3 ms·
You dont get taxed until you sell. The performance shown here is for a buy and hold strategy.
by sks 10y ago
You dont get taxed until you sell. The performance shown here is for a buy and hold strategy.
- Retric 10y agoDividends are also taxed, so even reinvesting has a cost. Granted, IRA/401k etc exist and in years with 0-3% it's not that big a deal, but over 20 years it's often a significant cost.
- runako 10y agoDividends are not taxed in tax-deferred accounts like IRA/401(k).
- Retric 10y agoYes, that's why I mentioned them. Sorry, if I was not clear, though they also generally have associated fees. So again, nominal breakeven is not the same as actual breakeven.
- jpmattia 10y ago> Dividends are not taxed in tax-deferred accounts like IRA/401(k) Only if you never withdraw them.
- greeneggs 10y agoNo, you do get taxed on dividends.
- nostrademons 10y agoYou do, but that's why dividends are becoming increasingly rare in the stock market. Many firms are preferring buybacks instead, which cause a pop in the stock price for remaining stockholders and so get taxed as capital gains.
- sokoloff 10y agoQualified dividends (which is most of them) are also taxed at long-term capital gains rates. https://en.wikipedia.org/wiki/Qualified_dividend https://en.wikipedia.org/wiki/Qualified_dividend
- malz 10y agoI don't believe "dividends are becoming increasingly rare in the stock market". One measure of that is to compare the S&P 500 yield with treasury yield, the latter being near a historic low, but the S&P yield near a consistent 2% for over a decade, and quite attractive now relative to treasuries. http://avondaleam.com/sp-500-dividend-vs-10-year-treasury-yield/ http://avondaleam.com/sp-500-dividend-vs-10-year-treasury-yi...
- deleted 10y ago[deleted]