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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: JimisJim who wrote (30450)	1/21/2019 5:20:11 PM
From: spindr00	Respond to of 34328

"I’ve owned T for yrs... VZ, too... in your scenario, I would have lost nothing since I would not sell and would instead be happy I got more shares than otherwise from the drip and therefor would get even higher divvies in the future. I am talking about companies that have 25-100 yrs of paying divvies, and many that have raised them every year." If your total equity position has declined in value (current value of equity position plus dividends received), you have lost money. Selling the equity position only turns an UNREALIZED loss into a REALIZED loss. Choosing to hold such a deteriorating position does not mean that you haven't lost money. Try buying on margin and then when your broker calls and requests additional money because share price fell and you violated the Reg T minimum margin maintenance requirement, tell him that you didn't lose money because you didn't sell. See how far that gets you (Hint: Your broker is going to sell your position to cover the margin deficit). "I cannot lose money collecting dividends. Period. I am getting a check that goes up faster than inflation - something I could not even count on working for others." Given how the ex-dividend process works, yes, you cannot lose money collecting dividends other than if it's a non sheltered account, you're paying taxes for the privilege of receiving that dividend which does not increase the dollar value of your position. But again, other than the tax issue, I made no mention of losing account value because of a dividend. What I stated is that you're not making money from it. So tell me this, how can it be income if it doesn't increase account value? "I apologize if my tone seemed aggressive, but out of 2-3 previous posts, you’d basically stated we seem preoccupied with divvies and you didn’t understand why despite the name of this board, and you seemed to argue that was something bad." Again, you haven't followed what I have suggested. A dividend isn't "something bad". At best, a dividend reduces your dollar exposure since on the brokerage account level, it's a return of the investment capital you paid for your equity (let's not go off on a tangent about the corporate side and dividends arising from earnings). In addition, a small benefit from the dividend is a modest amount of compounding should share price appreciate. If it drops, dividend reinvestment loses money (see any DRIP calculator to verify this). The success of DGI doesn't come from the dividend. It comes from investing in financially healthy companies whose share price appreciates as earnings appreciate. As Steve (?) pointed out in his charts, S&P companies that pay out dividends have outperformed S&P companies that did not. The nuance is that the success is due to the quality of the company that you invest in and that is a by product of your due diligence. The dividend isn't causal. Paying you the dividend reduces company assets and that is antithetical to rising share price. It's the earnings growth that compensates for that reduction and then some, if your DD was spot on.