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How to look at stocks: Real estate goes up & down but rents stay the same. Do you sell your property if the market goes down? Blue chip stocks go up and down but dividends usually stay the same or may get decreased. Do you sell great companies from normal fluctuations. Take: IT IS NORMAL FOR MARKETS TO FLUCTUATE
Dividend Growth Investing I think the fear in stocks is because it’s always in your face and accessible, whereas realestate you don’t know the fluctuations unless you consult a evaluation or sell. I believe if you are a person with emotions who’s in stocks. Set up a automated share purchase plan and don’t excessively look at your portfolio. 😃😃
Before even watching and hearing your thoughts my opinion is ETFS for beginners ! Individual if you know what youre doing . I personally like individual stocks .
I agree. Starting out with ETFs is really the best way to go if you are new to investing, then slowly adding individual companies to your portfolio. Thanks for watching Dejan!
I've been doing ETFS but just got into individual stock's. Right now I do a 80-20 split of etfs and individual stock's. I might increase it later when I feel more comfortable but ETFs definitely feel safer
ETFs don't go to zero! You aren't punished as bad with picking the wrong investment as you are with picking individual stocks. Thank you for watching!!
A combination of ETFs and stocks work best for me, somewhere at 80% ETFs plus 20% stocks (and maybe leveraged ETFs and stuff). With a mixture of market ETFs and sector ETFs, you pretty much guaranteed a market average return. A few individual holdings allow you to enjoy the stock picking process, and potentially drive your return even higher.
Ive recently changed my strategy quite a bit. I now invest 80% in etfs and 20% in a few forever stocks that i want extra exposure in. Thanks for the video, and great idea on coaching people to help their career. A nearly priceless service, im sure!
I personally like ETF's, the true average return is that of the total stock market. I also "currently" enjoy the above average return with growth ETF's. Also I like the idea that ETF's never need to be sold, just collect small divs. I feel like the returns on individual stocks is not worth the headache, research, monitoring etc, if I can just be over leveraged on quality etfs
If you don't know what you're doing or don't have the time or interest go with dividend ETF's. In general though you'll lose out big time on dividend growth compared to having individual shares though. But if you want simplicity, it's the way to go.
As i have been going in this journey, feel like the only time you should be hand picking stocks are for new (or evolving old) growth stocks that you feel their upside is not already priced in. These are the companies that can 10-100x your investment, the risk is higher but the chance of gains are worth it. Dividend companies usually wont do this so you are picking an individual stock at a higher risk to beat the average maybe 1-5% - if you are lucky. As others said try it all at smaller amounts so you learn what style suits you best. Roth IRA = REITs. Taxable account = growth stocks and non-REIT nonMLP dividend ETFs
Hey Justin! I tend to agree with you. When it comes to investing for early retirement, having dividend growth stocks can be very powerful in a taxable account.
I perfer investing into invidiual stocks where my beginning of stragedy was embracing ETFs in the sense of using them as guide, ones like MGK, DGRO, FREL etc lookin through top 1-25 holdings of each funds to build my portfolio around under M1 platform making Pie's for real estate, Large-Mip cap growth etc. (In tht process looking at stock growth over the years, its yield, debt ratio, yearly dividend growth percentages etc) M1 is great platform to essentially create your own ETF with no expense ratio. Only sector id keep as ETF is small cap growth given the high volality or even tech etfs. My only real con with invidiual stocks imo is when time selling, the tax implications of entering every stock sell. (When tht time comes). As young investor, theres surely mistakes and gettin overwhelmed maybe having too many (above 40 in my taxable currently) but will work down as time goes by. Better to be invested then not be , at the end of the day.
One thing I really like is that you can invest into a certain criteria that meets your goals. I also think it's mostly a waiting game if you have an unrealized loss. There aren't really any bag holders in the bigger ETFs.
Exactly! It also makes it a lot easier to buy down with confidence. Imagine doubling down into JCP right before they went bankrupt. It really helps new investors invest where they otherwise might not have.
I still think there are plenty of bad ETFs out there but with some of the top ones it's really splitting hairs. Some may underperform a little but that's about it. I think ETFs are such a competitive price now that it's just hard to beat. It's almost an ego thing not to go with them.
if you don't have a lot of money to invest, you can start with like 50, 100, ... $ per month into a dividend etf. It's important to start. The dividend snowball will be small, but if the hill is long, it WILL grow bigger. And if you do this, within ten years, you'll have grown a decent sum and you can still decide if you want to go on with the ETF or go for individual stock. Truly, this video, is one of the best on this subject!
What's riskier, buying stocks from great companies you know or blindly buying 500 different stocks from companies that you don't know anything about and have no control over... I personally like stocks over ETFs, because of the control it gives me and because I don't get to pay the ETF expense ratio, also because of the high ETF tax where I'm from. But I can see where you're coming from, and I think that if you are happy with market returns and or don't know how to or don't have the time to look into the company's you invest in, buying an ETF might be better.
It is good that I'm the perfect character archetype for an investor. I'm completely non-emotional. I love doing tons of research and understanding everything in depth. I'm patient and can hold a company for a long time. While I had invested into many etfs, I mainly invest into them due to their performance or their discount value. I just love flexibility which picking your own stocks give you.
You are way ahead of the game! If you already know what type of investor you are, you are in a much better position to start and are unlikely to change your approach down the road.
@@DividendGrowthInvesting Only time will tell if I'm going to be successful. I have a lot of promising biotech companies which shows promising research results on ground breaking drugs like cancer curing drugs. Their price is very low and continues to fall, but if they those biotech companies continue their current success, their price can jump rapidly in this decade. I also have two promising mining companies in Chile. One already done research and preparing excavation. Another only had acquired a lot of promising land. First one is cheap, another is penny stock. If they ever successfully manage to build mining operation from nothing in economic environment which will be extremely bullish towards precious metals producers, penny stock is bound to return my investment in the thousands of percents. However, only time will tell. These growth stocks in a short period can be very bearish and it is discouraging to see your portfolio down 10% from a get go, but you believe in your own intuition, research and management of a companies in which you invest in. Other than that, I just want to build myself a nice dividend portfolio and live off solely from dividend income. That is my dream.
So, some feedback. Some companies on which I have done research did amazing. Others did poorly. I managed to underperform while market was ahead and overperform during recent depression. A lot of my biggest loses were in companies in which I invested out of idea. Like investing into airline company while it was down while waiting its stock recovery. Others, I know their game, but I was fine with it. Like Ichan Enterprises. Others like Biotech companies, I discovered how media pumps up their stock. All of these loses were minimal as I would only invest symbolically buying one stock. It was to gain experience and I did learned a lot just by passively owning some stocks.
Thanks for the info. I choose ETFs, namely VYM and VYMI for the same reason. When there’s a dip, I get more, when there’s a move up, I get less. I still sleep at night. And I can focus on my life and job and family and hobbies and let someone else run the investment.
AK-Money I talk about SPHD in a previous video regarding monthly dividend ETFs. It’s one of the better monthly dividend ETFs. I don’t personally own it though.
I am a new investor documenting my journey. I am mainly investing in ETF’s really looking to build a strong foundation for dividend income with growth. It’s going to be my retirement that will allow me to maintain or have a higher standard of living. I am happy with the average return of the market. I do own single stocks but is a smaller percentage iShares Developed Markets Property Yield ETF USD Dist Vanguard S&P 500 ETF Vanguard FTSE Developed Europe UCITS ETF (EUR) Distributing
I've been thinking of dividend etfs the past couple of days cause I don't really know how to pick and choose good individual stocks. Thanks for posting this 👍👍👍
Buying an individual stock is basically saying either that you know more than the market about this stock, or that you hope that something you don't know about the stock will go in your favour. No individual investor knows more about a company than the institutional investors whose trading largely sets the price do. And the price does matter, as the dividend comes out of it on the ex-dividend day, so buying a stock for the dividend still indicates that you believe that the price will at least rise enough to pay the dividend (otherwise you'd come out even or lose money). ETFs fix part of that uneven knowledge relation. You can't out-research the big guys, so you buy the basket. There are always anecdotes like "well if you bought stock A from index B instead of the index fund, you'd have beaten Index B". Sure, but a lot of people also would have bought the many many stocks in the index that dragged the index return down. Putting the spotlight on stock A is a case of 20/20 hindsight. It's better to buy the winners and the losers through an ETF, than risk overpicking the losers.
I roll with a mix. Currently 20 dividend stocks and 2 dividend etfs I believe strongly in. I dont want many more individual stocks. 25-30 stocks is my limit. I do invest in bluechip dividend aristocrats/kings mostly so honestly I dont need to follow up all that much other then buying at or under fair value. The etfs are there incase Im wrong and to get broader exposure.
ETFs is also good in a Taxable account where the dividends will be low but high enough to give you profits. Low because you dont want all those dividends to increase your tax bracket and taxes.
Exactly!! That is a great call out. This is especially important for younger investors. If done correctly, you can optimize it so the snowball effect really takes off shortly before you retire.
Dividend ETFs are safer and easier but your income will be very inconsistent. Solid individual stocks provide more return and constant dividend growth. There are a lot of safe dividend stocks out there.
I'm like you. I like both individual stocks AND ETF's. As far as market fluctuations, I can sleep well at night with both. The reason for this is that although it's nice to see the portfolio value grow, I invest to grow dividends, not for the current market value of my portfolio. And while dividends may fluctuate, they are much more stable than market prices. That, combined with the fact that my goal is to build passive income for retirement is why almost all of my holdings are in dividend producers - both ETF's and individual stocks. Another way to look at bear markets is that they are a wonderful opportunity to buy more shares AND take advantage of higher yields! Passive investors sleep much better than speculators.
90% VWRL and 10% FTSE Global Bond Index for me for now. Might create a small individual stock portfolio of 8-10 solid blue chip dividend companies to supplement it 😊 love investing!
Motley Fool is trustworthy this helped me turn 10k into 20k in one year. This return required critical thinking proper Judgment. I stop due to mental strain. To avoid the Dopimine train
I started investing in April im in my mid 30's,most people our age with go with etfs ,but for me im alot more comfortable in investing individual dividend stocks,I make sure I own high quality stocks,if I have a company thats not doing well or hasn't been or cut their dividends,I dont hesitant to get rid of them.Im happy alot of the good quality stocks have been raising their dividends that I own,especially when the market has been taking a hit since I started,which puts me a ease just gonna keep focused on staying in and constantly investing more in the market,its the only way your going to enjoy the fruits of labor in the future.great video thanks for sharing.
You definitely started investing at a wild time, but your timing couldn't have been better with the market crashing and getting a lot better valuations. Thank you for watching!!
As someone who made alot of mistakes when he first started, shorting companies using option trading and losing $1,000. I can attest that day trading is the worst thing to do. The best is to not focus on technical analysis but qualitative analysis (fundamentals). I used to hate when companies went red. Now I am hoping for corrections for the great prices.
A good complicated enough topic that warrants investigation, but I am disappointed that you did not mention satellite investing , where ETF's make up the greater % of investment, but also include some individual stocks for diversification, taking advantage of personal knowledge of some sector or business area, social support, etc. Good points re volatility, expense ratios, gain potential, etc. Like that you have VGT O, DLR, JNJ. Future topics might include: 3 fund approach
I don’t have M1, but the way it’s arranged with the PIE’s, it’s basically your very own custom made ETF. Personally i have 2 ETF’s (VOO and VDE) and the 13 individual companies i am long in (AAPL, MSFT, DIS, T, FUN, CCL, GIS, KO, LMT, UNP, MCD, SNE, NVDA) but the 2 ETF’s account right now for 1/3rd of my portfolio, and the VOO is a kind of base/safety net.
Yo, love the video. Had a question for you though: Do you think getting SA premium or another analysis sites premium is a good idea? or do you avoid it?
I personally think that SA offers enough with their free services that you don't necessarily need the premium version. Websites like these tend to change their services over time and reduce free functionality. In the future if they were to restrict basic services and charge a fee, I would consider paying for it - but for now I am fully satisfied with the free services.
Could you say buying all your individual stocks is like making your own etf? And could it also maximize your gains by not having to pay a fee to own the etf?
Really great call out, Jacob! I don't go into detail about the differences in different account types, but this also plays a role! When it comes to retirement accounts, I only hold low fee index funds.
Thank you for your very informative and clear explanation on ETF's.I am learning a lot.I recently bought my first ETF. I am new with investing so I think investing in an ETF is the right thing for me now. I did not stress in march/April either when the market too =k a downturn. The only thing I did not do was to invest more into the market. That was my learning curve!!
Thank you!! I really enjoyed this video! Is there a way to compare the actual dividends received from a $10k etf vs $10k individual stocks? Also can you do a spotlight on clm or crf or hndl to explain how their dividend works? I think they are returning principle but can't quite understand it
Thanks for watching!! You can compare the historical performance of ETFs and individual stocks from these sites: dqydj.com/etf-return-calculator/ dqydj.com/stock-return-calculator/
Great video ! I probably have 20 individual stocks with 7 of them being utilities and 1 ETF ( VPU ) . I’m very bullish on utilities because of their wide economic moats, steady income , everybody needs it and etc.... I know that they don’t grow much , but that’s OK with me because I have no time horizon and I’m establishing generational wealth !
Thanks for this. What are your thoughts on adding foreign stocks? I've watched some other DGI vids and I came across some in investing in dividend stocks outside of U.S. as a way of diversifying. Do you have any foreign stocks and or plan in buying any? If so, any recommendations on which ones to buy?
Great question! I have shared this in previous videos, but I haven't made an entire video dedicated to this topic. In my taxable account I don't own any international stocks. The main reason for this is the taxes that come with investing in international companies. For example, if there was not a 35% international dividend tax on Nestle, I would invest into Nestle over Hersheys. For this reason, I prefer to invest in Hersheys. I do own VXUS in my Roth IRA, but this only makes a small percentage of my overall portfolio. I hope this helps!
I may have missed it - did you mention what percentage of your investment is in individual stocks vs ETF ( dividend bearing of course)? Thanks. You are doing a wonderful service with this channel.
I came across your RUclips channel recently and have been watching a few videos. You seem very knowledgeable and give out great content. I have a few questions: 1. Why is your Real Estate pie separate from your stock pie? I know it’s all preference and doesn’t really matter, but why didn’t you just make a Real Estate slice in your Cash Flow pie? 2. You have 80 holdings in your Cash Flow pie and 32 holding in your Real Estate pie. In addition, you have multiple ETF’s in those pies. Do you think that is too diversified? With that many holdings, it is very tough to stay updated on all of it. I would love to hear your answers. Thanks and keep up the good work. - Allan
Hey Allan! Great questions! Regarding the first question, I have my real estate pie in a separate account for two reasons. The first reason is at the time when I was setting up my portfolio, I originally had over 100 holdings (combined). I decided to break this up and have my real estate holdings in a different account within M1. The second reason reason is I view my real estate portfolio as a side project and not something that I want to aggressively fund at the moment. In regards to your second question, I actually tend to agree with you. I have shared that I don't recommend that everyone does this. I would not have 80 holdings if it were not for M1 Finance. With M1 it makes it very easy to set your portfolio up with this type of strategy. I also have a vanguard portfolio that I've shared in a recent video and that portfolio only has 10 holdings. Despite all of this, I actually don't think that having 80 holdings is over diversified (I wouldn't recommend it for everyone though). In a recent video where I talk about my goal of creating a $2 million portfolio, I share in more detail about this. At the end of the day, I don't recommend everyone set up their portfolio this way. For example, I helped my wife set up her portfolio and she only has 22 holdings (including ETFs). I hope this helps!
@@DividendGrowthInvesting I watched the video about your $2M goal. So the main reason you have 80 holdings is to have a more consistent pay out payout schedule? Do you have an action plan on if one of your holdings decide to cut their dividend or suspend it? For example Disney was a small part of your holding and they suspended their dividend temporarily.
@@amjr2119 Another great question! The 80 holdings are a way to diversify and to spread out my dividend payouts. I do not recommend this for everyone. Before using M1, I would have only had around 40-50 individual holdings. M1 makes it incredibly easy to hold more holdings. I follow the suredividend 8 rules of dividend investing. Number 7 talks about when a company cuts their dividend. I have held onto DIS despite them suspending their dividend this year. I do not plan to sell DIS anytime soon; however, DIS only makes a very small percentage of my portfolio. www.suredividend.com/8-rules-dividend-investing/
Great video. I have only recently started my Dividend portfolio, VYM was my first choice, SCHD my second, by I am not sure if I will add more ETF's. I am currently considering just funding VYM, simple, one and done. Could you elaborate on why you have 3 different Dividend ETF's? Analyzing them, 89% of SCHD's holdings are in VYM. And about 49% of DGRO's are in VYM. If the overlap is big, why not go with just one? At least that's been my reasoning so far.
You are correct that there is overlap. If you look at the % of each holding though, you will see that there is not equal distribution in each. Having 0.01% is not considered really overlap in my opinion. All three of these ETFs screen companies differently and have a different methodology for adding companies. DGRO is more focused on growth. If you look at the sector weighting, DGRO is more skewed towards growth and has more exposure to technology.
Hey, I'm a little late to the party. I work at the moment as a software dev and I would like to ask from your experience if there is a huge pay check between someone that does sales and one that does qa / backend for example? thanks!
Jake, I am not looking to do software sales, but could I book time with you to discuss some investment ideas I have for my own personal scenario? I know you are not a professional financial advisor nor I am looking for you to tell me what to invest in, it would be more to just have a conversation and bounce some ideas to hear what you think.
I want to be overly careful when it comes to exchanging investment advice for money (which I am not doing). I'd love to chat with you and hear about your ideas and I can share some ideas that are working for me and why I do certain things with my portfolio.
I totally understand, I would consider it simply an exchange for your time to have a conversation, do you have instagram or another way for me to DM you?
Over diversified amigo, you just need 15-20 stocks.. add a few etfs and index funds, not a bunch of them, less than 5.. compound those dividends faster!
the power of compounding is not impacted by the number of stocks you hold. I think this depends on the person. Not everyone will want to have that many stocks and some people will want to have more. Depends on the person.
I invest in individual stock and one ETF - SPHD. What are your thoughts on that one? I'm trying to build it up to the point where the monthly dividends buy a new share of itself each month, and then I'll probably turn my investing back to individual stocks while it just builds itself up each month.
Hi Chris! I think SPHD is one of the better monthly dividend ETFs out there. The expense ratio is low and the holdings are in most cases well established companies. I shared a video on monthly dividend payers in a previous video where I talk a little about SPHD. The cool thing about dividend investing is it doesn't have to be one or the other. You can always adjust your %s as time goes on. Thank you for watching!!
21 stocks, mostly individual. One ETF and one individual paying enough dividends to buy another whole share every time it pays. Only 19 more to go, this is going to take years.
David Guerra yeah I did research I’m going to be putting around half in vym and other half in schd I’m also thinking about dgro but I kind of want it to be only 2 etfs in my portfolio what would you reccomend
Girthzilla VYM is down compared to the SP500 because it has less sector exposure to technology. VYM has more exposure to financials which are down in 2020.
@@DividendGrowthInvesting I am 53 years old and plan to retire at 65, what ratios and Index funds would you recommend? I prefer to keep everything with Vanguard.
@@crowderscustomizing Assuming your goal is to live off the dividends and not sell shares, I personally would focus on current yield. With a 12 year time horizon, you want to look for companies that have a higher starting yield in my opinion. There are other factors that come into play, for example in which account your are investing (e.g. Roth IRA vs taxable account). My favorite high yielding vanguard index funds for current income are: VYM, VNQ, VPU, VDC.
Great vid! This sounds like a really silly question, but does the dividend yield of a dividend growth etf actually increase over time? I’m assuming once a company stops growing their dividend then they’re taken out of the etf and replaced with a smaller company that pays a smaller dividend that will grow over time, so does this mean the yield generally stays pretty flat?
Hey Robin! Yes, the dividend can increase quite significantly with ETFs just like with individual companies. This depends on the ETF and the holdings in the ETF. The process in which the ETF screens companies really depends on how quickly the yield will grow.
Hey Nick! It depends on two things - the first what type of debt is it. Is it something that is generating you income (e.g. an asset that appreciates over time) or is it something that costs you money (e.g. a depreciating asset). The second is the interest rate. I personally feel that anything over a 4% interest rate should be paid off first as soon as possible.
• Hi, great video! When I think of passive investing, I think of set it and forget it. It doesn’t matter if it’s a red or green day for the share price, you buy it regardless. So when people invest in a cyclical company like Exxon Mobile ONLY for the dividend income, should they be concerned about when to buy it, or can they set it and forget it and buy it at whatever price its at, so long as their ONLY in it for the dividend income? Should I be concerned about the share price and paper losses of my principle while passively collecting the dividends? Exxon is a dividend aristocrat which means its dividend is generally considered safe. If not Exxon Mobile, are there any individual dividend paying companies that I can passively set it and forget it, like maybe 3M?
Hey Jake, I have been wondering about one frequent statement you and other dividend investors keep repeating. Everyone always recommends investing in low yielding growth companies such as MSFT or Visa "because you have time for that dividend to grow". My question is why you expect this strategy to outpace investing in things like O or KO in terms of cash flow. Do you mean that it's worth it because you'll have a higher yield on cost many years down the road? Is it because the portforlio value will likely be higher in the end? You will miss out on much cash flow during these growth years and I'm wondering if you will ever catch up as it is unlikely that the yield will far exceed the established dividend companies for the same reason their dividends aren't higher. I hope I phrased my question in an understandable way, please ask for clarification if it's unclear!
You phrased it perfectly! You actually answered your own question. When it comes to cash flow, time and growth % plays a very important role. For example, investing in O or KO is a very good strategy if you plan to need the cash flow (dividends) sooner. When looking at MSFT and V, you will need a much longer time frame to generate the same cash flow (assuming the same amount is invested in both scenarios). It would take significantly longer (e.g. 20 or even 30 years) for you to reap the same cash flow levels by investing in MSFT or V compared to KO or O. Taxes also play a role here. You will pay more taxes with KO and O (because you are generating more income/dividends each year). If you didn't want to ever sell MSFT or V, it will just take you much longer. Determining which is better for you really depends on your time horizon. If you plan to tap into your dividends within 10 years, then KO and O are much better for this goal than MSFT and V. I hope this helps!
@@DividendGrowthInvesting Thank you for the reply. I'm 24 and just started working my first real engineering job a month back. I've budgeted to invest 50% of my post-tax income and will hold that level for at least 5 years and then step it down to 40%. My goal is to be able to (but wont) retire at 40 years old, i.e. my portfolio should be able to support my lifestyle completely at that point. So I should probably mix these types of dividend stocks in my portfolio?
I like the diversification of ETFs, since it’s not realistic for me as an individual investor to buy every single stock I’m tempted to buy. Because trust me it’s a lot! Haha...BUT with that said I like saying I hold McDonald’s every time I’m chilling in the drive through!😂
lol I am the exact same way!!! Whenever my wife tells me to turn off the light and says I don't own the power company, I always respond with "well.. I do own some of it."
Is it legal to sell your view on stocks etc when you are not licensed 🤔 I understand you put the disclaimer but isn't the license for allowing you to sell your service in the field.
Great question! You are exactly right that if you exchange money for financial advice, the person is required to be licensed. I am not offering financial advice on investments during these calls.
That is the great thing about dividend investing. Not everyone has the same goals or priorities. I think most people would be better of holding a small handful of high quality ETFs.
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instablaster...
How to look at stocks:
Real estate goes up & down but rents stay the same. Do you sell your property if the market goes down?
Blue chip stocks go up and down but dividends usually stay the same or may get decreased. Do you sell great companies from normal fluctuations.
Take: IT IS NORMAL FOR MARKETS TO FLUCTUATE
I love this analogy!!!
Dividend Growth Investing I think the fear in stocks is because it’s always in your face and accessible, whereas realestate you don’t know the fluctuations unless you consult a evaluation or sell. I believe if you are a person with emotions who’s in stocks. Set up a automated share purchase plan and don’t excessively look at your portfolio. 😃😃
@@samvoulalis205 Really good advice!
Before even watching and hearing your thoughts my opinion is ETFS for beginners ! Individual if you know what youre doing . I personally like individual stocks .
I agree. Starting out with ETFs is really the best way to go if you are new to investing, then slowly adding individual companies to your portfolio. Thanks for watching Dejan!
Agreed althought im not in the market yet, imma do a mix of 30% ETF and the rest stocks
YOu cannot go wrong with stuff like JNJ KO MO O PEP ETC
I've been doing ETFS but just got into individual stock's. Right now I do a 80-20 split of etfs and individual stock's. I might increase it later when I feel more comfortable but ETFs definitely feel safer
That is really a great idea! I think most people would be better off doing this when they first start investing.
ETFs provide more security for sure!
ETFs don't go to zero! You aren't punished as bad with picking the wrong investment as you are with picking individual stocks. Thank you for watching!!
And you can dollar cost average that will give you better returns on the long run
9/10 dividend investors will get better returns by investing in SCHD over 20 years than trying to choose individual dividend companies. Just saying
Very true for most individual investors.
A combination of ETFs and stocks work best for me, somewhere at 80% ETFs plus 20% stocks (and maybe leveraged ETFs and stuff).
With a mixture of market ETFs and sector ETFs, you pretty much guaranteed a market average return.
A few individual holdings allow you to enjoy the stock picking process, and potentially drive your return even higher.
I like the idea of an 80/20 split. That could work very well.
Ive recently changed my strategy quite a bit. I now invest 80% in etfs and 20% in a few forever stocks that i want extra exposure in. Thanks for the video, and great idea on coaching people to help their career. A nearly priceless service, im sure!
Hi Thomas! I think the 80/20 setup is a good idea. Thank you so much for watching!
That's a pretty good play. I'm doing the same with growth ETF's.
This is exactly what I do now too
I personally like ETF's, the true average return is that of the total stock market. I also "currently" enjoy the above average return with growth ETF's. Also I like the idea that ETF's never need to be sold, just collect small divs. I feel like the returns on individual stocks is not worth the headache, research, monitoring etc, if I can just be over leveraged on quality etfs
ETFs are great! I think most people would be better off with ETFs. Thank you so much for watching!!
If you don't know what you're doing or don't have the time or interest go with dividend ETF's. In general though you'll lose out big time on dividend growth compared to having individual shares though. But if you want simplicity, it's the way to go.
Very true!
As i have been going in this journey, feel like the only time you should be hand picking stocks are for new (or evolving old) growth stocks that you feel their upside is not already priced in. These are the companies that can 10-100x your investment, the risk is higher but the chance of gains are worth it. Dividend companies usually wont do this so you are picking an individual stock at a higher risk to beat the average maybe 1-5% - if you are lucky. As others said try it all at smaller amounts so you learn what style suits you best. Roth IRA = REITs. Taxable account = growth stocks and non-REIT nonMLP dividend ETFs
Hey Justin! I tend to agree with you. When it comes to investing for early retirement, having dividend growth stocks can be very powerful in a taxable account.
I perfer investing into invidiual stocks where my beginning of stragedy was embracing ETFs in the sense of using them as guide, ones like MGK, DGRO, FREL etc lookin through top 1-25 holdings of each funds to build my portfolio around under M1 platform making Pie's for real estate, Large-Mip cap growth etc.
(In tht process looking at stock growth over the years, its yield, debt ratio, yearly dividend growth percentages etc)
M1 is great platform to essentially create your own ETF with no expense ratio.
Only sector id keep as ETF is small cap growth given the high volality or even tech etfs.
My only real con with invidiual stocks imo is when time selling, the tax implications of entering every stock sell. (When tht time comes).
As young investor, theres surely mistakes and gettin overwhelmed maybe having too many (above 40 in my taxable currently) but will work down as time goes by.
Better to be invested then not be , at the end of the day.
This is a great comment! Thank you so much for watching!!
One thing I really like is that you can invest into a certain criteria that meets your goals. I also think it's mostly a waiting game if you have an unrealized loss. There aren't really any bag holders in the bigger ETFs.
Exactly! It also makes it a lot easier to buy down with confidence. Imagine doubling down into JCP right before they went bankrupt. It really helps new investors invest where they otherwise might not have.
I still think there are plenty of bad ETFs out there but with some of the top ones it's really splitting hairs. Some may underperform a little but that's about it. I think ETFs are such a competitive price now that it's just hard to beat. It's almost an ego thing not to go with them.
if you don't have a lot of money to invest, you can start with like 50, 100, ... $ per month into a dividend etf. It's important to start. The dividend snowball will be small, but if the hill is long, it WILL grow bigger. And if you do this, within ten years, you'll have grown a decent sum and you can still decide if you want to go on with the ETF or go for individual stock. Truly, this video, is one of the best on this subject!
What's riskier, buying stocks from great companies you know or blindly buying 500 different stocks from companies that you don't know anything about and have no control over... I personally like stocks over ETFs, because of the control it gives me and because I don't get to pay the ETF expense ratio, also because of the high ETF tax where I'm from. But I can see where you're coming from, and I think that if you are happy with market returns and or don't know how to or don't have the time to look into the company's you invest in, buying an ETF might be better.
It is good that I'm the perfect character archetype for an investor. I'm completely non-emotional. I love doing tons of research and understanding everything in depth. I'm patient and can hold a company for a long time. While I had invested into many etfs, I mainly invest into them due to their performance or their discount value. I just love flexibility which picking your own stocks give you.
You are way ahead of the game! If you already know what type of investor you are, you are in a much better position to start and are unlikely to change your approach down the road.
@@DividendGrowthInvesting Only time will tell if I'm going to be successful. I have a lot of promising biotech companies which shows promising research results on ground breaking drugs like cancer curing drugs. Their price is very low and continues to fall, but if they those biotech companies continue their current success, their price can jump rapidly in this decade.
I also have two promising mining companies in Chile. One already done research and preparing excavation. Another only had acquired a lot of promising land. First one is cheap, another is penny stock. If they ever successfully manage to build mining operation from nothing in economic environment which will be extremely bullish towards precious metals producers, penny stock is bound to return my investment in the thousands of percents.
However, only time will tell. These growth stocks in a short period can be very bearish and it is discouraging to see your portfolio down 10% from a get go, but you believe in your own intuition, research and management of a companies in which you invest in. Other than that, I just want to build myself a nice dividend portfolio and live off solely from dividend income. That is my dream.
Same! No emotions here, but lots of research! ;)
So, some feedback. Some companies on which I have done research did amazing. Others did poorly. I managed to underperform while market was ahead and overperform during recent depression.
A lot of my biggest loses were in companies in which I invested out of idea. Like investing into airline company while it was down while waiting its stock recovery. Others, I know their game, but I was fine with it. Like Ichan Enterprises. Others like Biotech companies, I discovered how media pumps up their stock.
All of these loses were minimal as I would only invest symbolically buying one stock. It was to gain experience and I did learned a lot just by passively owning some stocks.
Thanks for the info. I choose ETFs, namely VYM and VYMI for the same reason. When there’s a dip, I get more, when there’s a move up, I get less. I still sleep at night. And I can focus on my life and job and family and hobbies and let someone else run the investment.
Exactly!!
Thoughts on SPHD for dividends?
AK-Money I talk about SPHD in a previous video regarding monthly dividend ETFs. It’s one of the better monthly dividend ETFs. I don’t personally own it though.
I am a new investor documenting my journey.
I am mainly investing in ETF’s really looking to build a strong foundation for dividend income with growth. It’s going to be my retirement that will allow me to maintain or have a higher standard of living. I am happy with the average return of the market. I do own single stocks but is a smaller percentage
iShares Developed Markets Property Yield ETF USD Dist
Vanguard S&P 500 ETF
Vanguard FTSE Developed Europe UCITS ETF (EUR) Distributing
The very cool thing about "average" returns is that historically average returns of the SP 500 has out performed most active investors!
I've been thinking of dividend etfs the past couple of days cause I don't really know how to pick and choose good individual stocks. Thanks for posting this 👍👍👍
Thanks for watching! I think most people would be better off starting with low fee ETFs. I love my ETFs :)
Buying an individual stock is basically saying either that you know more than the market about this stock, or that you hope that something you don't know about the stock will go in your favour. No individual investor knows more about a company than the institutional investors whose trading largely sets the price do. And the price does matter, as the dividend comes out of it on the ex-dividend day, so buying a stock for the dividend still indicates that you believe that the price will at least rise enough to pay the dividend (otherwise you'd come out even or lose money). ETFs fix part of that uneven knowledge relation. You can't out-research the big guys, so you buy the basket. There are always anecdotes like "well if you bought stock A from index B instead of the index fund, you'd have beaten Index B". Sure, but a lot of people also would have bought the many many stocks in the index that dragged the index return down. Putting the spotlight on stock A is a case of 20/20 hindsight. It's better to buy the winners and the losers through an ETF, than risk overpicking the losers.
I roll with a mix. Currently 20 dividend stocks and 2 dividend etfs I believe strongly in. I dont want many more individual stocks. 25-30 stocks is my limit. I do invest in bluechip dividend aristocrats/kings mostly so honestly I dont need to follow up all that much other then buying at or under fair value. The etfs are there incase Im wrong and to get broader exposure.
This is a very passive way to investing and I think most people would benefit from this approach. Sometimes boring is the new sexy :)
ETFs is also good in a Taxable account where the dividends will be low but high enough to give you profits. Low because you dont want all those dividends to increase your tax bracket and taxes.
Exactly!! That is a great call out. This is especially important for younger investors. If done correctly, you can optimize it so the snowball effect really takes off shortly before you retire.
Dividend ETFs are safer and easier but your income will be very inconsistent. Solid individual stocks provide more return and constant dividend growth. There are a lot of safe dividend stocks out there.
I'm like you. I like both individual stocks AND ETF's. As far as market fluctuations, I can sleep well at night with both. The reason for this is that although it's nice to see the portfolio value grow, I invest to grow dividends, not for the current market value of my portfolio. And while dividends may fluctuate, they are much more stable than market prices. That, combined with the fact that my goal is to build passive income for retirement is why almost all of my holdings are in dividend producers - both ETF's and individual stocks. Another way to look at bear markets is that they are a wonderful opportunity to buy more shares AND take advantage of higher yields! Passive investors sleep much better than speculators.
Really great points! I completely agree!!
90% VWRL and 10% FTSE Global Bond Index for me for now. Might create a small individual stock portfolio of 8-10 solid blue chip dividend companies to supplement it 😊 love investing!
Sounds like a great plan!
Motley Fool is trustworthy this helped me turn 10k into 20k in one year. This return required critical thinking proper Judgment. I stop due to mental strain. To avoid the Dopimine train
Thanks for watching!!
I started investing in April im in my mid 30's,most people our age with go with etfs ,but for me im alot more comfortable in investing individual dividend stocks,I make sure I own high quality stocks,if I have a company thats not doing well or hasn't been or cut their dividends,I dont hesitant to get rid of them.Im happy alot of the good quality stocks have been raising their dividends that I own,especially when the market has been taking a hit since I started,which puts me a ease just gonna keep focused on staying in and constantly investing more in the market,its the only way your going to enjoy the fruits of labor in the future.great video thanks for sharing.
You definitely started investing at a wild time, but your timing couldn't have been better with the market crashing and getting a lot better valuations. Thank you for watching!!
Single stocks are scary
I own 3 ETF's, the rest are individual stocks and 1 REIT 🤞
No fluff. No bells and whistles. I like it.
What’s the 3 etf’s and reit u invested in if u don’t mind ?
@@salg95 I sold one ETF. I own SCHD and VYM. My REIT is O.
@@user-bm6wu9zw9m why not SCHD, VNQ, VNQI, SCHY ? Would improve diversification of the portfolio.
As someone who made alot of mistakes when he first started, shorting companies using option trading and losing $1,000. I can attest that day trading is the worst thing to do. The best is to not focus on technical analysis but qualitative analysis (fundamentals).
I used to hate when companies went red. Now I am hoping for corrections for the great prices.
Great comment! I couldn't agree more! I just wish that it was only $1,000 that I lost back in the day :/
Red days are the best days!!
@@DividendGrowthInvesting In long-term equity investing, green just means unrealized gains where as red means opportunity!
A good complicated enough topic that warrants investigation, but I am disappointed that you did not mention satellite investing , where ETF's make up the greater % of investment, but also include some individual stocks for diversification, taking advantage of personal knowledge of some sector or business area, social support, etc. Good points re volatility, expense ratios, gain potential, etc. Like that you have VGT O, DLR, JNJ. Future topics might include: 3 fund approach
and you're watchign this channel why? seems you know what you're doing ... shoot shoot.
@@ewlinitis me = much to learn. its a community
So happy that you are here, Karl!
I don’t have M1, but the way it’s arranged with the PIE’s, it’s basically your very own custom made ETF.
Personally i have 2 ETF’s (VOO and VDE) and the 13 individual companies i am long in (AAPL, MSFT, DIS, T, FUN, CCL, GIS, KO, LMT, UNP, MCD, SNE, NVDA) but the 2 ETF’s account right now for 1/3rd of my portfolio, and the VOO is a kind of base/safety net.
Exactly!!! When I first started building out my PIE, I was thinking the exact same thing!
Yo, love the video. Had a question for you though: Do you think getting SA premium or another analysis sites premium is a good idea? or do you avoid it?
I personally think that SA offers enough with their free services that you don't necessarily need the premium version. Websites like these tend to change their services over time and reduce free functionality. In the future if they were to restrict basic services and charge a fee, I would consider paying for it - but for now I am fully satisfied with the free services.
Could you say buying all your individual stocks is like making your own etf? And could it also maximize your gains by not having to pay a fee to own the etf?
Exactly!
It depends on retirement income and long-term growth. I own a combination of dividend ETFs as well as dividend paying stocks in my portfolios.
Really great call out, Jacob! I don't go into detail about the differences in different account types, but this also plays a role! When it comes to retirement accounts, I only hold low fee index funds.
Thank you for your very informative and clear explanation on ETF's.I am learning a lot.I recently bought my first ETF. I am new with investing so I think investing in an ETF is the right thing for me now. I did not stress in march/April either when the market too =k a downturn. The only thing I did not do was to invest more into the market. That was my learning curve!!
I am so glad you enjoyed the video!! haha trust me I think it was a learning curve for everyone!
I have 24 large cap individual stocks in my portfolio. I might add a small cap ETF at some point.
Thank you!! I really enjoyed this video! Is there a way to compare the actual dividends received from a $10k etf vs $10k individual stocks?
Also can you do a spotlight on clm or crf or hndl to explain how their dividend works? I think they are returning principle but can't quite understand it
Thanks for watching!! You can compare the historical performance of ETFs and individual stocks from these sites:
dqydj.com/etf-return-calculator/
dqydj.com/stock-return-calculator/
Great video ! I probably have 20 individual stocks with 7 of them being utilities and 1 ETF ( VPU ) . I’m very bullish on utilities because of their wide economic moats, steady income , everybody needs it and etc.... I know that they don’t grow much , but that’s OK with me because I have no time horizon and I’m establishing generational wealth !
Thank you!! Really great point! I also like the utility sector (one of the best recession proof sectors).
Great video Jake!! Thanks for your content 💸
Thank you so much Justin!!
Thanks for this. What are your thoughts on adding foreign stocks? I've watched some other DGI vids and I came across some in investing in dividend stocks outside of U.S. as a way of diversifying. Do you have any foreign stocks and or plan in buying any? If so, any recommendations on which ones to buy?
Great question! I have shared this in previous videos, but I haven't made an entire video dedicated to this topic. In my taxable account I don't own any international stocks. The main reason for this is the taxes that come with investing in international companies. For example, if there was not a 35% international dividend tax on Nestle, I would invest into Nestle over Hersheys. For this reason, I prefer to invest in Hersheys. I do own VXUS in my Roth IRA, but this only makes a small percentage of my overall portfolio. I hope this helps!
@@DividendGrowthInvesting Thanks so much! Yes, very good point
Thank u for suggesting this video in other comment. Great feedback and insight to help me move in right direction for me. 😀
So glad it was helpful!
I may have missed it - did you mention what percentage of your investment is in individual stocks vs ETF ( dividend bearing of course)? Thanks. You are doing a wonderful service with this channel.
Hi Srini! My overall portfolio is weighted 60% in ETFs and 40% in individual stocks. Thank you so much for watching!
Dividend Growth Investing Thank you!
can you make a video on what happens if an etf closes its doors?
If you don't sell beforehand, they liquidate your shares at market value and give you the cash.
I came across your RUclips channel recently and have been watching a few videos. You seem very knowledgeable and give out great content. I have a few questions:
1. Why is your Real Estate pie separate from your stock pie? I know it’s all preference and doesn’t really matter, but why didn’t you just make a Real Estate slice in your Cash Flow pie?
2. You have 80 holdings in your Cash Flow pie and 32 holding in your Real Estate pie. In addition, you have multiple ETF’s in those pies. Do you think that is too diversified? With that many holdings, it is very tough to stay updated on all of it.
I would love to hear your answers. Thanks and keep up the good work.
- Allan
Hey Allan! Great questions! Regarding the first question, I have my real estate pie in a separate account for two reasons. The first reason is at the time when I was setting up my portfolio, I originally had over 100 holdings (combined). I decided to break this up and have my real estate holdings in a different account within M1. The second reason reason is I view my real estate portfolio as a side project and not something that I want to aggressively fund at the moment. In regards to your second question, I actually tend to agree with you. I have shared that I don't recommend that everyone does this. I would not have 80 holdings if it were not for M1 Finance. With M1 it makes it very easy to set your portfolio up with this type of strategy. I also have a vanguard portfolio that I've shared in a recent video and that portfolio only has 10 holdings. Despite all of this, I actually don't think that having 80 holdings is over diversified (I wouldn't recommend it for everyone though). In a recent video where I talk about my goal of creating a $2 million portfolio, I share in more detail about this. At the end of the day, I don't recommend everyone set up their portfolio this way. For example, I helped my wife set up her portfolio and she only has 22 holdings (including ETFs). I hope this helps!
@@DividendGrowthInvesting I watched the video about your $2M goal. So the main reason you have 80 holdings is to have a more consistent pay out payout schedule? Do you have an action plan on if one of your holdings decide to cut their dividend or suspend it? For example Disney was a small part of your holding and they suspended their dividend temporarily.
@@amjr2119 Another great question! The 80 holdings are a way to diversify and to spread out my dividend payouts. I do not recommend this for everyone. Before using M1, I would have only had around 40-50 individual holdings. M1 makes it incredibly easy to hold more holdings. I follow the suredividend 8 rules of dividend investing. Number 7 talks about when a company cuts their dividend. I have held onto DIS despite them suspending their dividend this year. I do not plan to sell DIS anytime soon; however, DIS only makes a very small percentage of my portfolio.
www.suredividend.com/8-rules-dividend-investing/
Thank you, great job! Which dividend ETF do you own in your personal accounts?
Thanks for watching!! I own VYM, SCHD, DGRO, VGT, VFH in my main dividend growth portfolio.
@@DividendGrowthInvesting what are your thoughts on SCHY ?
Great video. I have only recently started my Dividend portfolio, VYM was my first choice, SCHD my second, by I am not sure if I will add more ETF's. I am currently considering just funding VYM, simple, one and done.
Could you elaborate on why you have 3 different Dividend ETF's? Analyzing them, 89% of SCHD's holdings are in VYM. And about 49% of DGRO's are in VYM. If the overlap is big, why not go with just one? At least that's been my reasoning so far.
You are correct that there is overlap. If you look at the % of each holding though, you will see that there is not equal distribution in each. Having 0.01% is not considered really overlap in my opinion. All three of these ETFs screen companies differently and have a different methodology for adding companies. DGRO is more focused on growth. If you look at the sector weighting, DGRO is more skewed towards growth and has more exposure to technology.
Love the new website man! Looks great!
Thank you so much!!! It was a lot of fun putting it together. I hope you have a great week! I will be going to OKC in a few weeks to visit my brother.
@@DividendGrowthInvesting you have a great week as well! Awesome! If you want to drop by and grab lunch or something let me know!
how about QYLD is it worth it?
I personally don't invest into it, but I hear people really like it.
Very informative 👍
Thanks for watching!!
This was a really good discussion comparing the two!
Thank you so much for watching!!
Hey, I'm a little late to the party. I work at the moment as a software dev and I would like to ask from your experience if there is a huge pay check between someone that does sales and one that does qa / backend for example?
thanks!
Awesome video, I learned a different way of thinking from this
Hey Enrique! I'm so glad that the video was helpful for you! Thanks for watching!
Jake, I am not looking to do software sales, but could I book time with you to discuss some investment ideas I have for my own personal scenario? I know you are not a professional financial advisor nor I am looking for you to tell me what to invest in, it would be more to just have a conversation and bounce some ideas to hear what you think.
I want to be overly careful when it comes to exchanging investment advice for money (which I am not doing). I'd love to chat with you and hear about your ideas and I can share some ideas that are working for me and why I do certain things with my portfolio.
I totally understand, I would consider it simply an exchange for your time to have a conversation, do you have instagram or another way for me to DM you?
@@klausloewy4255 that sounds good. Shoot me an email divgrowthinvesting@gmail.com
Both
i moved from etfs to individual stocks
Individual stocks can offer a lot of upside potential!
@@DividendGrowthInvesting I'm up 28% in a 1000$ investment Reality incomeis my top investment on stash and I got at&t building up some shares
ETFs are cool if you’re a passive investor. I just don’t want to bother doing much thinking or research
That is a big advantage of ETFs!
Over diversified amigo, you just need 15-20 stocks.. add a few etfs and index funds, not a bunch of them, less than 5.. compound those dividends faster!
the power of compounding is not impacted by the number of stocks you hold. I think this depends on the person. Not everyone will want to have that many stocks and some people will want to have more. Depends on the person.
I invest in individual stock and one ETF - SPHD. What are your thoughts on that one? I'm trying to build it up to the point where the monthly dividends buy a new share of itself each month, and then I'll probably turn my investing back to individual stocks while it just builds itself up each month.
Hi Chris! I think SPHD is one of the better monthly dividend ETFs out there. The expense ratio is low and the holdings are in most cases well established companies. I shared a video on monthly dividend payers in a previous video where I talk a little about SPHD. The cool thing about dividend investing is it doesn't have to be one or the other. You can always adjust your %s as time goes on. Thank you for watching!!
Great Video!
Thank you so much for watching!!
21 stocks, mostly individual. One ETF and one individual paying enough dividends to buy another whole share every time it pays. Only 19 more to go, this is going to take years.
21 stocks is a very manageable amount! I still think even if it takes a long time, it is so great to have this goal!
Now own enough of 3 stocks to buy themselves another whole share with the dividends.
How many individuals stocks do you have?
I have 35 companies and 5 ETFs in my portfolio.
@@DividendGrowthInvesting thanks, i'm watching from Brazil
i love vym but i want to pair it with another dividend etf something in the 2-3 percent yeild range what would be a couple you would recommend
Tyson E SCHD and DGRO are in my portfolio and are great ETFs with a higher starting yield.
Dividend Growth Investing thanks I will do some research on those
SCHD is actually beating vym
David Guerra yeah I did research I’m going to be putting around half in vym and other half in schd I’m also thinking about dgro but I kind of want it to be only 2 etfs in my portfolio what would you reccomend
SCHD 🤑
Signed up with an M1 account using your link. Hey I'm in Georgetown BTW.
Thank you so much Dave! haha What a small world.. Cheers from South Austin!
VYM has lost so much this year... why do you invest with that one?
Girthzilla VYM is down compared to the SP500 because it has less sector exposure to technology. VYM has more exposure to financials which are down in 2020.
@@DividendGrowthInvesting I am 53 years old and plan to retire at 65, what ratios and Index funds would you recommend? I prefer to keep everything with Vanguard.
That’s when you go with SCHD and diversify .
@@crowderscustomizing Assuming your goal is to live off the dividends and not sell shares, I personally would focus on current yield. With a 12 year time horizon, you want to look for companies that have a higher starting yield in my opinion. There are other factors that come into play, for example in which account your are investing (e.g. Roth IRA vs taxable account). My favorite high yielding vanguard index funds for current income are: VYM, VNQ, VPU, VDC.
@@DividendGrowthInvesting TYVM
Great vid! This sounds like a really silly question, but does the dividend yield of a dividend growth etf actually increase over time? I’m assuming once a company stops growing their dividend then they’re taken out of the etf and replaced with a smaller company that pays a smaller dividend that will grow over time, so does this mean the yield generally stays pretty flat?
Hey Robin! Yes, the dividend can increase quite significantly with ETFs just like with individual companies. This depends on the ETF and the holdings in the ETF. The process in which the ETF screens companies really depends on how quickly the yield will grow.
@@DividendGrowthInvesting thanks for getting back to me! I might send over my portfolio soon.
13k debt left. Slow that down and begin to invest?
Hey Nick! It depends on two things - the first what type of debt is it. Is it something that is generating you income (e.g. an asset that appreciates over time) or is it something that costs you money (e.g. a depreciating asset). The second is the interest rate. I personally feel that anything over a 4% interest rate should be paid off first as soon as possible.
Student loans- yo its so bad ass you take the time to respond to people. How can I support you further- just found your RUclips recently
@@nicknick6127 lol thanks for the support! Just watching my videos and commenting/liking is the best way you can support! Thank you Nick!
@@DividendGrowthInvesting Roger that!
Nice video! Just subscribed, I’ll be following along on your dividend journey. I’m looking to start more dividend investing soon.
Thanks for subbing and watching!!
• Hi, great video! When I think of passive investing, I think of set it and forget it. It doesn’t matter if it’s a red or green day for the share price, you buy it regardless. So when people invest in a cyclical company like Exxon Mobile ONLY for the dividend income, should they be concerned about when to buy it, or can they set it and forget it and buy it at whatever price its at, so long as their ONLY in it for the dividend income? Should I be concerned about the share price and paper losses of my principle while passively collecting the dividends? Exxon is a dividend aristocrat which means its dividend is generally considered safe. If not Exxon Mobile, are there any individual dividend paying companies that I can passively set it and forget it, like maybe 3M?
Time is the most valuable currency. I will sacrifice a couple % of return annually to spend that time with loved ones.
Hey Jake, I have been wondering about one frequent statement you and other dividend investors keep repeating.
Everyone always recommends investing in low yielding growth companies such as MSFT or Visa "because you have time for that dividend to grow". My question is why you expect this strategy to outpace investing in things like O or KO in terms of cash flow. Do you mean that it's worth it because you'll have a higher yield on cost many years down the road? Is it because the portforlio value will likely be higher in the end? You will miss out on much cash flow during these growth years and I'm wondering if you will ever catch up as it is unlikely that the yield will far exceed the established dividend companies for the same reason their dividends aren't higher.
I hope I phrased my question in an understandable way, please ask for clarification if it's unclear!
You phrased it perfectly! You actually answered your own question. When it comes to cash flow, time and growth % plays a very important role. For example, investing in O or KO is a very good strategy if you plan to need the cash flow (dividends) sooner. When looking at MSFT and V, you will need a much longer time frame to generate the same cash flow (assuming the same amount is invested in both scenarios). It would take significantly longer (e.g. 20 or even 30 years) for you to reap the same cash flow levels by investing in MSFT or V compared to KO or O. Taxes also play a role here. You will pay more taxes with KO and O (because you are generating more income/dividends each year). If you didn't want to ever sell MSFT or V, it will just take you much longer. Determining which is better for you really depends on your time horizon. If you plan to tap into your dividends within 10 years, then KO and O are much better for this goal than MSFT and V. I hope this helps!
@@DividendGrowthInvesting Thank you for the reply.
I'm 24 and just started working my first real engineering job a month back. I've budgeted to invest 50% of my post-tax income and will hold that level for at least 5 years and then step it down to 40%. My goal is to be able to (but wont) retire at 40 years old, i.e. my portfolio should be able to support my lifestyle completely at that point. So I should probably mix these types of dividend stocks in my portfolio?
Key for investing in individual stocks is diversification.Very important not to put your eggs in one basket.Common beginner mistake.
Exactly!!
I like the diversification of ETFs, since it’s not realistic for me as an individual investor to buy every single stock I’m tempted to buy. Because trust me it’s a lot! Haha...BUT with that said I like saying I hold McDonald’s every time I’m chilling in the drive through!😂
lol I am the exact same way!!! Whenever my wife tells me to turn off the light and says I don't own the power company, I always respond with "well.. I do own some of it."
My point as well! Glad to hear I’m not alone 😂
Very few professional financial people can pick stocks for the long term.
“Warren Buffet”
Is it legal to sell your view on stocks etc when you are not licensed 🤔 I understand you put the disclaimer but isn't the license for allowing you to sell your service in the field.
Great question! You are exactly right that if you exchange money for financial advice, the person is required to be licensed. I am not offering financial advice on investments during these calls.
Good! I would hate to see you face fines on your offering 😎
Jake from State Farm
Just a regular guy sitting here in khakis lol
You are telling me he is not Jonah Hill?
:D
If you have more then 20 stocks it doesn’t make practical sense . You are not a mutual fund or full time money manger following companies.
That is the great thing about dividend investing. Not everyone has the same goals or priorities. I think most people would be better of holding a small handful of high quality ETFs.
👏
Thanks for watching!!
second! :)
Thank you so much for watching!!
First 😂
Representing from the UK!!! Thank you so much for the support!
It's 21.50 here and I love learning from you and your channel, I honestly take notes 👍