3 ms·
Removing dividend does make sense because dividends are taxed. You cannot reinvest all dividends, unless you're using a tax advantaged account.
by coliveira 4y ago
Removing dividend does make sense because dividends are taxed. You cannot reinvest all dividends, unless you're using a tax advantaged account.
- NovemberWhiskey 4y agoSo are bond coupons, and (within the current regime) at a disadvantageous rate relative to dividends!
- lexapro 4y agoPrice increases are taxed as well (eventually), do you also remove them?
- fshbbdssbbgdd 4y agoStepped-up basis takes care of that. Buy, borrow, die!
- MichaelDickens 4y agoThis might justify discounting dividends (eg reducing them by 20%), but not removing them entirely.
- nwiswell 4y agoMoreover the more modern approach is share repurchases, which are largely not subject to the tax drag and use the same money that was used historically for dividends.
- ClumsyPilot 4y agoIt is worth noting that until 1982, stock buybacks were illegal—deemed as market manipulation
- xwolfi 4y agoDividends aren't taxed where I am, and it skews our investment, even towards US stocks. I find it interesting to include.