4 ms·

Dividends don't always "hurt". They let one automatically claim profits on a trade, without the hassle of divesting shares.

• kevinventullo 5y ago
  What I mean is, if I get a stock grant spread out over four years, then the shares I receive in year 4 have implicitly had their value decreased by the dividends paid out in years 1-3.
  • laurent92 5y ago
    But that assumes the company has the choice of keeping dividends and investing it smartly.
• gruez 5y ago
  With trades being commission-free these days, that benefit is negligible. Even with $10 trades (the usual price before commission free trades), and you withdrawing $20k from your retirement account annually, once a month, that works out to a drag of 0.6%. OTOH there's a very real downside to getting paid dividends (and incurring a taxable event) when your income is high (eg. making 400k bay area salary. If it was poured into the stock price instead, you could wait until you retire and get taxed on a lower marginal rate.
• Asymmetryk 5y ago
  you enjoy your annual ex/cum-divi volatility and applying income tax and potentially overseas withholding taxes and exemptions and treaties rules? the administration and process involved in setting dividends isn't very trivial either and too often maintenance of dividend payments are placebos for lackadaisical areas of more important management responsibility and it's too common for factions in the boardroom to be trying to serve and attract entirely different types of investors who would be better served with tracking stocks or demergers and so on for some people any dividend unsupported by a very clear rationale is a red light but of course if you are doing in depth company analysis you may have all of this covered in your models and settlement and actions systems.