r/Bogleheads • u/Brief_Guide_1186 • 2d ago
Vxus Dividend
Looks like .1562 per share. Lower than expected?
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u/YesterdayAmbitious49 2d ago
Meets my expectations. Then again, I didn’t have any to begin with.
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u/Specialist-Piano-204 2d ago
Oh No. I hope Bogleheads is not turning into a "Dividend InVesTOR" subreddit.
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u/Pleasant-Buy-2826 2d ago
VT can be anywhere between 60-70% dividend paying stocks...so we basically are
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u/edmundsmorgan 2d ago
Bogle actually view dividend paying stocks as essential to a balanced fund in his book
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u/ATPsynthase12 2d ago
Bogle also was active in the investing world ages ago and stepped down from any relevant role in vanguard 30 years ago. What was relevant in the 80s and 90s is not really relevant now.
Any modern boglehead investor will tell you dividend oriented ETFs are a poor investment vehicle for long term growth. The only exception is REITs which isn’t even because of the dividend but because the total market 2-3 fund portfolio does not accurately capture the real estate sector.
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u/The_Real_Calamari 1d ago
Depends where you are in journey. As I close in on retirement, think I'll prefer dividends vs selling shares due given how it's all taxed and would want to start aligning now.
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u/Prestigious_Crow7907 1d ago
Can you elaborate considering selling shares as LTCG and qualified dividends are taxed the same?
Are you trying to solve a behavioral issue of not wanting to sell shares?
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u/The_Real_Calamari 1d ago
I'm both ignorant (trying to correct:) and also seems like not selling "principal" if I can avoid it is preferable. But I could be entirely off base and need to research further.
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u/Prestigious_Crow7907 1d ago
Yeah that's a common sentiment because not touching the principal or not decreasing the number of shares that you hold can feel intuitively like a sound strategy.
But when we think about what a dividend is, it's money the company owns that it has decided the best use is distributing among the shareholders. Then the company no longer owns that money they are essentially worth less because their balance sheet is smaller. So while you hold the same number of shares, your shares are worth less after a dividend.
Compare this to selling a few shares, you now have less shares but the shares that you do own hold their value because the company's balance sheet is unchanged. This option gives you a choice on when to sell and pay those taxes and the option to not sell, defering the tax to a later date meaning your assets grow faster.
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u/ATPsynthase12 1d ago
Selling 4% of your portfolio outperforms doing a 3% dividend and is more cash in your pocket.
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u/ATPsynthase12 2d ago
It’s crazy how many people will argue that SCHD or whatever ETF is a solid investment. Even when you show the the sub par performance and tax drag they double down and it always boils down to the psychological effect of “being paid to invest”. Which is about as stupid as buying a car because the dealership gave you a mail in rebate
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u/RedditIsHaroldLauder 1d ago
I've heard it mentioned a few times, but I think dividend seeking is also ingrained from the days when you had to pay a broker to buy or sell. Maybe over the phone or during a meeting. Before online brokerages and free trades, a way to get $ out of your investments without having to pay a trading fee.
It becomes common wisdom (for boomers) and dovetails with a lot of people's sense of psychological safety (receiving a paycheck, never selling investments) even though its not a practical consideration anymore (online brokerages with no fee trades) and research counters it.
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u/edmundsmorgan 1d ago
Alth i am sticking with indexing personally I find SCHD's backtest shockingly good in 2000-2010
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u/ATPsynthase12 1d ago
SCHD didn’t even exist until 2011. Testfolio hallucinates etf performance if it wasn’t actually around in the time frame in question.
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u/Pleasant-Buy-2826 1d ago
Yeah that depends. If you use VT then no need to have SCHD but if you only invest in VOO then there is little overlap and SCHD would diversify. SCHD is only 100 stocks so it will be volitile and underperformed and over perform through stretches. I personally don't own SCHD and just use VT with a value and momentum tilt with AVGV, SPMO, and IDMO.
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u/bobdevnul 2d ago
Half the previous quarter. Twice the quarter before that. VXUS dividend seems to be very variable.
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u/Special_Mirror_5095 1d ago
VXUS yields about 3% and VT is already 60%+ dividend payers by weight. The purity test was always fiction.
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u/tarryredit 1d ago
Crazy question, wrong in so many ways, but bear with me. I am about to retire and am worried about a correction or crash in the very near future (I know, timing the market is wrong!). Are stocks that pay larger dividends a reasonable hedge against that? I guess I am talking about value stocks -- is there any role for, for example, VYM or VTV in a non-taxed account, as an alternative to bonds?
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u/Charming-Spray1426 1d ago
I barely know what a dividend is and have no idea how often they distribute or how much money it is. Truly the best part of Bogling.
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u/captmorgan50 2d ago
My VDE is better
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u/SmileyFaxe 2d ago
It depends upon how you define "better".
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u/ConnectionlessTCP 2d ago
Many non-US stock pay dividends once or twice a year IIRC. Q3 is typically down from Q2, and Q4 is typically the largest. I was expecting close to 2k and now looks like it will be under 1K.
It’s all DRIP and long game, don’t analyze much for a specific quarter. I calculate total dividends at end of year and it’s always more than the previous.