It's just the last decades that this temporarily reversed. Just cuz growth companies are better companies, does not mean they are better Investments as they have higher prices compared to profits and are less risky in agrigate in crisis where peaple lose there jobs due to not relying in immediate income streams that get cut off on crisis.

My main rule for dividend investing is to not care how much i put into it

My case is im in indonesia and i invest in government backed bank because they give dividend because they need money, and the crazy thing is when rhe bank is healthy it give out dividend but when its not healthy the government will support it since they cant afford to lose trust and their income

Finance is really easy to understand.
People are not.

For me, dividends are just like tax free. I dont pay any tax on qualified dividends because I don't make enough, plus I get some exposure to equity growth, deferred until I sell, and that will be capital gains, so maybe it's also tax free!

META is 635, those 300 dollar shares were a bargain.

This video is fckin dumb iykyk