4 ms·

Dividends generally are not super useful to investors - you don't get to decide when they occur and when you pay tax. If you are in the accumulation phase of l

Dividends generally are not super useful to investors - you don't get to decide when they occur and when you pay tax. If you are in the accumulation phase of life this isn't really useful if you are going to be reinvesting the money anyways. They aren't bad, just not really worth the hype. As always, bogleheads has a good writeup on dividends: https://www.bogleheads.org/wiki/Dividend https://www.bogleheads.org/wiki/Dividend

nemo44x 3y ago
Indeed, hence why buybacks are so popular. However keep in mind that there are qualified dividends as well which are taxed at the preferential long term capital gains rate. Still a tax though but rolling those back into the stock has good long term results. I think congress was talking about taxing buybacks?
- moneywoes 3y ago
  What’s the distinction of these qualified dividends?
  - ac29 3y ago
    "A dividend is considered to be qualified if you have held a stock for more than 60 days in the 121-day period that began 60 days before the ex-dividend date"
arbuge 3y ago
Dividends may keep management disciplined, knowing they have to share some profits with shareholders. Companies without dividend payments that retain all their earnings may be more prone to destruction of shareholder value through empire building sprees by management.
jjav 3y ago
> you don't get to decide when they occur and when you pay tax In a taxable account. I keep high dividend stocks and ETFs in IRA accounts. For taxable accounts, I prefer stocks that are either growing or doing buybacks.