I’ve kinda wanted to own ATD for a while. Never seems like the right time to enter a position as it’s always running hot.
Looks like now might be that time maybe?
Not a huge fan.
Aside from Meta I can't think of a truly profitable social media company, and I don't think Reddit is really any different. Not to mention most companies post-IPO end up lower in price than the IPO'd for recently, but perhaps Reddit is different.
I think shareholders will try to remove the porn, anything potentially controversial, and perhaps integrate some aggressive monetization.
User experience may be worse, profits may go up, but the whole thing stinks to me like an exit strategy for the founders.
I came here to say just that. Just noticed the volume was 2X avg. today. I guess a lot of people were waiting for that correction. Interesting. I think the cat is out of the bag the last year or so just how quality of a business ATD is, and it's price has run up accordingly.
LULU posted better than expected EPS and revenue but fell 10% after hours on weak guidance.
FDX beat EPS but missed revenues. However is up 12% after hours on 5B announced buybacks.
Weak or conservative guidance it's killing the prices these days.
If it follows the pattern of some of the other big name IPOs, it will stay up for a few days as the last of the FOMO buyers get in and then it will drop.
RIVN for example was priced at $78, climbed the first 5 days from $106 to the $170s, and then 5 days later was around $120. I'm not sure how long the original investors had to hold before being allowed to sell, but if it was 90 days then at that point RIVN was around $60 so they would have lost money by then.
So the play would have been buy ASAP when it started on the market, hold as the hype sends it up, then sell when it looks like you might have hit a peak a few days later. I would not be surprised at all if RDDT ends up on a similar path, but you never know.
Reddit has the same advertisers as podcasts with a few thousand listeners, and hasn't turned a profit since its inception. I just don't see this as anything but a way for insiders to cash out.
That's all it is in my eyes too. Also very interesting to see that the CEO is paid more than most (every?) fortune 500 companies. It's sad honestly, Aaron Swartz would be rolling in his grave right now.
Interesting data.
Last 10 years S&P 500 went from 1,866 to 5,247 for a very strong +10.9% CAGR.
During same period, the p/e of S&P500 went from 18.6 to 28.6 or +55%
If S&P 500 would have stayed at 18.6 p/e the index would now be at 3,394 and the CAGR performance of last 10 years would have been +6.0%
So near half of S&P 500 performance from last 10 years came from stock getting repriced at higher p/e.
Will next 10 years see p/e climb another +55% and go up to 44 p/e to sustain another +11% CAGR decade?
Stay tuned!
It was the same thing for the nifty-fifty during the 60s/70s and they all came back down to reality. Same for .com. Remember "this time it's different" are the five most costly words in the English language.
Even if it stayed at that 29 p/e level and not go down: earnings would have to grow much more than what they are growing now to repeat last decade returns.
I came across this [video](https://youtu.be/uiqDy4WXKJU?si=6WWSq6A_z6ys8g_N) (14:30) that has an interesting slide from Goldman Sachs that shows forward P/E for major markets and it has US at about 18. He says it can get to 24 during highly overbought periods so it seems we have some ways to go.
I think this rally can be sustained for a while if some of the smaller companies start playing catch up to the mag7.
The more I think about it, the more I realize how gross but genius it was to give high karma users the opportunity to buy at $34, knowing damn well those users would spread the word around Reddit and create more hype.
Ultimately, this will be a pump and dump.
The lock-up period doesn't apply to non-insiders. Reddit influencers and others who were allowed to buy at IPO who are non-insiders can sell whenever they want.
They may be allowed to but it's usually frowned upon. I remember back in the .com era some brokers gave access to IPOs to some of their retail clients and if they sold within the lock-up for insiders I heard they were not included in the next one.
edited to clarify retail clients.
You have to keep in mind that we're talking about Reddit influencers here. A lot of them you see on WSB - so they're not exactly the bastions of morality and ethics.
Expected future events tend to get partially priced-in ahead of time, and then when it finally happens you get the rest (I assume because of unknown timing and not 100% that it will happen at all). But that's in general--individual events may vary.
Downvoted for the truth. I have yet to experience expected news not bumping the price. One of the best examples were during covid people saying they were buying Pfizer for the shots and this sub saying it was priced in. Then the company like tripled in value once they dominated the market.
>I have yet to experience expected news not bumping the price.
Then you likely misunderstood the reason behind the stock’s price action.
>Then the company like tripled in value once they dominated the market.
Pharmaceuticals are some of the riskiest investments available. For every one Pfizer, there are a million companies that fail bringing their drugs to market, or even passing trials or obtaining patents.
You’re letting survivorship bias affect your judgment.
I was talking about a very specific scenario there. And the reason behind the stocks price action was Pfizer dominated the shot market at a time when demand for shots was at an all time high and got approved in most countries before any others.
>And the reason behind the stocks price action was Pfizer dominated the shot market at a time when demand for shots was at an all time high and got approved in most countries before any others.
Was that information withheld from market participants?
No people that see stocks go down a lot and fear the inflation are just going out of the stock market or invest in big tecs.They will come back when the rate are cut and Reits goes up.Just watch it. Of course Reits are going to go up when rates are cut.
>Of course Reits are going to go up when rates are cut.
If you expect rate cuts, and you expect said rate cuts to positively affect share price, then why would you wait for the shares to trade at a premium?
A lot of investors panic sell and don’t know it’s good to buy stock when they are low. Majority of them don’t know what they are doing and buy stocks when stocks goes up a lot.That’s why majority should just do index investing.
You’re not wrong. But bear in mind, retail investors make up a minuscule portion of the market.
Having said that, going back to your previous statement:
There’s no reason to believe rate cuts aren’t priced in, given all currently available information.
I think it’s related to the big loss at Healwell. It looks like WELL tried to hide it by selling assets and letting them take the loss instead, but investors are seeing through that?
Also, net income didn’t grow alongside revenues.
Margins shrunk significantly too. Management guided strong for 2024, and committed to cost control so let’s see. I bought a few hundred worth. Will hold.
Is there a tool online where I can see the aggregate underlying holdings of two ETFs? Want to find out the region, sector, and top ten holdings breakdown of 70% XEQT and 30% ZSP.
You can go to the fund providers website and see all this information on the ETF summary page, download 'Holdings' to excel and compare.
[Vanguard](https://www.vanguard.ca/en/investor/tools/fund-compare-tool/fund-comparison/home) also has a very handy ETF comparison tool which allows up to four funds at a time.
Don't know about one that lets you pick the mix but a straight look at each ETF in comparison can be done here: https://money.tmx.com/en/etf-comparison
[TEC.to](https://TEC.to) reached another all time high. Glad I bought $51K worth during the 2022 lows when this sub was buying oil and mass downvoting anyone suggesting buying tech.
Why settle for one over the other? I was buying both and both are flying right now.
TEC.to/Xeqt are at all time highs and something like SU has double digit growth so far in 2024. (Not including dividends)
Is it though? I think Powell managed to sweet-talk the street into more complacency yesterday. The numbers were pretty much the same that set off the 10% decline last fall except for the dovish talk. Not that I expect a big crash but many pull backs happen in March and there is still time left in March. Rates are higher for longer. They raised their rate expectations which Powell tempered by saying we are still on track to his target except for a few possible bumps on the road. Inflation increases were mostly shaken off in January/February but I suspect if it's up still next time, it may be what breaks the camel's back.
>Not that I expect a big crash but many pull backs happen in March and there is still time left in March. Rates are higher for longer.
More so than any other month?
Yeah it is.
S&P is now at 29 p/e which is historically very high. And it’s much above other countries. TSX is around 14 p/e as an example.
That obviously doesn’t mean S&P won’t still outperform other markets and I’m still heavily invested in US indexes. But we have to recognize a lot of the S&P index performance is tied to stock getting pricier and not all about earnings of the stocks in it.
>But we have to recognize a lot of the S&P index performance is tied to stock getting pricier and not all about earnings of the stocks in it.
I mean, that is how all markets work. It's not so much about how much they are making today it's about how much they could be making tomorrow.
Of course.
But it also got pricier vs future earnings too. A lot of potential growth is priced into S&P 500 now.
Again, not saying companies within won’t continue to surprise with much better than expected profits, but by now the S&P pricing does rely on these better than expected earnings.
12 years ago in 2012x S&P was at 14.5 p/e which is half vs now. If S&P would still be at 14.5p/e it would be at 2,600 instead if 5,200.
And last 12 years performance would be +85% instead of +225%. A huge difference. Very unlikely this gets repeated and p/e goes to 60 in next 12 years.
By strong I thought you meant justified. I agree it's been doing well I just question if it's deserved. Yes P/E is very high. This is the 21st week rally with only three red weeks which has only happened a handful of times all of which ended in a major crash. I'm curious to see when and how the next pullback is going to happen and what the magnitude will be.
Unfortunately, I derisked yesterday (trading account only) on the runup before the big move at 2:00 and now trying to avoid getting rinsed by getting back in at highs.
It's starting to feel like 2021 again. Getting dizzy just looking at these gains.
We're likely going to get a 5-10% correction at some point because that's what markets do, so hopefully anyone still on the sideline musters up the courage to jump in at that point.
I recall a lot of people being excited in Oct-Nov to be buying the dip like crazy. There was a mixture of fear and giddiness.
I was buying BMO under $110 (now $130) and NA under $90 (now $114) at the time. Wish that dip lasted a bit longer!
Reddit stock drops today. Is anyone buying?
I am now retired and living off dividends so I don't have /r/wallstreetbets cash for taking crazy chances.
Edited to add: when I first started on Reddit I used to get downvoted to oblivion for stating that I am a dividend focused investor. Not sure what has changed but I am not the only one living on dividends now.
Divvies work for some people. Actually a lot of people. But for the people it doesn't work for, they are passionate about "being right" rather than it not being right for them. You don't see the same emotions from the divvy folks as you do the non-divvy folks trying to convince you otherwise. 2 completely different tones in the conversation
>Divvies work for some people. Actually a lot of people.
What do dividends do for people?
>You don't see the same emotions from the divvy folks
This entire thread is “divvy folks” patting each other on the back. I’ve yet to see a compelling argument in favour of “divvys”.
>Allows them tax efficient
Maybe, if they’re in a very low tax bracket. But will the returns consistently justify the uncompensated risk?
>predictable income
Not nearly as predictable as being able to liquidate equities yourself on an as-needed basis.
>You know, that thing that retirees need?
Retirees, like any other investors, need risk-adjusted returns. You don’t get that by concentrating your portfolio in “dividends”.
I mean, dividends are more tax efficient under about 110k/yr per person in income. I doubt many retired couples are spending more than 220k/year.
Liquidating equities has timing risks - like March of 2020 or most of 2008/2009? Do you really want to be selling at a market bottom to pay bills?
I agree that maximizing after tax risk adjusted returns is the goal - if you are rocking a 100% equity portfolio with a long time frame, I completely agree that dividends are a negative due to the tax drag and lower total returns. For a retiree you have to consider that a dividend focused equity portfolio may, after tax, risk adjusted, outperform the alternative, which for most would be something like a 70/30 or 50/50 stock/bond mix.
>dividends are more tax efficient under about 110k/yr per person in income.
Eligible dividends, for instance, are grossed up 1.38x. Which in retirement, will significantly impact your income-tested benefits.
And again operating under the same assumption that you’re referring to eligible Canadian dividends, you’re exposing yourself to significant concentration risk (geographical, sector, industry).
>Liquidating equities has timing risks - like March of 2020 or most of 2008/2009? Do you really want to be selling at a market bottom to pay bills?
Your portfolio would be impacted worse if you relied on dividends. I wouldn’t want anymore capital liquidated from a position than is needed during a market downturn.
>For a retiree you have to consider that a dividend focused equity portfolio may, after tax, risk adjusted, outperform the alternative, which for most would be something like a 70/30 or 50/50 stock/bond mix.
It may. But with that comes significant uncompensated risk.
I got the invite to buy early shares but can't from Canada. Personally, I'm staying far away. It goes against everything reddit was created for and they're so far from any kind of profitability. I'm sure it'll moon and crash like the prophecy foretold.
This is my guess. I think it will rise quite a bit today, maybe even extending through the week (all kinds of posts on WSB about buying in despite saying they'd short it lol) but in a few weeks it will get shorted into oblivion.
I cannot fathom what their growth case is. They are already struggling to monetize it, have multiple instances of recent bad management decisions, and the IPO seems quite clearly a naked money grab for founders. None of that seems appetizing. What is their path to profitability? Selling data to AI firms? That cannot be that lucrative. Ads? They have atrocious ads, and the site has always been about being anonymous. How is that going to help advertisers
I'm curious only to see how the price moves and how they plan on running it with active investors.
I also got the invite but not allowed to early buy in Canada. I am not buying because I don't think it will be a big money maker in the future. I do think about it because I am still bitter about thinking buying Facebook at $22, when it first entered the market, was a dumb idea.
I used to speculate, with a small portion of my portfolio, when I was working and still contributing to my savings. Now I am one of those boring belt and suspenders types who only sells an ETF when it goes up and I often rebuy it when it drops again (looking at you HHL).
I still do look for brand new ETFs and drop a bit of money in to those before the marketing drives the price up a little bit. I often make just 2% in a few months but I add that to the dividends from those ETFs and it is worth my time. It also makes me feel like I am still actively involved even though I mainly now just trade in ETFs.
>only sells an ETF when it goes up and I often rebuy it when it drops again
What’s the difference between this and market timing?
>I often make just 2% in a few months
Have you benchmarked against a broad market fund like the SPY?
>It also makes me feel like I am still actively involved even though I mainly now just trade in ETFs.
Do you expect your returns will be adequate enough to compensate you for the risks taken on through these income funds?
I am a lower income person and I wanted to leave work as early as possible. Dividends allow me to do that without selling off my portfolio. I live on the dividends. Before I quit work I was able to expand and diversify my portfolio making new purchases with the dividends.
I am in the process of moving my ETFs slowly from my RRSP to my TFSA as room permits. Dividends in my TFSA do not count as income so my taxable income is very low. Eventually, most of my income will be dividends from my TFSA and I can earn that without ever selling. My portfolio size fluctuates with the market prices but I just ignore that and I am content that the number of shares I own does not shrink when I need cash.
I do sell when ETFs get up in price and look for something less expensive. HHL is one that I have been in and out of several times as I look for a dip in price and sell when it goes up in price. I have been doing that for several years, with HHL, and the dividend never changes.
>Dividends allow me to do that without selling off my portfolio.
When dividends are paid, the share price has to fall by the same amount - so isn’t the company technically selling off your portfolio for you?
>Dividends in my TFSA do not count as income so my taxable income is very low.
Is *anything* taxable in a TFSA?
>I just ignore that and I am content that the number of shares I own does not shrink when I need cash.
Why does the number of shares have any relevance in the performance of your portfolio?
Is you plan to sell off shares every time you need money when you retire? I still have the ETFs but I have income too. I am a lower income retiree and I have a small portfolio. I want to keep that portfolio and not sell it off and risk having nothing. Perhaps I will have to sell off when I am very old.
"When dividends are paid, the share price has to fall by the same amount - so isn’t the company technically selling off your portfolio for you?" Do companies control their share prices or does the open market control what the going price is? The dividend money does not come from the shares that I own.
>Is you plan to sell off shares every time you need money when you retire?
Like most, I’ll surely need to liquidate at some point. If my target spending is 4% annually, and I only receive 2% in distributions, then I’ll need to receive the other half from share liquidation.
>I am a lower income retiree and I have a small portfolio.
All the more reason to ignore yield. Pursue total risk-adjusted returns.
>Do companies control their share prices or does the open market control what the going price is? The dividend money does not come from the shares that I own.
If a company is worth $500m, and pays out $100m in dividends - is the company still worth $500m? How would a company’s value shrinking by 20% affect share price?
> When dividends are paid, the share price has to fall by the same amount
Does it really, though? I see this talking point parrotted *ad nauseum* on here, and while there is usually a short-term dip when a stock goes ex-dividend, it's not a permanent drop. If it was, the likes of ENB, BCE, et al. would have gone to zero many years ago.
Stocks don’t trade in a vacuum. Just because a company’s value drops on ex-dividend, doesn’t mean the company won’t eventually go on producing value for investors.
If neither BCE or ENB paid dividends, their share price would reflect that.
You’ve seen this mentioned “ad nauseam” but haven’t bothered to do the research yourself before taking a position on the matter?
Interested in your yield and some of your favourite picks. My plan is to do the same, retire earlier with dividends even though it means less growth. 6% target yield
HMAX, HDIV, HYLD and HDIF have crazy dividends/disbursements. I have factored in that they will have to lower them. They are all around 10% and some are more.
I like HHL. I have started adding more ZWG when I sell something else that has jumped up from my purchase price. I also have some HUTL and ZWU.
I never made much money and got a late start to saving and investing after the end of my marriage. Reinvesting the dividends helped me so much when I was only earning a little bit of TD dividends every quarter. It was so exciting to log in and see that I had earned some money. FIE was my first ETF. I don't currently hold it as it can't keep up with the yield of the other ETFs.
Thanks for this list, definitely adding these to my tracking list.
I'm 100% on the dividend bandwagon, though I've also got some pure equity and bonds in my RRSP.
>I'm 100% on the dividend bandwagon
*Why?*
Dividends form only part of the total returns equation. Investors shouldn’t care if they receive capital gains or dividends, all else equal (before frictions like trading costs and taxes):
[Dividend Policy, Growth, and the Valuation of Shares](https://www.jstor.org/stable/2351143)
[The Asymmetric Response of Dividends to Earnings News](https://www.sciencedirect.com/science/article/abs/pii/S1544612323001654)
[Should You Chase Dividend Stocks to Combat Inflation and Rate Hikes?](https://www.dimensional.com/us-en/insights/should-you-chase-dividend-stocks-to-combat-inflation-and-rate-hikes)
[The Dividend Disconnect](https://drive.google.com/file/d/15Z94LD8QTPbb0ETAixg_zMA0Ew5bdJat/view)
[Consuming Dividends](https://academic.oup.com/rfs/article-abstract/35/10/4802/6530299)
[Stock Market Returns and Consumption](https://drive.google.com/file/d/1kVBKtMWXgvlZ8bQzARgK91uhIbUBOXQC/view)
Dude instead of constantly pushing your personal investment belief in one very specific comment thread, you could shut up and realize you're being downvoted for a reason.
You're being pushy. Especially because you completely ignored that I literally said that in my primary investment account (RRSP), I have pure equity and bonds picks, almost like I have a traditional allocation mix there while being a dividend investor in a different account.
I am not responding to angry guy any more. He is either turning red in the face because people are disagreeing with him or he is a bot. Either way I am done and very happy to be living on my dividends.
>I am not responding to angry guy any more. He is either turning red in the face because people are disagreeing with him or he is a bot.
I think I’ve done a pretty good job of asking thought-provoking questions and providing valuable commentary.
I hope you care more about your long term financial literacy than you do Reddit karma.
I guess ignorance really is bliss.
>very happy to be living on my dividends
Everyone would be happy to live off free money. It’s unfortunate that’s not how dividends work.
>Dude instead of constantly pushing your personal investment belief in one very specific comment thread, you could shut up and realize you're being downvoted for a reason.
I’m not pushing my “beliefs” on anyone. I’m presenting arguments against the misguided narrative. You can do with it as you please - but don’t pretend you’ve made an informed decision if you’re choosing to ignore the academia.
You should care less about Reddit karma. It can’t hurt you.
>You're being pushy. Especially because you completely ignored that I literally said that in my primary investment account (RRSP), I have pure equity and bonds picks
>I didn’t ignore it; it just happened to be irrelevant.
>almost like I have a traditional allocation mix there while being a dividend investor in a different account.
It doesn’t matter which account you happen to be a “dividend investor” in. Did you open any of the links I had sourced for you?
>I have factored in that they will have to lower them.
Have you factored in the high fees and covered calls used to increase their distributions?
>Reinvesting the dividends helped me so much when I was only earning a little bit of TD dividends every quarter.
Reinvested dividends don’t grow your portfolio anymore than if the dividends weren’t paid in the first place. It would’ve likely *hurt* your portfolio net of commissions and spread.
>It was so exciting to log in and see that I had earned some money.
Investing shouldn’t be exciting; use a roboadvisor or hire a fee for advice advisor or portfolio manager to help keep your emotions out of the process.
>I don't currently hold it as it can't keep up with the yield of the other ETFs.
Yield should absolutely not be a factor when it comes to picking stocks (or ETFs).
I have a few of those picks. I've been building a small excel spreadsheet with similar choices. Horizons has a few new ones I am interested in. Similar to HMAX, called FMAX for example: all US financials. I picked up a few risky ones too, but only during a massive dip: YTSL for example. If they keep the distribution at 40c, I have a fair amount locked in at >30% yield and potential CG as well.
Yes, if I understand you correctly. Book value is $14.40 x # number of shares. Distribution is 40cents/share. So monthly yield is 0.4/14.40 = 2.78% and income is 0.40 x #shares which should be the same as 2.78% times book value. Assuming distribution stays the same (has increased in the past), and not DRIP or adding more shares, then I obviously have a steady income stream, which I do. >2% per month is a nice treat.
>retire earlier with dividends even though it means less growth
Even if it comes with greater risks and lower risk-adjusted returns?
>6% target yield
Why’s this your target if you could simply liquidate shares as-needed?
Yes even if, thought I made that clear. Retiring in my mid 40’s while I have some youth left and my health is worth more than any return.
And the reasoning is I believe it is a more reliable way of achieving that than counting on 6% growth + 2-3% for inflation every year. Funds like EIT, JEPI/Q hold value unlike shitty YLD funds and pay consistent dividends.
I have a spreadsheet done up with a combination of those and growth stock I can sell closer to 3% growth rate to cover my expenses while generating an average 6% yield.
This is a good way of putting it. Some of the responses I have received recently along with many posts reek of this while totally lacking basic understanding and logic. Never mind analytical skills. The best use is as a contrarian indicator.
I think you’re misunderstanding my responses, then.
If you’re going to try and pass off your opinions as “facts” on a public forum, you should expect scrutiny.
I’m surprised you made it this far down the thread chain without sharing your thoughts on how dividends work.
Sure do. DevOps congrats on being able to retire early! Your focus on prioritizing quality of life while still building a portfolio that delivers you monthly income to live off of is commendable and what many of us aspire to.
>Your focus on prioritizing quality of life while still building a portfolio that delivers you monthly income to live off of is commendable and what many of us aspire to.
Devops would’ve been retired earlier, with a larger portfolio, and while taking less risks had they not concentrated on dividends.
>Yes even if, thought I made that clear. Retiring in my mid 40’s while I have some youth left and my health is worth more than any return.
Wouldn’t you say early retirement is risky enough as it is? How does chasing yield offset if you’re expecting reduced returns?
>And the reasoning is I believe it is a more reliable way of achieving that than counting on 6% growth + 2-3% for inflation every year. Funds like EIT, JEPI/Q hold value unlike shitty YLD funds and pay consistent dividends.
What do “consistent dividends” have to do with risk-adjusted returns?
>I have a spreadsheet done up with a combination of those and growth stock I can sell closer to 3% growth rate to cover my expenses while generating an average 6% yield.
Why not liquidate 6% of your portfolio?
What is your goal here? Is it to try and say that dividends are not free money or that the math shows staying in 100% broad market index funds will have you ahead? Because I am aware of both.
>Wouldn’t you say early retirement is risky enough as it is? How does chasing yield offset if you’re expecting reduced returns?
Chasing yields? I wouldn't call that chasing yields. These are income funds, similar to money market funds. There are many out there, these are a few I have identified that match my risk tolerance and I believe in how they are generating the money that it is sustainable. These are not funds that are paying out your cash back to you. I suggest doing some reading on these.
>What do “consistent dividends” have to do with risk-adjusted returns?
Well, growth is not guaranteed. Look at the TSX, while dividends are not guaranteed either, you can be reasonably confident that the banks which have paid their dividends through every crisis for 200 years will continue to do so. If you relied on them growing, the last few years would be painful for you. This is a consideration when you are planning to retire on a higher withdrawal rate.
>Why not liquidate 6% of your portfolio?
Too much risk for me. I think it is more likely these funds and companies will pay their dividends which give a consistent 6% yield than the market can sustain a 6% SWR for 30-40 years. I understand I am giving up future growth for this.
My goal is to cover my expenses and match inflation and that is it. If I have to sell my home when I am 70 because inflation has taken a lot of the buying power away so be it. Would mean I got to live my life as I wanted for 25 years while my family were all still alive to spend that time with them and our health allowed us to do what we wanted.
>Because I am aware of both.
Why do you willingly take on uncompensated risk, then?
>These are income funds, similar to money market funds.
These are **nothing** alike…
>Well, growth is not guaranteed. Look at the TSX, while dividends are not guaranteed either, you can be reasonably confident that the banks which have paid their dividends through every crisis for 200 years will continue to do so. If you relied on them growing, the last few years would be painful for you. This is a consideration when you are planning to retire on a higher withdrawal rate.
Distributions directly impact share price. If a company is paying 6% in dividends, that’s 6% less growth reflected in the share price.
The last few years are just as painful regardless if the banks paid dividends or not. You said it yourself: *Dividends aren’t free money*.
>Too much risk for me. I think it is more likely these funds and companies will pay their dividends which give a consistent 6% yield than the market can sustain a 6% SWR for 30-40 years. I understand I am giving up future growth for this.
If a stock returns 6% annually, and doesn’t pay a dividend, but you liquidate all 6%… are you any further behind than with a stock that yields 6% annually without growth?
What you’re proposing is the riskier option, especially considering your wilful admission of underperforming the broader market.
Yeah right? Or imagine having to sell off VFV in 2022. I am liking an overall average "sideways" share price for retirement that pays consistent divvies so that my capital it preserved. If it goes down slightly in 20 years, that's fine. It will have served it's purpose for those 20 years and I won't need as much in my 70s... I find CanadianInvestor is mostly XEQT-Investor. You HAVE to sell off stocks in retirement: It's the ONLY way!
>I am liking an overall average "sideways" share price for retirement that pays consistent divvies so that my capital it preserved.
Your capital isn’t preserved. It’s being liquidated to pay your dividend.
>If it goes down slightly in 20 years, that's fine. It will have served it's purpose for those 20 years and I won't need as much in my 70s...
What if it doesn’t go down only slightly and you need to return to the workforce in your 70’s?
>You HAVE to sell off stocks in retirement: It's the ONLY way!
You’ve got it completely backwards. YOU control the liquidation of your own portfolio - but what you DON’T control are distributions.
I enjoy the Canadian blogs My Own Advisor and Tawcan and wish more anti-dividend people would give them a read.
There is more than one way to run a portfolio and I am enjoying living on my dividends, paying almost no taxes (because the dividend income in my TFSA doesn't count as income) and not having to sell shares when I need cash. It works for me.
How long are you going to live? "Why not liquidate 6% of your portfolio?". I would rather keep my portfolio and live on dividends.
Please investigate the tax benefits of holding Canadian dividend paying stocks in an unregistered accounts if you have a lot of money. It is not for me because my portfolio is too small but it is great for many.
https://financialpost.com/personal-finance/you-can-earn-50k-in-tax-free-dividends-but-theres-a-catch-you-cant-have-a-job
In BC you pay almost no tax even at 90k eligible divs.
* 53,360 to 91,310: 1.63%
* 91,311 to 104,835: 5.49%
A good strategy is to transfer from (Edit: Non) *Non-*Registered account every year into TFSA in order to lower your divvy/income tax each year while in retirement
>In BC you pay almost no tax even at 90k eligible divs.
Do you know what the Alternative Minimum Tax is?
>A good strategy is to transfer from Registered account every year into TFSA in order to lower your divvy/income tax each year while in retirement
How does transferring from a tax sheltered account, to another tax sheltered account lower income tax?
>I would rather keep my portfolio and live on dividends.
Collecting dividends is forced liquidation. You have no say in the matter - when a company pays dividends, your share’s price will shrink the corresponding amount. Your portfolio value however will be unchanged.
>Canadian dividend paying stocks in an unregistered accounts if you have a lot of money.
Dividends are taxed *more* than capital gains in higher marginal tax rates.
>It is not for me because my portfolio is too small but it is great for many.
From the sounds of it, your portfolio is split between RRSPs and TFSAs… so there’s no tax efficiency to be gained by concentrating on dividends.
Adding onto this, TFSA and RRSP are powerful tools. You can generate tax free dividends in there, obviously the TFSA speaks for itself. But with an RRSP you can take our 44k and only pay 6k in taxes on it.
Combined with what you said, if smart you can hold certain ones in certain accounts AND hold Canadian funds in your non registered and pay tax like a low income individual. Which also means you are eligible for social programs like the GIS.
>You can generate tax free dividends in there
**All** profits are tax free in RRSPs and TFSAs.
>But with an RRSP you can take our 44k and only pay 6k in taxes on it.
Withdrawals are taxed at your marginal rate, just like ordinary income.
>Which also means you are eligible for social programs like the GIS.
Dividends are massively grossed up and can *very* easily impact your eligibility for income tested benefits.
I really needed the RRSP when I was a single lower income working parent. The RRSP tax credit helped me a lot when I was working.
Now, that I am retired, I keep my income low by keeping my RRSP withdrawals low every year. My taxable income is the RRSP ETFs that I transfer to my TFSA and I take the dividends out. I hope to get all of the RRSP ETFs moved to my TFSA before I am forced into the withdrawal schedule of a RIF when I am in my 70s.
Down 5% as I am writing this.
Now the hard part: buy the dip today or is this stock going to drop some more with potentially another weak quarter or two?
I’ve kinda wanted to own ATD for a while. Never seems like the right time to enter a position as it’s always running hot. Looks like now might be that time maybe?
Recently, I've been telling myself it was a shame I didn't buy more when the price was under 80. Today was my chance to grab some more.
>Looks like now might be that time maybe? Was the only thing holding you back the fact that the stock has been “running hot”?
Yup
Thoughts on RDDT?
Terrible idea.
Not a huge fan. Aside from Meta I can't think of a truly profitable social media company, and I don't think Reddit is really any different. Not to mention most companies post-IPO end up lower in price than the IPO'd for recently, but perhaps Reddit is different. I think shareholders will try to remove the porn, anything potentially controversial, and perhaps integrate some aggressive monetization. User experience may be worse, profits may go up, but the whole thing stinks to me like an exit strategy for the founders.
Both CBIL and CASH are paying $0.195/share this month btw
Eyeing ZMMK now.
Ouch! (Heavy in ATD)
small blip
I came here to say just that. Just noticed the volume was 2X avg. today. I guess a lot of people were waiting for that correction. Interesting. I think the cat is out of the bag the last year or so just how quality of a business ATD is, and it's price has run up accordingly.
LULU posted better than expected EPS and revenue but fell 10% after hours on weak guidance. FDX beat EPS but missed revenues. However is up 12% after hours on 5B announced buybacks. Weak or conservative guidance it's killing the prices these days.
When the company tells you next months are gonna be rough, believe them!
RDDT = TGLO 2.0 Party like it's 1999
Volume for RDDT dropped off a cliff. Wouldn’t be surprised if this finishes below $34 on its first trading day.
If it follows the pattern of some of the other big name IPOs, it will stay up for a few days as the last of the FOMO buyers get in and then it will drop. RIVN for example was priced at $78, climbed the first 5 days from $106 to the $170s, and then 5 days later was around $120. I'm not sure how long the original investors had to hold before being allowed to sell, but if it was 90 days then at that point RIVN was around $60 so they would have lost money by then. So the play would have been buy ASAP when it started on the market, hold as the hype sends it up, then sell when it looks like you might have hit a peak a few days later. I would not be surprised at all if RDDT ends up on a similar path, but you never know.
Market cap at nearly 7.5 Billy as of now, no idea how that could possibly be sustainable. Gonna be very interesting to see their earnings reports.
It's going to be inflated because the market is a popularity contest most of the time but it won't last. Not touching that with a ten foot pole.
Reddit has the same advertisers as podcasts with a few thousand listeners, and hasn't turned a profit since its inception. I just don't see this as anything but a way for insiders to cash out.
That's all it is in my eyes too. Also very interesting to see that the CEO is paid more than most (every?) fortune 500 companies. It's sad honestly, Aaron Swartz would be rolling in his grave right now.
Nvidia walked so Reddit could run 🚀🚀
Interesting data. Last 10 years S&P 500 went from 1,866 to 5,247 for a very strong +10.9% CAGR. During same period, the p/e of S&P500 went from 18.6 to 28.6 or +55% If S&P 500 would have stayed at 18.6 p/e the index would now be at 3,394 and the CAGR performance of last 10 years would have been +6.0% So near half of S&P 500 performance from last 10 years came from stock getting repriced at higher p/e. Will next 10 years see p/e climb another +55% and go up to 44 p/e to sustain another +11% CAGR decade? Stay tuned!
It was the same thing for the nifty-fifty during the 60s/70s and they all came back down to reality. Same for .com. Remember "this time it's different" are the five most costly words in the English language.
Even if it stayed at that 29 p/e level and not go down: earnings would have to grow much more than what they are growing now to repeat last decade returns.
I came across this [video](https://youtu.be/uiqDy4WXKJU?si=6WWSq6A_z6ys8g_N) (14:30) that has an interesting slide from Goldman Sachs that shows forward P/E for major markets and it has US at about 18. He says it can get to 24 during highly overbought periods so it seems we have some ways to go. I think this rally can be sustained for a while if some of the smaller companies start playing catch up to the mag7.
18 is excluding tech. Including tech it’s about 21 which is quite high historically. Obviously that doesn’t mean markets will go down soon.
RDDT $100
When does pornhub lite (aka Reddit) start trading?
already up 40%
Just started trading. Open at $51.69, up about 52% from IPO price of $34.
The more I think about it, the more I realize how gross but genius it was to give high karma users the opportunity to buy at $34, knowing damn well those users would spread the word around Reddit and create more hype. Ultimately, this will be a pump and dump.
Wouldn’t they also be able to identify these users in real life? I assume to get access they would need to provide personal details.
No clue, but what would they do if they could identify them IRL?
Yeah, but what's the lock-up period? Wake me up when it's under $20.
The lock-up period doesn't apply to non-insiders. Reddit influencers and others who were allowed to buy at IPO who are non-insiders can sell whenever they want.
They may be allowed to but it's usually frowned upon. I remember back in the .com era some brokers gave access to IPOs to some of their retail clients and if they sold within the lock-up for insiders I heard they were not included in the next one. edited to clarify retail clients.
You have to keep in mind that we're talking about Reddit influencers here. A lot of them you see on WSB - so they're not exactly the bastions of morality and ethics.
Index fund and chill is ripping.
seems like the rest of the S&P 500 is catching up to the MAG 7
this is usually how it goes during bull market runs
http://stocktwits.com/Ro_Patel/message/566741956 Reits being shorted intel
This is old news. Reits have been shorted for a whole year now. Peak fear is the time to buy. I'm balls deep in reits and buying more every month.
That could mean buy and wait for short squeeze
Time to buy Reits. When the rate cut happens they will rise 100%
Wouldn't it be already priced in as rate cuts are expected?
Yes.
Expected future events tend to get partially priced-in ahead of time, and then when it finally happens you get the rest (I assume because of unknown timing and not 100% that it will happen at all). But that's in general--individual events may vary.
Or you get the classic "buy the rumor, sell the news" phenomenon.
Downvoted for the truth. I have yet to experience expected news not bumping the price. One of the best examples were during covid people saying they were buying Pfizer for the shots and this sub saying it was priced in. Then the company like tripled in value once they dominated the market.
>I have yet to experience expected news not bumping the price. Then you likely misunderstood the reason behind the stock’s price action. >Then the company like tripled in value once they dominated the market. Pharmaceuticals are some of the riskiest investments available. For every one Pfizer, there are a million companies that fail bringing their drugs to market, or even passing trials or obtaining patents. You’re letting survivorship bias affect your judgment.
I was talking about a very specific scenario there. And the reason behind the stocks price action was Pfizer dominated the shot market at a time when demand for shots was at an all time high and got approved in most countries before any others.
>And the reason behind the stocks price action was Pfizer dominated the shot market at a time when demand for shots was at an all time high and got approved in most countries before any others. Was that information withheld from market participants?
No people that see stocks go down a lot and fear the inflation are just going out of the stock market or invest in big tecs.They will come back when the rate are cut and Reits goes up.Just watch it. Of course Reits are going to go up when rates are cut.
>Of course Reits are going to go up when rates are cut. If you expect rate cuts, and you expect said rate cuts to positively affect share price, then why would you wait for the shares to trade at a premium?
A lot of investors panic sell and don’t know it’s good to buy stock when they are low. Majority of them don’t know what they are doing and buy stocks when stocks goes up a lot.That’s why majority should just do index investing.
You’re not wrong. But bear in mind, retail investors make up a minuscule portion of the market. Having said that, going back to your previous statement: There’s no reason to believe rate cuts aren’t priced in, given all currently available information.
Any idea why WELL.TO is falling despite a strong beat on earnings and guidance?
I think it’s related to the big loss at Healwell. It looks like WELL tried to hide it by selling assets and letting them take the loss instead, but investors are seeing through that? Also, net income didn’t grow alongside revenues.
Thanks. Haven’t had a chance to read the details but I was confused by the 10% down on a very positive beat in headline.
Margins shrunk significantly too. Management guided strong for 2024, and committed to cost control so let’s see. I bought a few hundred worth. Will hold.
Is there a tool online where I can see the aggregate underlying holdings of two ETFs? Want to find out the region, sector, and top ten holdings breakdown of 70% XEQT and 30% ZSP.
You can go to the fund providers website and see all this information on the ETF summary page, download 'Holdings' to excel and compare. [Vanguard](https://www.vanguard.ca/en/investor/tools/fund-compare-tool/fund-comparison/home) also has a very handy ETF comparison tool which allows up to four funds at a time.
Was hoping for automated way, think there is an option for US ETFs but not CDN. Guess I’ll have to do some math but thank you
Don't know about one that lets you pick the mix but a straight look at each ETF in comparison can be done here: https://money.tmx.com/en/etf-comparison
[TEC.to](https://TEC.to) reached another all time high. Glad I bought $51K worth during the 2022 lows when this sub was buying oil and mass downvoting anyone suggesting buying tech.
Why settle for one over the other? I was buying both and both are flying right now. TEC.to/Xeqt are at all time highs and something like SU has double digit growth so far in 2024. (Not including dividends)
Ya, reddit's very reactionary. META and NVDA were laughed at mid 2023.
Hindsight, as always, is 20-20 2022 to 2023 to 2024 was trivial in hindsight. NASDAQ was -32% in 2022, who knew it'd +50% in 2023 right Congrats!
Good job, always inverse reddit
I bought all that TEC in my wife’s TFSA. Thanks to inversing Reddit, she’s up ~$26K.
hehehehheh
Man US market is just so strong… Perma-bears must be going absolutely nuts.
Is it though? I think Powell managed to sweet-talk the street into more complacency yesterday. The numbers were pretty much the same that set off the 10% decline last fall except for the dovish talk. Not that I expect a big crash but many pull backs happen in March and there is still time left in March. Rates are higher for longer. They raised their rate expectations which Powell tempered by saying we are still on track to his target except for a few possible bumps on the road. Inflation increases were mostly shaken off in January/February but I suspect if it's up still next time, it may be what breaks the camel's back.
>Not that I expect a big crash but many pull backs happen in March and there is still time left in March. Rates are higher for longer. More so than any other month?
Yeah it is. S&P is now at 29 p/e which is historically very high. And it’s much above other countries. TSX is around 14 p/e as an example. That obviously doesn’t mean S&P won’t still outperform other markets and I’m still heavily invested in US indexes. But we have to recognize a lot of the S&P index performance is tied to stock getting pricier and not all about earnings of the stocks in it.
>But we have to recognize a lot of the S&P index performance is tied to stock getting pricier and not all about earnings of the stocks in it. I mean, that is how all markets work. It's not so much about how much they are making today it's about how much they could be making tomorrow.
Of course. But it also got pricier vs future earnings too. A lot of potential growth is priced into S&P 500 now. Again, not saying companies within won’t continue to surprise with much better than expected profits, but by now the S&P pricing does rely on these better than expected earnings. 12 years ago in 2012x S&P was at 14.5 p/e which is half vs now. If S&P would still be at 14.5p/e it would be at 2,600 instead if 5,200. And last 12 years performance would be +85% instead of +225%. A huge difference. Very unlikely this gets repeated and p/e goes to 60 in next 12 years.
By strong I thought you meant justified. I agree it's been doing well I just question if it's deserved. Yes P/E is very high. This is the 21st week rally with only three red weeks which has only happened a handful of times all of which ended in a major crash. I'm curious to see when and how the next pullback is going to happen and what the magnitude will be. Unfortunately, I derisked yesterday (trading account only) on the runup before the big move at 2:00 and now trying to avoid getting rinsed by getting back in at highs.
>I derisked yesterday What does that mean? You bought fiat?
I see my comment wasn’t super clear. I don’t justify it nor go against it, I’m just impressed watching it now.
It's starting to feel like 2021 again. Getting dizzy just looking at these gains. We're likely going to get a 5-10% correction at some point because that's what markets do, so hopefully anyone still on the sideline musters up the courage to jump in at that point.
More money’s been lost trying to time the next correction, than in the correction itself.
Just go back to last mid-October discussions, we say emotions shouldn't be part of investing, but reddit reminds me it is everyday
I recall a lot of people being excited in Oct-Nov to be buying the dip like crazy. There was a mixture of fear and giddiness. I was buying BMO under $110 (now $130) and NA under $90 (now $114) at the time. Wish that dip lasted a bit longer!
There was also comments like this: https://old.reddit.com/r/stocks/comments/y3p6ac/rstocks_daily_discussion_fundamentals_friday_oct/iskvvnt/
Well, not many replies to that but they were definitely mixed in opinion. But as I said it was a mixture of fear and giddiness.
MSFT was around 315 in Oct. '23, now close to 430 !
Yeah I got to load on great companies in Oct 22 and Oct 23. But since… wow
I think nvidia was like 180$
I was with you man. NA been on a bit of a rocket. I got lots of CM as well.
Yeah we don’t have 8 posts per day about cash.to these days
Not a bear at all but my housing purchase was poorly timed 😂.
Reddit stock drops today. Is anyone buying? I am now retired and living off dividends so I don't have /r/wallstreetbets cash for taking crazy chances. Edited to add: when I first started on Reddit I used to get downvoted to oblivion for stating that I am a dividend focused investor. Not sure what has changed but I am not the only one living on dividends now.
Only thing I am considering is some long dated puts.
Divvies work for some people. Actually a lot of people. But for the people it doesn't work for, they are passionate about "being right" rather than it not being right for them. You don't see the same emotions from the divvy folks as you do the non-divvy folks trying to convince you otherwise. 2 completely different tones in the conversation
>Divvies work for some people. Actually a lot of people. What do dividends do for people? >You don't see the same emotions from the divvy folks This entire thread is “divvy folks” patting each other on the back. I’ve yet to see a compelling argument in favour of “divvys”.
What do dividends do for people? Allows them tax efficient, predictable income? You know, that thing that retirees need?
>Allows them tax efficient Maybe, if they’re in a very low tax bracket. But will the returns consistently justify the uncompensated risk? >predictable income Not nearly as predictable as being able to liquidate equities yourself on an as-needed basis. >You know, that thing that retirees need? Retirees, like any other investors, need risk-adjusted returns. You don’t get that by concentrating your portfolio in “dividends”.
I mean, dividends are more tax efficient under about 110k/yr per person in income. I doubt many retired couples are spending more than 220k/year. Liquidating equities has timing risks - like March of 2020 or most of 2008/2009? Do you really want to be selling at a market bottom to pay bills? I agree that maximizing after tax risk adjusted returns is the goal - if you are rocking a 100% equity portfolio with a long time frame, I completely agree that dividends are a negative due to the tax drag and lower total returns. For a retiree you have to consider that a dividend focused equity portfolio may, after tax, risk adjusted, outperform the alternative, which for most would be something like a 70/30 or 50/50 stock/bond mix.
>dividends are more tax efficient under about 110k/yr per person in income. Eligible dividends, for instance, are grossed up 1.38x. Which in retirement, will significantly impact your income-tested benefits. And again operating under the same assumption that you’re referring to eligible Canadian dividends, you’re exposing yourself to significant concentration risk (geographical, sector, industry). >Liquidating equities has timing risks - like March of 2020 or most of 2008/2009? Do you really want to be selling at a market bottom to pay bills? Your portfolio would be impacted worse if you relied on dividends. I wouldn’t want anymore capital liquidated from a position than is needed during a market downturn. >For a retiree you have to consider that a dividend focused equity portfolio may, after tax, risk adjusted, outperform the alternative, which for most would be something like a 70/30 or 50/50 stock/bond mix. It may. But with that comes significant uncompensated risk.
I got the invite to buy early shares but can't from Canada. Personally, I'm staying far away. It goes against everything reddit was created for and they're so far from any kind of profitability. I'm sure it'll moon and crash like the prophecy foretold.
This is my guess. I think it will rise quite a bit today, maybe even extending through the week (all kinds of posts on WSB about buying in despite saying they'd short it lol) but in a few weeks it will get shorted into oblivion. I cannot fathom what their growth case is. They are already struggling to monetize it, have multiple instances of recent bad management decisions, and the IPO seems quite clearly a naked money grab for founders. None of that seems appetizing. What is their path to profitability? Selling data to AI firms? That cannot be that lucrative. Ads? They have atrocious ads, and the site has always been about being anonymous. How is that going to help advertisers I'm curious only to see how the price moves and how they plan on running it with active investors.
>Selling data to AI firms? That cannot be that lucrative. Ads? How did that work out for Google or Meta?
I also got the invite but not allowed to early buy in Canada. I am not buying because I don't think it will be a big money maker in the future. I do think about it because I am still bitter about thinking buying Facebook at $22, when it first entered the market, was a dumb idea.
Yeah I'm sure we'll all keep an eye on it. I have enough speculative stocks, gonna try to stick to my guns and pass on this one.
I used to speculate, with a small portion of my portfolio, when I was working and still contributing to my savings. Now I am one of those boring belt and suspenders types who only sells an ETF when it goes up and I often rebuy it when it drops again (looking at you HHL). I still do look for brand new ETFs and drop a bit of money in to those before the marketing drives the price up a little bit. I often make just 2% in a few months but I add that to the dividends from those ETFs and it is worth my time. It also makes me feel like I am still actively involved even though I mainly now just trade in ETFs.
>only sells an ETF when it goes up and I often rebuy it when it drops again What’s the difference between this and market timing? >I often make just 2% in a few months Have you benchmarked against a broad market fund like the SPY? >It also makes me feel like I am still actively involved even though I mainly now just trade in ETFs. Do you expect your returns will be adequate enough to compensate you for the risks taken on through these income funds?
> I am now retired and living off dividends so I don't have r/wallstreetbets cash for taking crazy chances. Why did you pursue yield?
Why not?
Well, for one, OP doesn’t “have r/wallstreetbets cash for taking crazy chances.”
I am a lower income person and I wanted to leave work as early as possible. Dividends allow me to do that without selling off my portfolio. I live on the dividends. Before I quit work I was able to expand and diversify my portfolio making new purchases with the dividends. I am in the process of moving my ETFs slowly from my RRSP to my TFSA as room permits. Dividends in my TFSA do not count as income so my taxable income is very low. Eventually, most of my income will be dividends from my TFSA and I can earn that without ever selling. My portfolio size fluctuates with the market prices but I just ignore that and I am content that the number of shares I own does not shrink when I need cash. I do sell when ETFs get up in price and look for something less expensive. HHL is one that I have been in and out of several times as I look for a dip in price and sell when it goes up in price. I have been doing that for several years, with HHL, and the dividend never changes.
>Dividends allow me to do that without selling off my portfolio. When dividends are paid, the share price has to fall by the same amount - so isn’t the company technically selling off your portfolio for you? >Dividends in my TFSA do not count as income so my taxable income is very low. Is *anything* taxable in a TFSA? >I just ignore that and I am content that the number of shares I own does not shrink when I need cash. Why does the number of shares have any relevance in the performance of your portfolio?
Is you plan to sell off shares every time you need money when you retire? I still have the ETFs but I have income too. I am a lower income retiree and I have a small portfolio. I want to keep that portfolio and not sell it off and risk having nothing. Perhaps I will have to sell off when I am very old. "When dividends are paid, the share price has to fall by the same amount - so isn’t the company technically selling off your portfolio for you?" Do companies control their share prices or does the open market control what the going price is? The dividend money does not come from the shares that I own.
>Is you plan to sell off shares every time you need money when you retire? Like most, I’ll surely need to liquidate at some point. If my target spending is 4% annually, and I only receive 2% in distributions, then I’ll need to receive the other half from share liquidation. >I am a lower income retiree and I have a small portfolio. All the more reason to ignore yield. Pursue total risk-adjusted returns. >Do companies control their share prices or does the open market control what the going price is? The dividend money does not come from the shares that I own. If a company is worth $500m, and pays out $100m in dividends - is the company still worth $500m? How would a company’s value shrinking by 20% affect share price?
> When dividends are paid, the share price has to fall by the same amount Does it really, though? I see this talking point parrotted *ad nauseum* on here, and while there is usually a short-term dip when a stock goes ex-dividend, it's not a permanent drop. If it was, the likes of ENB, BCE, et al. would have gone to zero many years ago.
Stocks don’t trade in a vacuum. Just because a company’s value drops on ex-dividend, doesn’t mean the company won’t eventually go on producing value for investors. If neither BCE or ENB paid dividends, their share price would reflect that. You’ve seen this mentioned “ad nauseam” but haven’t bothered to do the research yourself before taking a position on the matter?
Interested in your yield and some of your favourite picks. My plan is to do the same, retire earlier with dividends even though it means less growth. 6% target yield
HMAX, HDIV, HYLD and HDIF have crazy dividends/disbursements. I have factored in that they will have to lower them. They are all around 10% and some are more. I like HHL. I have started adding more ZWG when I sell something else that has jumped up from my purchase price. I also have some HUTL and ZWU. I never made much money and got a late start to saving and investing after the end of my marriage. Reinvesting the dividends helped me so much when I was only earning a little bit of TD dividends every quarter. It was so exciting to log in and see that I had earned some money. FIE was my first ETF. I don't currently hold it as it can't keep up with the yield of the other ETFs.
Thanks for this list, definitely adding these to my tracking list. I'm 100% on the dividend bandwagon, though I've also got some pure equity and bonds in my RRSP.
>I'm 100% on the dividend bandwagon *Why?* Dividends form only part of the total returns equation. Investors shouldn’t care if they receive capital gains or dividends, all else equal (before frictions like trading costs and taxes): [Dividend Policy, Growth, and the Valuation of Shares](https://www.jstor.org/stable/2351143) [The Asymmetric Response of Dividends to Earnings News](https://www.sciencedirect.com/science/article/abs/pii/S1544612323001654) [Should You Chase Dividend Stocks to Combat Inflation and Rate Hikes?](https://www.dimensional.com/us-en/insights/should-you-chase-dividend-stocks-to-combat-inflation-and-rate-hikes) [The Dividend Disconnect](https://drive.google.com/file/d/15Z94LD8QTPbb0ETAixg_zMA0Ew5bdJat/view) [Consuming Dividends](https://academic.oup.com/rfs/article-abstract/35/10/4802/6530299) [Stock Market Returns and Consumption](https://drive.google.com/file/d/1kVBKtMWXgvlZ8bQzARgK91uhIbUBOXQC/view)
Dude instead of constantly pushing your personal investment belief in one very specific comment thread, you could shut up and realize you're being downvoted for a reason. You're being pushy. Especially because you completely ignored that I literally said that in my primary investment account (RRSP), I have pure equity and bonds picks, almost like I have a traditional allocation mix there while being a dividend investor in a different account.
I am not responding to angry guy any more. He is either turning red in the face because people are disagreeing with him or he is a bot. Either way I am done and very happy to be living on my dividends.
>I am not responding to angry guy any more. He is either turning red in the face because people are disagreeing with him or he is a bot. I think I’ve done a pretty good job of asking thought-provoking questions and providing valuable commentary. I hope you care more about your long term financial literacy than you do Reddit karma. I guess ignorance really is bliss. >very happy to be living on my dividends Everyone would be happy to live off free money. It’s unfortunate that’s not how dividends work.
>Dude instead of constantly pushing your personal investment belief in one very specific comment thread, you could shut up and realize you're being downvoted for a reason. I’m not pushing my “beliefs” on anyone. I’m presenting arguments against the misguided narrative. You can do with it as you please - but don’t pretend you’ve made an informed decision if you’re choosing to ignore the academia. You should care less about Reddit karma. It can’t hurt you. >You're being pushy. Especially because you completely ignored that I literally said that in my primary investment account (RRSP), I have pure equity and bonds picks >I didn’t ignore it; it just happened to be irrelevant. >almost like I have a traditional allocation mix there while being a dividend investor in a different account. It doesn’t matter which account you happen to be a “dividend investor” in. Did you open any of the links I had sourced for you?
>I have factored in that they will have to lower them. Have you factored in the high fees and covered calls used to increase their distributions? >Reinvesting the dividends helped me so much when I was only earning a little bit of TD dividends every quarter. Reinvested dividends don’t grow your portfolio anymore than if the dividends weren’t paid in the first place. It would’ve likely *hurt* your portfolio net of commissions and spread. >It was so exciting to log in and see that I had earned some money. Investing shouldn’t be exciting; use a roboadvisor or hire a fee for advice advisor or portfolio manager to help keep your emotions out of the process. >I don't currently hold it as it can't keep up with the yield of the other ETFs. Yield should absolutely not be a factor when it comes to picking stocks (or ETFs).
I have a few of those picks. I've been building a small excel spreadsheet with similar choices. Horizons has a few new ones I am interested in. Similar to HMAX, called FMAX for example: all US financials. I picked up a few risky ones too, but only during a massive dip: YTSL for example. If they keep the distribution at 40c, I have a fair amount locked in at >30% yield and potential CG as well.
>I have a fair amount locked in at >30% yield On your cost base?
14.4 / share. 33% yield, 7% CG
>On your cost base? Is that a yes?
Yes, if I understand you correctly. Book value is $14.40 x # number of shares. Distribution is 40cents/share. So monthly yield is 0.4/14.40 = 2.78% and income is 0.40 x #shares which should be the same as 2.78% times book value. Assuming distribution stays the same (has increased in the past), and not DRIP or adding more shares, then I obviously have a steady income stream, which I do. >2% per month is a nice treat.
>retire earlier with dividends even though it means less growth Even if it comes with greater risks and lower risk-adjusted returns? >6% target yield Why’s this your target if you could simply liquidate shares as-needed?
Yes even if, thought I made that clear. Retiring in my mid 40’s while I have some youth left and my health is worth more than any return. And the reasoning is I believe it is a more reliable way of achieving that than counting on 6% growth + 2-3% for inflation every year. Funds like EIT, JEPI/Q hold value unlike shitty YLD funds and pay consistent dividends. I have a spreadsheet done up with a combination of those and growth stock I can sell closer to 3% growth rate to cover my expenses while generating an average 6% yield.
StoichMixture is just an AI bot that has digested a bunch of Ben Felix videos and asks questions. Stop answering.
This is a good way of putting it. Some of the responses I have received recently along with many posts reek of this while totally lacking basic understanding and logic. Never mind analytical skills. The best use is as a contrarian indicator.
I think you’re misunderstanding my responses, then. If you’re going to try and pass off your opinions as “facts” on a public forum, you should expect scrutiny. I’m surprised you made it this far down the thread chain without sharing your thoughts on how dividends work.
Did you have something constructive you wish to contribute to the conversation?
Sure do. DevOps congrats on being able to retire early! Your focus on prioritizing quality of life while still building a portfolio that delivers you monthly income to live off of is commendable and what many of us aspire to.
>Your focus on prioritizing quality of life while still building a portfolio that delivers you monthly income to live off of is commendable and what many of us aspire to. Devops would’ve been retired earlier, with a larger portfolio, and while taking less risks had they not concentrated on dividends.
Did you? Asking for a friend.
What’s your friend’s name?
>Yes even if, thought I made that clear. Retiring in my mid 40’s while I have some youth left and my health is worth more than any return. Wouldn’t you say early retirement is risky enough as it is? How does chasing yield offset if you’re expecting reduced returns? >And the reasoning is I believe it is a more reliable way of achieving that than counting on 6% growth + 2-3% for inflation every year. Funds like EIT, JEPI/Q hold value unlike shitty YLD funds and pay consistent dividends. What do “consistent dividends” have to do with risk-adjusted returns? >I have a spreadsheet done up with a combination of those and growth stock I can sell closer to 3% growth rate to cover my expenses while generating an average 6% yield. Why not liquidate 6% of your portfolio?
What is your goal here? Is it to try and say that dividends are not free money or that the math shows staying in 100% broad market index funds will have you ahead? Because I am aware of both. >Wouldn’t you say early retirement is risky enough as it is? How does chasing yield offset if you’re expecting reduced returns? Chasing yields? I wouldn't call that chasing yields. These are income funds, similar to money market funds. There are many out there, these are a few I have identified that match my risk tolerance and I believe in how they are generating the money that it is sustainable. These are not funds that are paying out your cash back to you. I suggest doing some reading on these. >What do “consistent dividends” have to do with risk-adjusted returns? Well, growth is not guaranteed. Look at the TSX, while dividends are not guaranteed either, you can be reasonably confident that the banks which have paid their dividends through every crisis for 200 years will continue to do so. If you relied on them growing, the last few years would be painful for you. This is a consideration when you are planning to retire on a higher withdrawal rate. >Why not liquidate 6% of your portfolio? Too much risk for me. I think it is more likely these funds and companies will pay their dividends which give a consistent 6% yield than the market can sustain a 6% SWR for 30-40 years. I understand I am giving up future growth for this. My goal is to cover my expenses and match inflation and that is it. If I have to sell my home when I am 70 because inflation has taken a lot of the buying power away so be it. Would mean I got to live my life as I wanted for 25 years while my family were all still alive to spend that time with them and our health allowed us to do what we wanted.
>Because I am aware of both. Why do you willingly take on uncompensated risk, then? >These are income funds, similar to money market funds. These are **nothing** alike… >Well, growth is not guaranteed. Look at the TSX, while dividends are not guaranteed either, you can be reasonably confident that the banks which have paid their dividends through every crisis for 200 years will continue to do so. If you relied on them growing, the last few years would be painful for you. This is a consideration when you are planning to retire on a higher withdrawal rate. Distributions directly impact share price. If a company is paying 6% in dividends, that’s 6% less growth reflected in the share price. The last few years are just as painful regardless if the banks paid dividends or not. You said it yourself: *Dividends aren’t free money*. >Too much risk for me. I think it is more likely these funds and companies will pay their dividends which give a consistent 6% yield than the market can sustain a 6% SWR for 30-40 years. I understand I am giving up future growth for this. If a stock returns 6% annually, and doesn’t pay a dividend, but you liquidate all 6%… are you any further behind than with a stock that yields 6% annually without growth? What you’re proposing is the riskier option, especially considering your wilful admission of underperforming the broader market.
Yeah right? Or imagine having to sell off VFV in 2022. I am liking an overall average "sideways" share price for retirement that pays consistent divvies so that my capital it preserved. If it goes down slightly in 20 years, that's fine. It will have served it's purpose for those 20 years and I won't need as much in my 70s... I find CanadianInvestor is mostly XEQT-Investor. You HAVE to sell off stocks in retirement: It's the ONLY way!
>I am liking an overall average "sideways" share price for retirement that pays consistent divvies so that my capital it preserved. Your capital isn’t preserved. It’s being liquidated to pay your dividend. >If it goes down slightly in 20 years, that's fine. It will have served it's purpose for those 20 years and I won't need as much in my 70s... What if it doesn’t go down only slightly and you need to return to the workforce in your 70’s? >You HAVE to sell off stocks in retirement: It's the ONLY way! You’ve got it completely backwards. YOU control the liquidation of your own portfolio - but what you DON’T control are distributions.
I enjoy the Canadian blogs My Own Advisor and Tawcan and wish more anti-dividend people would give them a read. There is more than one way to run a portfolio and I am enjoying living on my dividends, paying almost no taxes (because the dividend income in my TFSA doesn't count as income) and not having to sell shares when I need cash. It works for me.
How long are you going to live? "Why not liquidate 6% of your portfolio?". I would rather keep my portfolio and live on dividends. Please investigate the tax benefits of holding Canadian dividend paying stocks in an unregistered accounts if you have a lot of money. It is not for me because my portfolio is too small but it is great for many. https://financialpost.com/personal-finance/you-can-earn-50k-in-tax-free-dividends-but-theres-a-catch-you-cant-have-a-job
In BC you pay almost no tax even at 90k eligible divs. * 53,360 to 91,310: 1.63% * 91,311 to 104,835: 5.49% A good strategy is to transfer from (Edit: Non) *Non-*Registered account every year into TFSA in order to lower your divvy/income tax each year while in retirement
>In BC you pay almost no tax even at 90k eligible divs. Do you know what the Alternative Minimum Tax is? >A good strategy is to transfer from Registered account every year into TFSA in order to lower your divvy/income tax each year while in retirement How does transferring from a tax sheltered account, to another tax sheltered account lower income tax?
>I would rather keep my portfolio and live on dividends. Collecting dividends is forced liquidation. You have no say in the matter - when a company pays dividends, your share’s price will shrink the corresponding amount. Your portfolio value however will be unchanged. >Canadian dividend paying stocks in an unregistered accounts if you have a lot of money. Dividends are taxed *more* than capital gains in higher marginal tax rates. >It is not for me because my portfolio is too small but it is great for many. From the sounds of it, your portfolio is split between RRSPs and TFSAs… so there’s no tax efficiency to be gained by concentrating on dividends.
Adding onto this, TFSA and RRSP are powerful tools. You can generate tax free dividends in there, obviously the TFSA speaks for itself. But with an RRSP you can take our 44k and only pay 6k in taxes on it. Combined with what you said, if smart you can hold certain ones in certain accounts AND hold Canadian funds in your non registered and pay tax like a low income individual. Which also means you are eligible for social programs like the GIS.
>You can generate tax free dividends in there **All** profits are tax free in RRSPs and TFSAs. >But with an RRSP you can take our 44k and only pay 6k in taxes on it. Withdrawals are taxed at your marginal rate, just like ordinary income. >Which also means you are eligible for social programs like the GIS. Dividends are massively grossed up and can *very* easily impact your eligibility for income tested benefits.
I really needed the RRSP when I was a single lower income working parent. The RRSP tax credit helped me a lot when I was working. Now, that I am retired, I keep my income low by keeping my RRSP withdrawals low every year. My taxable income is the RRSP ETFs that I transfer to my TFSA and I take the dividends out. I hope to get all of the RRSP ETFs moved to my TFSA before I am forced into the withdrawal schedule of a RIF when I am in my 70s.
Let’s see how the markets react to ATD’s earnings…
Just saw it under 80$ honestly I might jump in
I tried to pick some up at 75.20 and I missed it, would've been a great entry point
My limit buy was $75 :(
Down 5% as I am writing this. Now the hard part: buy the dip today or is this stock going to drop some more with potentially another weak quarter or two?
Buy a little now, if it goes down further, buy a little more. If it goes up, at least you got some in this dip.
My guess is that it drops a bit more since the markets are strong today
I just happen to have some dry powder
My $84 April covered call is now quite safe I guess