I love dividend stocks.

Quote: Archvaldor1

Quote: billryan

An investor who needs income should pay no attention to the dividend a stock pays. Are you kidding?

When the company pays you a dividend the value of your stock becomes less by the same amount. It is mathematically equivalent to withdrawing the equivalent amount in shares.

If you don't have confidence that the company can do better with the money you've given it than you can do yourself, don't give it to them. You should not be seeking dividends for that reason.
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What part of seeking dividends for income are we not understanding? I'm not looking for value, or growth, just income.
My portfolio is quite diverse, and I am very happy to dedicate a portion of it to income-producing stocks. If you can show me how to get a 20% or more return, deposited into my account each month, I'm happy to learn.

If I were reinvesting my dividends, I'd be way ahead of the market this year. If I were selling falling stocks every month to generate needed income, I'd be in deep trouble. Today, I'd have many fewer shares, and each share would be worth less. Instead, I still have all my shares and the cash I needed, as well .
AIPI is down 10% from its peak, but paid out almost double that amount.

Quote: lilredrooster

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Quote: billryan

If my portfolio never appreciates a dime, it will produce the income I need.
it would be helpful if you proposed alternative income devices

most dividend stocks yield between 1 and 4% - there are a few that yield slightly more
"

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Offhand AIPI is paying over 30%,FEPI is paying around 23%, QYLD is in the midteens, as are dozens of other ETF.
A few years ago, JP Morgan figured out how to jumpstart their numbers with covered calls and others have adopted that stratregy on steroids There are entire classes of ETFs paying out over 10% annual returns

A man jumped off the Empire State Building
As he passed the 80th floor, his cellphone rang
He answered it as he passed the 60th floor
Hello, he sez as he passes the 50th floor.
"How is it going?", goes the voice on the phone as they pass the fortieth floor
As the man passes the twentieth floor, he responds
So far, So good.

Quote: billryan

Offhand AIPI is paying over 30%,FEPI is paying around 23%, QYLD is in the midteens, as are dozens of other ETF.
A few years ago, JP Morgan figured out how to jumpstart their numbers with covered calls and others have adopted that stratregy on steroids There are entire classes of ETFs paying out over 10% annual returns

okay -

you learned me something there
I didn't know that

my strategy which is carved in stone won't change because of it -

but it's always interesting to learn something that you didn't know about in a subject you're interested in

.

Quote: billryan

What part of seeking dividends for income are we not understanding? I'm not looking for value, or growth, just income.
My portfolio is quite diverse, and I am very happy to dedicate a portion of it to income-producing stocks. If you can show me how to get a 20% or more return, deposited into my account each month, I'm happy to learn.

If a company pays me 4% of the net worth of my stocks it is the same as if I sell 4% of my stock.

You seem to think there is a fundamental difference. There isn't for most practical purposes. Your "income-producing" concept is purely psychological.

I am not sure where you are getting the 20% number from. A 240% return per year would be tough to produce. I don't think many people get that from stock, dividends or not.

Quote: Archvaldor1

Quote: billryan

What part of seeking dividends for income are we not understanding? I'm not looking for value, or growth, just income.
My portfolio is quite diverse, and I am very happy to dedicate a portion of it to income-producing stocks. If you can show me how to get a 20% or more return, deposited into my account each month, I'm happy to learn.

If a company pays me 4% of the net worth of my stocks it is the same as if I sell 4% of my stock.

You seem to think there is a fundamental difference. There isn't for most practical purposes.

I am not sure where you are getting the 20% number from. A 240% return per year would be tough to produce. I don't think many people get that from stocks.
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If you're thinking of it just in terms of common stocks as the basis, that is generally so. However there are many ETFs out there that are doing something other than common stocks, and because they are ETFs we call what they pay "dividends" even though what they are actually generating is often something else. They're involved with derivatives, buywrite funds are very popular. Then there are bond funds, preferred stock funds, short funds, commodities, cryptocurrency etc. and they don't really have anything to sell, they're just generating cash with whatever they have and they transfer the cash alone to the shareholders.

Being they are dealing with things that have expiration dates and call dates simply buying more to increase the value of their shares becomes impractical and can lead to deceptive accounting so they are better off just sticking to their investment plan and handing over the proceeds.

Quote: Archvaldor1

Quote: billryan

What part of seeking dividends for income are we not understanding? I'm not looking for value or growth, just income.
My portfolio is quite diverse, and I am very happy to dedicate a portion of it to income-producing stocks. If you can show me how to get a 20% or more return, deposited into my account each month, I'm happy to learn.

If a company pays me 4% of its net worth it is the same as if I sell 4% of my stock.

You seem to think there is a fundamental difference. There isn't for most practical purposes.

I am not sure where you are getting the 20% number from. A 240% return per year would be tough to produce. I don't think many people get that from stocks.
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" For most practical purposes"

Selling a portion of your portfolio each month means your holdings go down If you own 100 shares and sell one share a month, eventually you will have no shares, so any growth is irrelevant. Over time, you'll run out of stock to sell
If you own 100 shares and cash the dividends each month, you'll always have 100 shares and potentially enjoy growth.
One method means tapping your equity, the other doesn't. If you are taking out more than you earn, eventually you'll go broke, but long before that, your revenue will dwindle to the point of no longer being a significant source of income. When your stocks are rising, your method works great. Not so much when the stock is flat or declining.

Quote: AutomaticMonkey

Quote: Archvaldor1

Quote: billryan

What part of seeking dividends for income are we not understanding? I'm not looking for value, or growth, just income.
My portfolio is quite diverse, and I am very happy to dedicate a portion of it to income-producing stocks. If you can show me how to get a 20% or more return, deposited into my account each month, I'm happy to learn.

If a company pays me 4% of the net worth of my stocks it is the same as if I sell 4% of my stock.

You seem to think there is a fundamental difference. There isn't for most practical purposes.

I am not sure where you are getting the 20% number from. A 240% return per year would be tough to produce. I don't think many people get that from stocks.
link to original post

If you're thinking of it just in terms of common stocks as the basis, that is generally so. However there are many ETFs out there that are doing something other than common stocks, and because they are ETFs we call what they pay "dividends" even though what they are actually generating is often something else. They're involved with derivatives, buywrite funds are very popular. Then there are bond funds, preferred stock funds, short funds, commodities, cryptocurrency etc. and they don't really have anything to sell, they're just generating cash with whatever they have and they transfer the cash alone to the shareholders.

Being they are dealing with things that have expiration dates and call dates simply buying more to increase the value of their shares becomes impractical and can lead to deceptive accounting so they are better off just sticking to their investment plan and handing over the proceeds.
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Some of these funds hold prominent positions in a dozen or so of the leading tech companies so the last few years were magical. This year exposed a lot of warts , and I'm sure a lot of investors bailed when the stocks were down 30% and cutting dividends. No different than the people who buy into the newest bitcoin rush and sell when it drops 15%.

I'm not greedy. A 20% annual return is good enough for me, especially if it is paid out monthly.