John Bogle on Dividends
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John Bogle on Dividends
Just to add to the dividend debate on here, I thought this article was revealing. John Bogle believed in dividend investing for retirees:
https://www.etf.com/publications/journa ... nopaging=1
Some quotes:
"Oversimplifying, what you want to do when you retire is walk out to the mailbox on Social Security day and on dividend payment day for the funds—assuming they’re the same day—and make sure you have two envelopes out there. One is your fund dividend and the other is your Social Security check."
and
"Bet on the dividends, and not on the market price. You’ve got those two envelopes and that’s your retirement. If you have a pension plan (one that is not likely to go bankrupt—and a lot of them are likely to) that is a third envelope. You want to be concerned about whether you have enough income to pay utility bills, pay for your food, pay your rent or your mortgage, whatever it might be, every month. You want income to help you pay those bills. And in the retirement stage, that’s what investing should be about—regular checks from dividends and/or from Social Security and/or from a pension account."
He does warn about straying too far from the market index, which adds risk.
With this kind of sound reasoning, I wonder why there is so much opposition to dividend investing on this forum?
https://www.etf.com/publications/journa ... nopaging=1
Some quotes:
"Oversimplifying, what you want to do when you retire is walk out to the mailbox on Social Security day and on dividend payment day for the funds—assuming they’re the same day—and make sure you have two envelopes out there. One is your fund dividend and the other is your Social Security check."
and
"Bet on the dividends, and not on the market price. You’ve got those two envelopes and that’s your retirement. If you have a pension plan (one that is not likely to go bankrupt—and a lot of them are likely to) that is a third envelope. You want to be concerned about whether you have enough income to pay utility bills, pay for your food, pay your rent or your mortgage, whatever it might be, every month. You want income to help you pay those bills. And in the retirement stage, that’s what investing should be about—regular checks from dividends and/or from Social Security and/or from a pension account."
He does warn about straying too far from the market index, which adds risk.
With this kind of sound reasoning, I wonder why there is so much opposition to dividend investing on this forum?
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Re: John Bogle on Dividends
I'm not opposed to it. I just think it's not compelling to sacrifice returns and diversification for the sake of getting a check in the form of dividends when it's extremely simple to just click sell and give yourself a check once a year from your total-market fund.GoneOnTilt wrote: ↑Wed Oct 13, 2021 10:44 am Just to add to the dividend debate on here, I thought this article was revealing. John Bogle believed in dividend investing for retirees:
https://www.etf.com/publications/journa ... nopaging=1
Some quotes:
"Oversimplifying, what you want to do when you retire is walk out to the mailbox on Social Security day and on dividend payment day for the funds—assuming they’re the same day—and make sure you have two envelopes out there. One is your fund dividend and the other is your Social Security check."
and
"Bet on the dividends, and not on the market price. You’ve got those two envelopes and that’s your retirement. If you have a pension plan (one that is not likely to go bankrupt—and a lot of them are likely to) that is a third envelope. You want to be concerned about whether you have enough income to pay utility bills, pay for your food, pay your rent or your mortgage, whatever it might be, every month. You want income to help you pay those bills. And in the retirement stage, that’s what investing should be about—regular checks from dividends and/or from Social Security and/or from a pension account."
He does warn about straying too far from the market index, which adds risk.
With this kind of sound reasoning, I wonder why there is so much opposition to dividend investing on this forum?
https://www.portfoliovisualizer.com/bac ... ion2_2=100
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Re: John Bogle on Dividends
I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
If you want a bit more money, sell shares. Alternatively, reinvest dividends and take whatever you’ve set your withdrawal rate at.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
If you want a bit more money, sell shares. Alternatively, reinvest dividends and take whatever you’ve set your withdrawal rate at.
Last edited by Orangutan on Wed Oct 13, 2021 11:00 am, edited 1 time in total.
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Re: John Bogle on Dividends
I mean what is the context of these quotes? They sound pretty dumbed down and designed for an investor not capable of managing SWR or VPW. It sounds more like he's saying this is a convenent way to manage your withdrawals - just let CEOs do it for you. He also said it before the dividend rate on the S&P500 fell to 1.3%. Collecting dividends at a 2.5% rate historically was a pretty decent, somewhat conservative, way to approximate a SWR. Now you'd either need to sell shares, or seriously deviate from a market index, in order to get more than the 1.3% the S&P500 currently offers. I'm quite certain Bogle would have chosen the former over the latter.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
Re: John Bogle on Dividends
The problem with dividends, to quote Mr. Bogle, is "Oversimplifying".
It is much like the Aristotelian Physics rule that heavy objects fall faster than lighter objects. It is simple. It is intuitive. It solves many common problems.
The problem is that if you try to solve any serious problem with vigor it falls apart. It fails as a foundational concept. You can't ad hoc you way out of the hole that you dug with this bad concept. You have to chuck the whole theory and start over again.
Back to dividends. The Dividend Discount Model (DDM) is often used in intro to finance classes. It is a very simple illustration of how Free Cash Flow to Equity (FCFE) works. However the number of strict assumptions around the model make it useless in real life. But yo have to learn how to crawl before you walk. Or at least that is true for most babies. Some just skip to walking.
It is much like the Aristotelian Physics rule that heavy objects fall faster than lighter objects. It is simple. It is intuitive. It solves many common problems.
The problem is that if you try to solve any serious problem with vigor it falls apart. It fails as a foundational concept. You can't ad hoc you way out of the hole that you dug with this bad concept. You have to chuck the whole theory and start over again.
Back to dividends. The Dividend Discount Model (DDM) is often used in intro to finance classes. It is a very simple illustration of how Free Cash Flow to Equity (FCFE) works. However the number of strict assumptions around the model make it useless in real life. But yo have to learn how to crawl before you walk. Or at least that is true for most babies. Some just skip to walking.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: John Bogle on Dividends
Orangutan wrote: ↑Wed Oct 13, 2021 10:57 am I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
If you want a bit more money, sell shares. Alternatively, reinvest dividends and take whatever you’ve set your withdrawal rate at.
Contradictory. By focusing on the dividend.... that is....by definition, arguing for dividend investing. Likely not arguing for 100% dividend investing, but the words quoted in the OP are arguing for dividends.I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
That is the point. Agreed. This as part of a portfolio is not heresy. It is an investment tool.I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
Re: John Bogle on Dividends
I fail to see where he advocated for "dividend chasing". But, you read what you want to hear. That is fine.skierincolorado wrote: ↑Wed Oct 13, 2021 10:58 am I mean what is the context of these quotes? They sound pretty dumbed down and designed for an investor not capable of managing SWR or VPW. It sounds more like he's saying this is a convenent way to manage your withdrawals - just let CEOs do it for you. He also said it before the dividend rate on the S&P500 fell to 1.3%. Collecting dividends at a 2.5% rate historically was a pretty decent, somewhat conservative, way to approximate a SWR. Now you'd either need to sell shares, or seriously deviate from a market index, in order to get more than the 1.3% the S&P500 currently offers. I'm quite certain Bogle would have chosen the former over the latter.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
Me? I will build some dividend payers 6 years prior to retirement and gladly take those "risky--bad" dividends during retirement.
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Re: John Bogle on Dividends
If your money grows in perpetuity by just spending the dividend, then selling the same percentage of non-dividend paying stocks would also grow in perpetuity, all else equal.Orangutan wrote: ↑Wed Oct 13, 2021 10:57 am I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
Re: John Bogle on Dividends
+100GoneOnTilt wrote: ↑Wed Oct 13, 2021 10:44 am Just to add to the dividend debate on here, I thought this article was revealing. John Bogle believed in dividend investing for retirees:
https://www.etf.com/publications/journa ... nopaging=1
Some quotes:
"Oversimplifying, what you want to do when you retire is walk out to the mailbox on Social Security day and on dividend payment day for the funds—assuming they’re the same day—and make sure you have two envelopes out there. One is your fund dividend and the other is your Social Security check."
and
"Bet on the dividends, and not on the market price. You’ve got those two envelopes and that’s your retirement. If you have a pension plan (one that is not likely to go bankrupt—and a lot of them are likely to) that is a third envelope. You want to be concerned about whether you have enough income to pay utility bills, pay for your food, pay your rent or your mortgage, whatever it might be, every month. You want income to help you pay those bills. And in the retirement stage, that’s what investing should be about—regular checks from dividends and/or from Social Security and/or from a pension account."
He does warn about straying too far from the market index, which adds risk.
With this kind of sound reasoning, I wonder why there is so much opposition to dividend investing on this forum?
I am in complete agreement with Jack on this.
Re: John Bogle on Dividends
I agree and didn’t suggest otherwise.burritoLover wrote: ↑Wed Oct 13, 2021 11:12 amIf your money grows in perpetuity by just spending the dividend, then selling the same percentage of non-dividend paying stocks would also grow in perpetuity, all else equal.Orangutan wrote: ↑Wed Oct 13, 2021 10:57 am I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
Re: John Bogle on Dividends
I think you have hit the nail perfectly on the head - on how dividends lead people astray.
Lots of people believe what you just wrote. It is intuitive. But is it correct?
There are lots of investments that pay dividends that don't grow in perpetuity. Some will go bankrupt. Others are designed to expire.
From a Total Returns perspective does it make any difference if I take the dividends from a dividend paying stock verse selling a of a non-dividend paying stock? From a accounting, theoretical, or historical perspective the answer is no.
It does make sense from a psychological perspective as a method to limit spending. But you have to admit there is a very tenuous link between what a CFO thinks a company should pay in dividends this quarter and what you should be spending.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: John Bogle on Dividends
Most people here do not agree that investing in retirement is about going out to your mailbox and [figuratively] picking up a SS check, a pension check, and a dividend check. Most people here would agree that retirement is about [again figuratively] going out to your mailbox and picking up a SS check, possibly picking up a pension or fixed annuity check, and picking up a check from your broker for a withdrawal of some amount from your portfolio. What the amount is that should be withdrawn from your portfolio takes more thought and understanding of investments than that it just be some random dividend check paid by some stock. Frankly it is inexplicable why that particular narrative would be offered. But Mr. Bogle has said a lot of things that one finds gobsmacking. Aside from all of that retirees with taxable accounts very often do in fact go to their mailbox and pick up a dividend check, but that is hardly the end of it. Considering that a large fraction of retirement investments are held in tax preferred plans that don't issue dividend checks and often don't even issue dividends, that Bogle narrative does not even make sense. It is beyond me what he intended to convey by it. The argument that one should set spending at whatever dividends you can arrange is clearly faulty. In any case the 2% dividend you can get from the total market today is far less than you can perfectly reasonably withdraw and it would be silly to only spend that amount for the reason that this is what comes in the dividend check. It would be a mistake to spend too much just because you can find a large dividend somewhere, and it would be a mistake to distort the asset allocation by concentrating in too narrow a selection of assets.
Also, this forum is not opposed to "dividend investing." The forum is opposed to the idea that dividend investing involves a special sauce that evades the principles of investing. The most extreme form of that is the illusion that dividends are free money but there are plenty of other illusions. None of this is opposed to someone who knows what they are doing selecting stocks by dividend or setting spending equal to dividends if they want to.
Also, this forum is not opposed to "dividend investing." The forum is opposed to the idea that dividend investing involves a special sauce that evades the principles of investing. The most extreme form of that is the illusion that dividends are free money but there are plenty of other illusions. None of this is opposed to someone who knows what they are doing selecting stocks by dividend or setting spending equal to dividends if they want to.
Re: John Bogle on Dividends
I’m viewing it narrowly through a total market/VTSAX lense, so yes it applies there. But agreed, it would help for people to understand the mechanics behind their dividend and total return.alex_686 wrote: ↑Wed Oct 13, 2021 11:22 amI think you have hit the nail perfectly on the head - on how dividends lead people astray.
Lots of people believe what you just wrote. It is intuitive. But is it correct?
There are lots of investments that pay dividends that don't grow in perpetuity. Some will go bankrupt. Others are designed to expire.
From a Total Returns perspective does it make any difference if I take the dividends from a dividend paying stock verse selling a of a non-dividend paying stock? From a accounting, theoretical, or historical perspective the answer is no.
It does make sense from a psychological perspective as a method to limit spending. But you have to admit there is a very tenuous link between what a CFO thinks a company should pay in dividends this quarter and what you should be spending.
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Re: John Bogle on Dividends
Well, you stated it as if it was a guarantee. You could invest in a risky dividend fund with a very high yield - spend only the dividend and end up running out of money.Orangutan wrote: ↑Wed Oct 13, 2021 11:19 amI agree and didn’t suggest otherwise.burritoLover wrote: ↑Wed Oct 13, 2021 11:12 amIf your money grows in perpetuity by just spending the dividend, then selling the same percentage of non-dividend paying stocks would also grow in perpetuity, all else equal.Orangutan wrote: ↑Wed Oct 13, 2021 10:57 am I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
Re: John Bogle on Dividends
I should have clarified. I now just assume everyone else is investing in total marketburritoLover wrote: ↑Wed Oct 13, 2021 11:30 amWell, you stated it as if it was a guarantee. You could invest in a risky dividend fund with a very high yield - spend only the dividend and end up running out of money.Orangutan wrote: ↑Wed Oct 13, 2021 11:19 amI agree and didn’t suggest otherwise.burritoLover wrote: ↑Wed Oct 13, 2021 11:12 amIf your money grows in perpetuity by just spending the dividend, then selling the same percentage of non-dividend paying stocks would also grow in perpetuity, all else equal.Orangutan wrote: ↑Wed Oct 13, 2021 10:57 am I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
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Re: John Bogle on Dividends
Fair enough - but you do see some pursuing that strategy with a collection of high yield stocks (like 6,8,10% yields) and they believe that they aren't "spending down the principal" so it will last forever.Orangutan wrote: ↑Wed Oct 13, 2021 11:32 amI should have clarified. I now just assume everyone else is investing in total marketburritoLover wrote: ↑Wed Oct 13, 2021 11:30 amWell, you stated it as if it was a guarantee. You could invest in a risky dividend fund with a very high yield - spend only the dividend and end up running out of money.Orangutan wrote: ↑Wed Oct 13, 2021 11:19 amI agree and didn’t suggest otherwise.burritoLover wrote: ↑Wed Oct 13, 2021 11:12 amIf your money grows in perpetuity by just spending the dividend, then selling the same percentage of non-dividend paying stocks would also grow in perpetuity, all else equal.Orangutan wrote: ↑Wed Oct 13, 2021 10:57 am I don’t think he was arguing for dividend investing. But it does make a lot of sense to ignore the market price and focus on the underlying dividend.
I do think it’s a nice method to get part of your total return. Just click dividend reinvestment off and take your money. If that’s all you take, your shares will remain and your money will grow in perpetuity.
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Re: John Bogle on Dividends
To a large degree, the argument about dividends is moot from a boglehead investor's point of view. The S&P500 has about 70 some stocks that don't pay dividends, largely comprising companies in higher growth industries, but also including some companies that have suspended their dividend and not reinstated yet, and an outlier or two like Berkshire Hathaway.
Of the top 50 companies by market cap, only about 10 don't pay some kind of dividend (although more than a few don't really payout very much. Of the companies in the top 10 by value, five pay no dividend and the others pay generally less than 20% of their earnings.
If you want to make your own index of companies that don't pay dividends, you'll find yourself concentrated in "growth" stocks, which have a rather different risk profile than the broader market. If you want to focus only on dividend providers, you'll lose a lot of the highest growers.
The idea of having the company do the reinvesting is more tax efficient, but to enjoy that situation you have to drastically restrict your selections.
Of the top 50 companies by market cap, only about 10 don't pay some kind of dividend (although more than a few don't really payout very much. Of the companies in the top 10 by value, five pay no dividend and the others pay generally less than 20% of their earnings.
If you want to make your own index of companies that don't pay dividends, you'll find yourself concentrated in "growth" stocks, which have a rather different risk profile than the broader market. If you want to focus only on dividend providers, you'll lose a lot of the highest growers.
The idea of having the company do the reinvesting is more tax efficient, but to enjoy that situation you have to drastically restrict your selections.
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Re: John Bogle on Dividends
So you'll do exactly what Bogle advised not to do - deviate from the market.olyveoil wrote: ↑Wed Oct 13, 2021 11:11 amI fail to see where he advocated for "dividend chasing". But, you read what you want to hear. That is fine.skierincolorado wrote: ↑Wed Oct 13, 2021 10:58 am I mean what is the context of these quotes? They sound pretty dumbed down and designed for an investor not capable of managing SWR or VPW. It sounds more like he's saying this is a convenent way to manage your withdrawals - just let CEOs do it for you. He also said it before the dividend rate on the S&P500 fell to 1.3%. Collecting dividends at a 2.5% rate historically was a pretty decent, somewhat conservative, way to approximate a SWR. Now you'd either need to sell shares, or seriously deviate from a market index, in order to get more than the 1.3% the S&P500 currently offers. I'm quite certain Bogle would have chosen the former over the latter.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
Me? I will build some dividend payers 6 years prior to retirement and gladly take those "risky--bad" dividends during retirement.
If you want a CEO to return your principal to you on her schedule, rather than returning principal to yourself on your schedule, that's your call.
Re: John Bogle on Dividends
I think sometimes dividend investing could cause you to be taxed moreGoneOnTilt wrote: ↑Wed Oct 13, 2021 10:44 am I wonder why there is so much opposition to dividend investing on this forum?
Scenario: Both investors A and B are retired and their funds are in a taxable account. Investor A is living off individual stock dividends and Investor B is living off a total market fund (assume no dividends for simplicity). They both sell shares to pay for an upcoming expense
Result: Investor A is taxed on the full amount of his dividend income. Investor B is taxed only on the gains. Investor B comes out ahead
Obviously in a tax deferred account it doesn't matter
Last edited by Ramjet on Wed Oct 13, 2021 11:38 am, edited 1 time in total.
Re: John Bogle on Dividends
Because today we can sell fractional shares at zero commission cost. As such, instead of relying on a board to decide how much dividends we can spend and when it is paid to us (the board members have no idea of our needs !!), we can simply sell shares manufacturing our own dividend, when we need it, how much we need it, and paying less taxes in the process.GoneOnTilt wrote: ↑Wed Oct 13, 2021 10:44 am With this kind of sound reasoning, I wonder why there is so much opposition to dividend investing on this forum?
It is as simple as that !
Last edited by Thesaints on Wed Oct 13, 2021 11:46 am, edited 1 time in total.
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Re: John Bogle on Dividends
The majority of the "opposition" is that dividend investing is often sold as a magic strategy compared to broad index investing and the dividend arguments often include some false assumptions about underlying risk etc. In a taxable account, dividend investing is not as tax efficient as broad indexing. The psychological benefit of getting a check in the mail (or direct deposit) is undeniable, but it comes with a cost just like paying a professional advisor does. If you are doing DIY investing for personal advantage, you might as well squeeze out as much efficiency as possible. Before index funds were so readily available, buying individual stocks that paid dividends was a popular way of turning stock holdings into income. You can still do that but there are more efficient ways now. If you still feel compelled to do dividend investing, do it in a tax advantaged account and understand that there is no dividend magic.
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Re: John Bogle on Dividends
There is a large and growing contingent online, and beggining to infiltrate this forum, that don't just take the dividends of the S&P500 - they seek ulta high dividend payers of 4%+. Companies that are just returning your principal to you.Boglegrappler wrote: ↑Wed Oct 13, 2021 11:36 am To a large degree, the argument about dividends is moot from a boglehead investor's point of view. The S&P500 has about 70 some stocks that don't pay dividends, largely comprising companies in higher growth industries, but also including some companies that have suspended their dividend and not reinstated yet, and an outlier or two like Berkshire Hathaway.
Of the top 50 companies by market cap, only about 10 don't pay some kind of dividend (although more than a few don't really payout very much. Of the companies in the top 10 by value, five pay no dividend and the others pay generally less than 20% of their earnings.
If you want to make your own index of companies that don't pay dividends, you'll find yourself concentrated in "growth" stocks, which have a rather different risk profile than the broader market. If you want to focus only on dividend providers, you'll lose a lot of the highest growers.
The idea of having the company do the reinvesting is more tax efficient, but to enjoy that situation you have to drastically restrict your selections.
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Re: John Bogle on Dividends
There is a large and growing contingent online, and beggining to infiltrate this forum, that don't just take the dividends of the S&P500 - they seek ultra high dividend payers of 4%+. Companies that are just returning your principal to you.Boglegrappler wrote: ↑Wed Oct 13, 2021 11:36 am To a large degree, the argument about dividends is moot from a boglehead investor's point of view. The S&P500 has about 70 some stocks that don't pay dividends, largely comprising companies in higher growth industries, but also including some companies that have suspended their dividend and not reinstated yet, and an outlier or two like Berkshire Hathaway.
Of the top 50 companies by market cap, only about 10 don't pay some kind of dividend (although more than a few don't really payout very much. Of the companies in the top 10 by value, five pay no dividend and the others pay generally less than 20% of their earnings.
If you want to make your own index of companies that don't pay dividends, you'll find yourself concentrated in "growth" stocks, which have a rather different risk profile than the broader market. If you want to focus only on dividend providers, you'll lose a lot of the highest growers.
The idea of having the company do the reinvesting is more tax efficient, but to enjoy that situation you have to drastically restrict your selections.
There's a subreddit for investors of QYLD who believe that the 10% dividend they receive does not jeopardize their principal in the long-run. I even ran into a person on the bogleheads subreddit who was recommending QYLD to other bogleheads.
Last edited by skierincolorado on Wed Oct 13, 2021 11:42 am, edited 2 times in total.
Re: John Bogle on Dividends
Yeah, it’s a problem. It doesn’t help that there’s a million different dividend funds marketed by the industry. How easy is it for your average person to understand the mechanics of total return - without really seeking it? I think this applies to professionals (doctors, etc) too, unfortunately.burritoLover wrote: ↑Wed Oct 13, 2021 11:34 amFair enough - but you do see some pursuing that strategy with a collection of high yield stocks (like 6,8,10% yields) and they believe that they aren't "spending down the principal" so it will last forever.Orangutan wrote: ↑Wed Oct 13, 2021 11:32 amI should have clarified. I now just assume everyone else is investing in total marketburritoLover wrote: ↑Wed Oct 13, 2021 11:30 amWell, you stated it as if it was a guarantee. You could invest in a risky dividend fund with a very high yield - spend only the dividend and end up running out of money.Orangutan wrote: ↑Wed Oct 13, 2021 11:19 amI agree and didn’t suggest otherwise.burritoLover wrote: ↑Wed Oct 13, 2021 11:12 am
If your money grows in perpetuity by just spending the dividend, then selling the same percentage of non-dividend paying stocks would also grow in perpetuity, all else equal.
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Re: John Bogle on Dividends
Yep and there was probably a benefit to tilting some to dividend paying stocks in retirement in Bogle's era due to high commission costs - I don't know if anyone's done a study on that, but would be interesting.Orangutan wrote: ↑Wed Oct 13, 2021 11:40 amYeah, it’s a problem. It doesn’t help that there’s a million different dividend funds marketed by the industry. How easy is it for your average person to understand the mechanics of total return - without really seeking it? I think this applies to professionals (doctors, etc) too, unfortunately.burritoLover wrote: ↑Wed Oct 13, 2021 11:34 amFair enough - but you do see some pursuing that strategy with a collection of high yield stocks (like 6,8,10% yields) and they believe that they aren't "spending down the principal" so it will last forever.Orangutan wrote: ↑Wed Oct 13, 2021 11:32 amI should have clarified. I now just assume everyone else is investing in total marketburritoLover wrote: ↑Wed Oct 13, 2021 11:30 amWell, you stated it as if it was a guarantee. You could invest in a risky dividend fund with a very high yield - spend only the dividend and end up running out of money.
Re: John Bogle on Dividends
One wonders if that Bogle quote had him in a thought process that might have applied a sixty or seventy or more years ago when selling stocks to withdraw monthly income was awkward and impractical while a dividend of 4% from a diversified holding was a reasonable expectation.
Also, no one seems to have commented that Mr. Bogle surely did not imagine that one does not also hold bonds. One does not depend only on the dividends from stocks for income. Bonds pay interest, but clipping bond coupons for income is also an artifact of another time.
Also, no one seems to have commented that Mr. Bogle surely did not imagine that one does not also hold bonds. One does not depend only on the dividends from stocks for income. Bonds pay interest, but clipping bond coupons for income is also an artifact of another time.
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Re: John Bogle on Dividends
As dividend payouts have dwindled, an individual would need to stray further from the market portfolio each year to maintain the same amount of dividend income.
Re: John Bogle on Dividends
There are multiple moving parts here. Laws have changed - see stock buy backs. Investor attitudes have shifted. Shifting to the Total Returns framework, becoming less risk adverse, etc.burritoLover wrote: ↑Wed Oct 13, 2021 11:44 am Yep and there was probably a benefit to tilting some to dividend paying stocks in retirement in Bogle's era due to high commission costs - I don't know if anyone's done a study on that, but would be interesting.
To your question, I think it is a valid point but I don't know of any studies. The problem is that the impact would be highly sensitive to the size of the portfolio, the required withdrawal rate, and starting point. i.e., lots of very specific details that don't generalize well. Besides, I have no idea how you could even figure out the commissions costs. Almost all of the brokers were commissioned and brokerage fees varied between firms and clients often negotiated their commissions.
As a side note, IIRC S&P index back then - I assume we are talking about the 80s - assumed that dividend were reinvested back into the index once a month. Or maybe weekly. Not the daily reinvestment they assume now.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: John Bogle on Dividends
He didn't say don't deviate from the market. He said don't stray too far. He thought it was okay for retirees to tilt toward Blue-Chip, higher-dividend paying stocks:skierincolorado wrote: ↑Wed Oct 13, 2021 11:36 am So you'll do exactly what Bogle advised not to do - deviate from the market.
"If you really need the dividend income, I see nothing wrong with overweighting high-dividend stocks, knowing you’re taking a small risk of falling significantly behind the total market. But you can own blue chip stocks, and you’re going to get a higher dividend, a situation I think would be attractive to an awful lot of investors. But once you depart from the market portfolio, you’re taking on extra risk."
Re: John Bogle on Dividends
I hold six percent of my portfolio in SCHD, a Schwab high dividend index fund, in a taxable account.
I use the dividends to help pay bills. It's not a tax drag if you need and use the income.
I see no reason for alarm. I think it's a reasonable approach.
I use the dividends to help pay bills. It's not a tax drag if you need and use the income.
I see no reason for alarm. I think it's a reasonable approach.
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Re: John Bogle on Dividends
Bogle was an old school investor in many respects. Sure he had some revolutionary ideas (like low-cost, broad-market, index mutual funds and a novel organizational structure for Vanguard). But apart from those, much of what he writes is old school (he likes several actively-managed funds, he likes dividends, he likes corporate bonds, and he dislikes international.)GoneOnTilt wrote: ↑Wed Oct 13, 2021 11:55 amHe didn't say don't deviate from the market. He said don't stray too far. He thought it was okay for retirees to tilt toward Blue-Chip, higher-dividend paying stocks:skierincolorado wrote: ↑Wed Oct 13, 2021 11:36 am So you'll do exactly what Bogle advised not to do - deviate from the market.
"If you really need the dividend income, I see nothing wrong with overweighting high-dividend stocks, knowing you’re taking a small risk of falling significantly behind the total market. But you can own blue chip stocks, and you’re going to get a higher dividend, a situation I think would be attractive to an awful lot of investors. But once you depart from the market portfolio, you’re taking on extra risk."
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Re: John Bogle on Dividends
Ah, great point - that is probably why there's no studies.alex_686 wrote: ↑Wed Oct 13, 2021 11:55 amTo your question, I think it is a valid point but I don't know of any studies. The problem is that the impact would be highly sensitive to the size of the portfolio, the required withdrawal rate, and starting point. i.e., lots of very specific details that don't generalize well. Besides, I have no idea how you could even figure out the commissions costs. Almost all of the brokers were commissioned and brokerage fees varied between firms and clients often negotiated their commissions.burritoLover wrote: ↑Wed Oct 13, 2021 11:44 am Yep and there was probably a benefit to tilting some to dividend paying stocks in retirement in Bogle's era due to high commission costs - I don't know if anyone's done a study on that, but would be interesting.
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Re: John Bogle on Dividends
full context, oh and this interview was from 2015 if that helps:
Bogle: Now, what makes life terribly difficult today is the staggering decline in interest rates. Around 1980, the interest rate on the intermediate-term Treasury got up to about 14.5 percent, while the dividend yield on stocks back then was probably 4 percent. That 14.5 percent is now 2.3 percent. The yield on stocks is now about 2 percent.
The problem the mutual fund industry faces is if you go into dividend-paying stocks at 3 percent—the yield for the total stock market is 2 percent, but dividend-paying stocks could produce 3 percent if you reach a little bit with good companies—on the typical fund, there’s an expense ratio of 1 percent, so it takes 33 percent of that dividend out of your pocket. The yield on a broad-market mutual fund is now 2 percent, so this marvelous industry is taking 50 percent of your dividend away from you.
Q: But what about a cap-weighted index fund that only invests in dividend-paying stocks? Would that be an improvement over the broad market?
Bogle: Well, it all depends. Sometimes yes, sometimes no. We go through long periods where value stocks, dividend stocks, or small-cap stocks do better than the total market, but within that, we know over the long term, going back to the 1920s, value stocks (including dividend-paying stocks) and small-cap stocks have provided higher returns than growth stocks and large-cap stocks. But there are periods that can be as long as 20 or 25 years when the opposite is true, so you just don’t know. Timing is everything, but I don’t like to rely on timing.
If you really need the dividend income, I see nothing wrong with overweighting high-dividend stocks, knowing you’re taking a small risk of falling significantly behind the total market. But you can own blue chip stocks, and you’re going to get a higher dividend, a situation I think would be attractive to an awful lot of investors. But once you depart from the market portfolio, you’re taking on extra risk. Any strategy may have done very well in the past, but in this business, the past is not prologue.
I happen to use Vanguard’s High Dividend Yield Index Fund in a small charitable foundation that I started. I love it because the foundation needs the income. There are good uses for it, but you could also make the same argument about using high dividends as using growth funds with low dividends, because there are periods in which they do much better. When you look at that crazy market we had up to 2000 before the crash, there the growth stocks did better than value stocks for about 10 years, and the large-cap stocks did much better than small cap for about for 15 years (in some earlier periods, those trends were even longer). Never let yourself be captive of recent trends in market sectors, would be my warning.
source: https://www.etf.com/publications/journa ... nopaging=1
Last edited by arcticpineapplecorp. on Wed Oct 13, 2021 1:35 pm, edited 1 time in total.
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Re: John Bogle on Dividends
Sure.. I wouldn't object if an investor wanted to overweight blue chips. 80% VTI + 20% SCHD for example. But there's no theoretical financial reason to, and Bogle doesn't provide one either. He just says he sees nothing wrong with it. I don't either. It's close enough. If it makes someone feel better (psychologically) to get their principal mailed to them rather than selling their principal themselves, sure whatever it doesn't matter. But going 50%+ SCHD would be a pretty significant deviation from the market and adds addtional unnecessary risk for no theoretical benefit (other than psychological benefit).GoneOnTilt wrote: ↑Wed Oct 13, 2021 11:55 amHe didn't say don't deviate from the market. He said don't stray too far. He thought it was okay for retirees to tilt toward Blue-Chip, higher-dividend paying stocks:skierincolorado wrote: ↑Wed Oct 13, 2021 11:36 am So you'll do exactly what Bogle advised not to do - deviate from the market.
"If you really need the dividend income, I see nothing wrong with overweighting high-dividend stocks, knowing you’re taking a small risk of falling significantly behind the total market. But you can own blue chip stocks, and you’re going to get a higher dividend, a situation I think would be attractive to an awful lot of investors. But once you depart from the market portfolio, you’re taking on extra risk."
The problem I see is I see almost nobody going 80% VTI + 20% SCHD (tilting). It's all or nothing. The people that buy SCHD (or even worse ultra high yield funds) tend to believe in dividend magic - that a CEO returning your principal to you on a schedule is somehow better than you selling your principal on your own schedule. And accordingly they tend to be dramatically overweight in these funds, often chasing higher and higher yields, into funds that have little market correlation at all and very large principal decay (such as QYLD).
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Re: John Bogle on Dividends
Yes.arcticpineapplecorp. wrote: ↑Wed Oct 13, 2021 12:06 pm full context, oh and this interview was from 2015 if that helps:
Correct.
Six years ago.
Or, 72 months, if you will.
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Re: John Bogle on Dividends
"To your question, I think it is a valid point but I don't know of any studies. The problem is that the impact would be highly sensitive to the size of the portfolio, the required withdrawal rate, and starting point. i.e., lots of very specific details that don't generalize well. Besides, I have no idea how you could even figure out the commissions costs. Almost all of the brokers were commissioned and brokerage fees varied between firms and clients often negotiated their commissions."
I have read a similar story line in several books about how so many things are different now than they used to be and there are now better ways to manage withdrawals plus all the new tax advantaged account types. I don't know the exact timeline but the fundamentals of investing using new types of accounts and different tax management seem to be a very different landscape compared to 30-40 years ago.
I have read a similar story line in several books about how so many things are different now than they used to be and there are now better ways to manage withdrawals plus all the new tax advantaged account types. I don't know the exact timeline but the fundamentals of investing using new types of accounts and different tax management seem to be a very different landscape compared to 30-40 years ago.
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Re: John Bogle on Dividends
Agreed. I like dividends. I don't overly reach for them. But I like them. I like when they hit my account. They're part of the total return. I like knowing they'll cover a good chunk of what I'll need when I retire in a few years.
The other reason I like them is that they're a bird in the hand, so to speak. I have no idea what the stock price will do tomorrow or the next day. At least I have the dividends in my account. I don't thin there's anything wrong with that thinking.
As you said, no reason for alarm. It's a reasonable approach.
Re: John Bogle on Dividends
On the retail side....Mike Scott wrote: ↑Wed Oct 13, 2021 12:27 pm I don't know the exact timeline but the fundamentals of investing using new types of accounts and different tax management seem to be a very different landscape compared to 30-40 years ago.
50 years ago there was a minimum brokerage commission that was quite high. You had to put in trades with your broker who had to know you personally. Think $100 per trade.
When that minimum commission was broken discount brokerages were created. Trades were done over the phone with a generic broker. Charles Schwab is a example. Commissions fell to around $25 to $50.
The 90s saw the rise of internet brokers. Trades now down to $15. E-Trade is a example.
The 00s saw payments for order flow. Trades fell to $0.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: John Bogle on Dividends
I have no issue with someone liking to get dividends. It is also not a like that I have, but that is neither here nor there. I don't think anyone has ever been saying that anyone is not allowed to like getting a dividend deposited in their bank account. It would be unusual these days to actually go out to the mail box to pick up a check. I do actually remember doing that, and the stocks were a bundle of certificates with a rubber band around them in a safe deposit box.GoneOnTilt wrote: ↑Wed Oct 13, 2021 12:34 pmAgreed. I like dividends. I don't overly reach for them. But I like them. I like when they hit my account. They're part of the total return. I like knowing they'll cover a good chunk of what I'll need when I retire in a few years.
The other reason I like them is that they're a bird in the hand, so to speak. I have no idea what the stock price will do tomorrow or the next day. At least I have the dividends in my account. I don't thin there's anything wrong with that thinking.
As you said, no reason for alarm. It's a reasonable approach.
On the issue of bird in the hand, however, I think you are mistaken. In the end the value of your portfolio will be determined by what the returns are and how much you withdraw over time. Getting dividends in a certain amount today does not ensure that your portfolio will survive to meet your needs over time. Setting withdrawals according to dividends received can result in taking more than is prudent or in spending less than you might well do from your hard earned and saved assets. It is an incomplete view of what is going on. It also means you are letting the nuances of corporate dividend policies determine the use you make of your assets. That does not seem like smart investing.
You mention asset prices varying, but that has nothing to do with what plan you follow to set your withdrawals. As others have mentioned you can set your withdrawals to be anything you want, in particular a monthly deposit in a constant fixed amount from your broker.
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Re: John Bogle on Dividends
Agreed, but either does relying on the market price, the future of which is unpredictable. I was simply pointing out that I find it nice to have the dividend portion of the total return in my hot little hands at the time I receive them. Again, this is not to say I would ever invest anything close to a majority of my portfolio in a high-dividend fund or some such thing. No thank you. But the closer I get to retirement, the more attractive dividends seem. As Bogle said,
"Bet on the dividends, and not on the market price." To a point, I don't think it's unreasonable or unwise. And neither did he.
The other aspect of this of course is psychological. Not every investor is a Buffett-style investing-machine who can handle volatility without blinking. If tilting somewhat toward blue-chip dividend-payers helps someone stay the course, so what? God bless.
Re: John Bogle on Dividends
There are lot of investments that don't pay dividends that don't grow in perpetuity. No one is claiming every dividend investment DOES grow in perpetuity.alex_686 wrote: ↑Wed Oct 13, 2021 11:22 amI think you have hit the nail perfectly on the head - on how dividends lead people astray.
Lots of people believe what you just wrote. It is intuitive. But is it correct?
There are lots of investments that pay dividends that don't grow in perpetuity. Some will go bankrupt. Others are designed to expire.
From a Total Returns perspective does it make any difference if I take the dividends from a dividend paying stock verse selling a of a non-dividend paying stock? From a accounting, theoretical, or historical perspective the answer is no.
It does make sense from a psychological perspective as a method to limit spending. But you have to admit there is a very tenuous link between what a CFO thinks a company should pay in dividends this quarter and what you should be spending.
No clue what you are alluding to about a psychological method to limit spending. Huh?
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Re: John Bogle on Dividends
In the situation you describe above, both should come out pretty close to even, since most stock dividends are qualified dividends (depending on holding period, etc), and are thus taxed at the capital gains rate.Ramjet wrote: ↑Wed Oct 13, 2021 11:38 amI think sometimes dividend investing could cause you to be taxed moreGoneOnTilt wrote: ↑Wed Oct 13, 2021 10:44 am I wonder why there is so much opposition to dividend investing on this forum?
Scenario: Both investors A and B are retired and their funds are in a taxable account. Investor A is living off individual stock dividends and Investor B is living off a total market fund (assume no dividends for simplicity). They both sell shares to pay for an upcoming expense
Result: Investor A is taxed on the full amount of his dividend income. Investor B is taxed only on the gains. Investor B comes out ahead
Obviously in a tax deferred account it doesn't matter
Re: John Bogle on Dividends
Gobsmacking == being on bogleheads. professing to be a boglehead. Except when the man himself (Bogle) states something about dividends that goes against the group think here.dbr wrote: ↑Wed Oct 13, 2021 11:27 am Most people here do not agree that investing in retirement is about going out to your mailbox and [figuratively] picking up a SS check, a pension check, and a dividend check. Most people here would agree that retirement is about [again figuratively] going out to your mailbox and picking up a SS check, possibly picking up a pension or fixed annuity check, and picking up a check from your broker for a withdrawal of some amount from your portfolio. What the amount is that should be withdrawn from your portfolio takes more thought and understanding of investments than that it just be some random dividend check paid by some stock. Frankly it is inexplicable why that particular narrative would be offered. But Mr. Bogle has said a lot of things that one finds gobsmacking. Aside from all of that retirees with taxable accounts very often do in fact go to their mailbox and pick up a dividend check, but that is hardly the end of it. Considering that a large fraction of retirement investments are held in tax preferred plans that don't issue dividend checks and often don't even issue dividends, that Bogle narrative does not even make sense. It is beyond me what he intended to convey by it. The argument that one should set spending at whatever dividends you can arrange is clearly faulty. In any case the 2% dividend you can get from the total market today is far less than you can perfectly reasonably withdraw and it would be silly to only spend that amount for the reason that this is what comes in the dividend check. It would be a mistake to spend too much just because you can find a large dividend somewhere, and it would be a mistake to distort the asset allocation by concentrating in too narrow a selection of assets.
Also, this forum is not opposed to "dividend investing." The forum is opposed to the idea that dividend investing involves a special sauce that evades the principles of investing. The most extreme form of that is the illusion that dividends are free money but there are plenty of other illusions. None of this is opposed to someone who knows what they are doing selecting stocks by dividend or setting spending equal to dividends if they want to.
More gobsmacking - an argument against one setting spending based on what the dividends are, when no one (including Bogle) made that argument.
Re: John Bogle on Dividends
1.) I don't proclaim to be an all in boglehead.skierincolorado wrote: ↑Wed Oct 13, 2021 11:36 amSo you'll do exactly what Bogle advised not to do - deviate from the market.olyveoil wrote: ↑Wed Oct 13, 2021 11:11 amI fail to see where he advocated for "dividend chasing". But, you read what you want to hear. That is fine.skierincolorado wrote: ↑Wed Oct 13, 2021 10:58 am I mean what is the context of these quotes? They sound pretty dumbed down and designed for an investor not capable of managing SWR or VPW. It sounds more like he's saying this is a convenent way to manage your withdrawals - just let CEOs do it for you. He also said it before the dividend rate on the S&P500 fell to 1.3%. Collecting dividends at a 2.5% rate historically was a pretty decent, somewhat conservative, way to approximate a SWR. Now you'd either need to sell shares, or seriously deviate from a market index, in order to get more than the 1.3% the S&P500 currently offers. I'm quite certain Bogle would have chosen the former over the latter.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
Me? I will build some dividend payers 6 years prior to retirement and gladly take those "risky--bad" dividends during retirement.
If you want a CEO to return your principal to you on her schedule, rather than returning principal to yourself on your schedule, that's your call.
2.) The operative word in my declarative statement is "some"
3.) Are you doing exactly what Bogle advised to do regarding dividends in the OP?
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Re: John Bogle on Dividends
I'm going to do what is rational, which is return my principal to myself on my schedule, rather than the schedule decided upon by a CEO. I think that's consistent with what Bogle said. Deviating significantly from the market portfolio is not.olyveoil wrote: ↑Wed Oct 13, 2021 3:16 pm1.) I don't proclaim to be an all in boglehead.skierincolorado wrote: ↑Wed Oct 13, 2021 11:36 amSo you'll do exactly what Bogle advised not to do - deviate from the market.olyveoil wrote: ↑Wed Oct 13, 2021 11:11 amI fail to see where he advocated for "dividend chasing". But, you read what you want to hear. That is fine.skierincolorado wrote: ↑Wed Oct 13, 2021 10:58 am I mean what is the context of these quotes? They sound pretty dumbed down and designed for an investor not capable of managing SWR or VPW. It sounds more like he's saying this is a convenent way to manage your withdrawals - just let CEOs do it for you. He also said it before the dividend rate on the S&P500 fell to 1.3%. Collecting dividends at a 2.5% rate historically was a pretty decent, somewhat conservative, way to approximate a SWR. Now you'd either need to sell shares, or seriously deviate from a market index, in order to get more than the 1.3% the S&P500 currently offers. I'm quite certain Bogle would have chosen the former over the latter.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
Me? I will build some dividend payers 6 years prior to retirement and gladly take those "risky--bad" dividends during retirement.
If you want a CEO to return your principal to you on her schedule, rather than returning principal to yourself on your schedule, that's your call.
2.) The operative word in my declarative statement is "some"
3.) Are you doing exactly what Bogle advised to do regarding dividends in the OP?
Re: John Bogle on Dividends
--wish there was a LIKE button.GoneOnTilt wrote: ↑Wed Oct 13, 2021 12:34 pmAgreed. I like dividends. I don't overly reach for them. But I like them. I like when they hit my account. They're part of the total return. I like knowing they'll cover a good chunk of what I'll need when I retire in a few years.
The other reason I like them is that they're a bird in the hand, so to speak. I have no idea what the stock price will do tomorrow or the next day. At least I have the dividends in my account. I don't thin there's anything wrong with that thinking.
As you said, no reason for alarm. It's a reasonable approach.
Re: John Bogle on Dividends
Except for what he said 6 short years ago in the OP.skierincolorado wrote: ↑Wed Oct 13, 2021 3:21 pmI'm going to do what is rational, which is return my principal to myself on my schedule, rather than the schedule decided upon by a CEO. I think that's consistent with what Bogle said. Deviating significantly from the market portfolio is not.olyveoil wrote: ↑Wed Oct 13, 2021 3:16 pm1.) I don't proclaim to be an all in boglehead.skierincolorado wrote: ↑Wed Oct 13, 2021 11:36 amSo you'll do exactly what Bogle advised not to do - deviate from the market.olyveoil wrote: ↑Wed Oct 13, 2021 11:11 amI fail to see where he advocated for "dividend chasing". But, you read what you want to hear. That is fine.skierincolorado wrote: ↑Wed Oct 13, 2021 10:58 am I mean what is the context of these quotes? They sound pretty dumbed down and designed for an investor not capable of managing SWR or VPW. It sounds more like he's saying this is a convenent way to manage your withdrawals - just let CEOs do it for you. He also said it before the dividend rate on the S&P500 fell to 1.3%. Collecting dividends at a 2.5% rate historically was a pretty decent, somewhat conservative, way to approximate a SWR. Now you'd either need to sell shares, or seriously deviate from a market index, in order to get more than the 1.3% the S&P500 currently offers. I'm quite certain Bogle would have chosen the former over the latter.
The big takeaway for me is he points out the risk of deviating from total market. So dividend chasing is risky and bad.
Me? I will build some dividend payers 6 years prior to retirement and gladly take those "risky--bad" dividends during retirement.
If you want a CEO to return your principal to you on her schedule, rather than returning principal to yourself on your schedule, that's your call.
2.) The operative word in my declarative statement is "some"
3.) Are you doing exactly what Bogle advised to do regarding dividends in the OP?
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Re: John Bogle on Dividends
Maybe it would easier to say you're opposed to dividend investing instead of repeating the free money angle and other illusions. In my opinion, the issue is the word "Index" is missing.dbr wrote: ↑Wed Oct 13, 2021 11:27 am
Also, this forum is not opposed to "dividend investing." The forum is opposed to the idea that dividend investing involves a special sauce that evades the principles of investing. The most extreme form of that is the illusion that dividends are free money but there are plenty of other illusions. None of this is opposed to someone who knows what they are doing selecting stocks by dividend or setting spending equal to dividends if they want to.
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Re: John Bogle on Dividends
Yeah, this "illusion that dividends are free money" trope -- I've never seen anyone on this forum ever say that they think "dividends are free money."Cash is King wrote: ↑Wed Oct 13, 2021 3:30 pmMaybe it would easier to say you're opposed to dividend investing instead of repeating the free money angle and other illusions. In my opinion, the issue is the word "Index" is missing.dbr wrote: ↑Wed Oct 13, 2021 11:27 am
Also, this forum is not opposed to "dividend investing." The forum is opposed to the idea that dividend investing involves a special sauce that evades the principles of investing. The most extreme form of that is the illusion that dividends are free money but there are plenty of other illusions. None of this is opposed to someone who knows what they are doing selecting stocks by dividend or setting spending equal to dividends if they want to.
I just don't get it.
Re: John Bogle on Dividends
But I am not opposed to dividend investing whether by index funds or stock picking if someone wants to do it. What would it even mean to be opposed to someone investing whatever way they want?Cash is King wrote: ↑Wed Oct 13, 2021 3:30 pmMaybe it would easier to say you're opposed to dividend investing instead of repeating the free money angle and other illusions. In my opinion, the issue is the word "Index" is missing.dbr wrote: ↑Wed Oct 13, 2021 11:27 am
Also, this forum is not opposed to "dividend investing." The forum is opposed to the idea that dividend investing involves a special sauce that evades the principles of investing. The most extreme form of that is the illusion that dividends are free money but there are plenty of other illusions. None of this is opposed to someone who knows what they are doing selecting stocks by dividend or setting spending equal to dividends if they want to.
Last edited by dbr on Wed Oct 13, 2021 3:44 pm, edited 1 time in total.