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Do not do this. Dividends are not a good way to pick stocks. Dividends and buybacks are fungible, except that buybacks are more tax efficient. All equities shou
by darawk 6y ago
Do not do this. Dividends are not a good way to pick stocks. Dividends and buybacks are fungible, except that buybacks are more tax efficient. All equities should have the same risk-adjusted expected total return (i.e. including dividends, if markets are efficient), so you should not be picking stocks based on their dividend yield alone. If you want income from your equity portfolio, just periodically sell shares.
- ReallyAnonymous 6y agoIf you make less than 38600, you pay ZERO dollars in taxes on the first $75k of qualified dividend income
- pxx 6y agoYour sentence contradicts itself. How can you make less than $38,600 when you're making $75,000? Also note that long-term capital gains are also taxed at the same rate as qualified dividends, but can be deferred into the future. Your argument doesn't seem to advocate for the thing you think it does.
- gcb0 6y ago> If you want income from your equity portfolio, just periodically sell shares. how much continuous growth do you expect the market will have exactly?
- imtringued 6y agoFrom the perspective of an investor this is spot on but on a societal scale it would be better if capital gains were taxed more than dividends. Dividends have to be paid from the income a company generates, meanwhile the stock price can be influenced by almost anything and it doesn't actually require the company to generate more value.
- darawk 6y agoYa, I think which way the rules should be here is a complicated question, but it certainly shouldn't be the case that we have two arbitrarily different taxation schemes.