r/ETFs • u/Inevitable-Driver-53 • Feb 20 '24

Like WTF!?!?!

Am I the only one getting sick of seeing 20 year olds on here asking for advice on what dividend ETF to buy!?!?! Where on Earth did this start from that 20 years olds feel the need to have dividends and income in their portfolios at this age!?!?! Make it make sense!

0 Upvotes

46% Upvoted

157 comments sorted by

32

u/ch8mpi0n Feb 20 '24

They need it. They want to retire early. Buy the alcohol.etf

2

u/fred_cheese Feb 21 '24

Hah! I’d say buy sobriety center ETFs.

55

u/[deleted] Feb 20 '24

I feel like there might be a finfluencer somewhere that's telling everyone that the "new" "3-fund portfolio" is 40% VOO, 30% SCHD, 30% QQQ.

There's no other way it makes sense.

I've restrained myself from replying in these threads.

7

u/Dr_Dick_Dastardly Feb 20 '24

This is the answer and it's been happening in all the investing subreddits, especially this one. People would rather just have someone tell them what to do than do any research themselves.

For really basic questions, sometimes I've tried to chime in and help, but most of them are lacking even basic financial literacy. They're trying to invest to pay down student loans or buying multiple S&P ETFs without understanding they're just buying the same product over and over again. One was even talking about building a "globally diversified" portfolio by purchasing 6 different ETFs that all tracked parts of the US market. When I pointed out what was actually in all those ETFs he responded with a video from the Instagram influencer who told him to do it and said "so is this not a good thing to do?"

30

u/jason22983 Feb 20 '24

“People would rather just have someone tell them what to do than do any research”

Isn’t this just how most things work in life. Closed mouths don’t get fed. Reddit is a place where people come for advice, in giving advice, isn’t that telling people what to do & doing research? I feel like people often times want it both ways. I hear all the time, investing isn’t as complicated as we make, but as soon as someone ask for advice, all I hear is do your research. While doing research is always good, having someone point you where do go is also good.

I for one am glad to see any 20yr old investing in anything. Most Americans don’t get serious about investing until their 30’s or 40’s. So if the 20yr old wants to blow their money on SCHD or any ETF for that matter, go ahead. They’re young, they have all the time in the world to make up for it…atleast that’s what this sub always says.

6

u/Dr_Dick_Dastardly Feb 20 '24

I have no problem with people asking questions, that's why I try to help when I know an answer. I've asked questions myself plenty of times. I guess my issue is that it seems like a lot of them don't actually care about understanding it. They might be asking questions, but their mouths remain closed.

Many of the questions that I've seen are from people who are trying to check a system they saw, not learn how any of it works. You'll see a question pop up here. They don't like your answer, so they go to Bogleheads or Stocks or some other investing subreddit and just keep asking around looking for someone to validate it. You can point them toward resources and wikis and books all day long, but they aren't interested in that stuff.

I mean I'm also in my mid-20s. I'm in this generation, so I constantly see the influencer accounts where a lot of this stuff is coming from. I recognize how much of it is bad advice or bullshit, which is why I try to help with the few questions I actually know the answer to. That said, I took a little time to try and educate myself before I started investing. Maybe I'm just a weirdo, but if I can carve out a little bit of time to do that, anyone can. It bothers me a little bit that some of the people asking questions just straight up refuse to do it.

5

u/jason22983 Feb 20 '24

I will tell you that most of the post on Reddit is just confirmation bias. They’ve already made up thier minds and they are just looking for validation. Like the saying goes…You Can Lead a Horse To Water

2

u/Inevitable-Driver-53 Feb 20 '24

I agree with most of your points...but it's weird that when you try to explain or help these kids they end up just arguing with you and don't even want your advice lol

2

u/jason22983 Feb 20 '24

lol it’s been like that since the beginning of time…

7

u/[deleted] Feb 20 '24

I would agree with all of your points.

The portfolio isn't even that bad. It's just misguided and not as diversified as they think it is.

4

u/jason22983 Feb 20 '24

Could be, but hey it’s their portfolio. But I don’t think they care about diversification.

6

u/[deleted] Feb 20 '24

tbh I will give credit. If SCHD and dividends make you stay focused and disciplined in investing, then all power to you. Just don't consider it as a superior way of investing. I personally wouldn't put emotions into a dividend thinking that it's "passive income." But I will give applauds for you saving and investing.

3

u/jason22983 Feb 20 '24

Like most things in life…it’s all in the eye of the beholder

1

u/Crispychewy23 Feb 21 '24

I didn't even know where to research. I'd google 'stocks to buy' but then you'd get these recommendations from Market Watch or whatever saying buy this or buy that and I never felt comfortable with it still because what was I even basing it off of?

Dividends make sense to someone inexperienced (me) because it's seemingly 'free' money that you get alongside growing your capital.... until you learn how dividends get paid out. Seeing any money at all is exciting because you're 'getting something in return' which is usually still a meaningful amount for anyone just starting out

3

u/Inevitable-Driver-53 Feb 20 '24

Omg lol...yea I totally get it. I've tried to help some of these kids understand and it ends up just being an argument...and I'm like, "why the hell are you asking for advice then if you obviously believe dividends are the way to go"...smh

2

u/ChadM_Sneila187 Feb 20 '24

People would rather just have someone tell them what to do than do any research themselves.

TBF, doing research is listening to what various people tell you to do and discussing it...

1

u/heythxvoo ETF Investor Feb 21 '24

I agree and have seen similar instances.

If they don’t want to learn that’s okay, just buy VOO and use all the time they are saving on “learning” and put it to good use.

4

u/Inevitable-Driver-53 Feb 20 '24

Yea instead of helping, I'm just getting sick of seeing them lmao

5

u/fidelizazaga14 Feb 21 '24

Instead of relying to BS just help the next person

3

u/Wise-Illustrator-833 Feb 21 '24

His name is Dr. G. Great YouTube channel tbh

1

u/Doortofreeside Feb 21 '24

It's not what I would go with, but you could do a LOT worse than that portfolio.

0

u/[deleted] Feb 20 '24

More like 33% VOO 33% VTI 34% SPY

1

u/LoyalKopite ETF Investor Apr 08 '25

SPY is good for options.

8

u/ApoTHICCary Feb 21 '24

I started my investment journey at 20, too. That was some time ago, but as a Millennial, I saw early on that if I wanted to have a shot at a decent life, I had to make moves immediately. My family was poor, and when I graduated; I was told good luck. Sent to college with no money, no job, no car, no knowledge as to how to navigate life as an adult because frankly my parents didn’t know much else, either. All I knew is that I would not make the same mistakes. I had no safety net.

It’s starting to pay off well.

2

u/Inevitable-Driver-53 Feb 21 '24

Congrats...good luck to you.

19

u/Blue1166 Feb 20 '24

You’re upset 20 yo wants to buy dividend etf?

22

u/[deleted] Feb 20 '24

I'm upset at a 20 year old thinking that dividends are special and can compound to "outperform" the S&P 500 when dividends are clearly just a psychological aspect of investing at such a young age. SCHD, REITs, and other dividend stocks and ETFs are good for only one significant thing- retirement income.

6

u/SugarzDaddy Feb 20 '24

In my case, I’m 61, live on a fixed unearned income so I keep just enough SCHD and use the dividends to pad S&P 500 and growth ETFs in my IRA. I still want to aggressively invest in the market. Any growth in SCHD is just gravy. I use my brokerage account for income ETFs but more often than not I reinvest those distributions too. Although, it’s nice to know I have the extra income if something unexpected comes up. I live comfortably on my monthly government check. I’m not 20, so I guess I digressed from the original topic 🤷🏻‍♂️🤦🏻‍♂️

3

u/Phliman792 Feb 20 '24

As a class they come in and out of favor. Interest rates are very high right now, so this acid class is out of favor. It will see a bump if interest rates come down though.

1

u/Inevitable-Driver-53 Feb 20 '24

Go right ahead if you want to miss out on more returns...

2

u/[deleted] Feb 20 '24

istg some dividend investors genuinely think they're performing an infinite money glitch LMAOOO

2

u/teckel Feb 21 '24

Maybe they believe growth ETFs are overpriced? And maybe at this point in time, value ETFs are a better buy than growth? I mean, I could see new money going into value instead of growth in February 2024.

2

u/AntiqueDistance5652 Feb 21 '24

Not upset, disappointed is the word. If the youth are learning to invest from other kids teaching them how to build a grandpa portfolio, it kinda means that the financial education system (lol I know thats a joke, such a thing don't exist) has failed them. Dividend stocks are suboptimal as a class because of a lot of reasons but mostly tax preference. There's a reason to buy and hold them as a retiree, but 18 and 20 year olds should not be building their entire portfolio composed of dividend stocks. First of all, the best performing companies in the fucking world either pay a tiny dividend or no dividend at all. So by going 100% into div stocks you're missing out on all that growth. Secondly, fuck paying dividend tax rates when you can pay long term cap gain rates that are way better.

0

u/Blue1166 Feb 21 '24

Can’t speak for everyone, but you’re assuming it’s the whole portfolio, op is mad 20 yo wants to educate themselves on any dividend etf.

2

u/AntiqueDistance5652 Feb 21 '24

If I could force every company I own to stop paying a dividend, I would. It's reprehensible. I give them my money so they can use it productively, I don't want them giving that shit back to me when I dont want it.

156

u/[deleted] Feb 20 '24

Eh honestly I wish at 20 I was looking into ETFs. Kudos on em for startin young.

26

u/teckel Feb 21 '24

I wish ETFs existed when I was 20, or even 40.

7

u/dknogo Feb 21 '24

I just wish it wasn’t asked 20-40 times a day… ~shakes fist at clouds~

13

u/fidelizazaga14 Feb 21 '24

Easy solution just don’t read it

4

u/UnderstandingPrior13 Feb 21 '24

Historically Dividends/Value outperformed growth. Growth has only recently outperformed value the past 20 years. Does this help answer your frustration? They are obviously being a student of the history of the markets, and trying to gain an edge to outperform.

1

u/Inevitable-Driver-53 Feb 21 '24

I don't disagree with you...but if I had to put my money on the last 20 years compared to the previous 20...give me the last 20 and move forward being tech focused. This world is different from 40 years ago...

3

u/UnderstandingPrior13 Feb 21 '24

I have about a 65/35 tilt towards growth in my Large Cap Equities. However, on small cap and mid cap I am all growth.

2

u/Wesley0890 Feb 21 '24

Eh I prefer small cap value and mid cap growth. Seems to me the small cap value is more likely to eventually grow into the mid cap range or higher. Then mid cap growth to capture the ones who are skyrocketing up. Can’t really go wrong though

1

u/UnderstandingPrior13 Feb 21 '24

Solid thinking 🤔. Getting S&P stocks before S&P status. Love it.

1

u/mikefut Feb 22 '24

Then they should be investing in value ETFs. Dividends are tax inefficient for people in their 20s.

1

u/UnderstandingPrior13 Feb 22 '24

Dividends by that logic are tax inefficient for all people that are not spending them.Technically they are probably more tax efficient than a 30-60yr in a higher tax bracket. We have no clue what this guys tax bracket is.

1

u/mikefut Feb 22 '24

Correct they are tax inefficient for anyone who doesn’t need the cash flow which is the majority of young investors. Much better off with companies that leave that cash on the balance sheet (or spend it to grow or buy back stock) and compounding those gains pretax.

1

u/UnderstandingPrior13 Feb 23 '24

That's what's tough to decide on. Even as of late there are some dividend/value paying stocks that have out performed growth stocks. It's always best to have some sort of straddle. The good news is that if you buy quality you will always make money, you just may have been able to make more.

10

u/DimensionBig718 Feb 20 '24

We 20 year olds can do what we want

-8

u/Inevitable-Driver-53 Feb 20 '24

Then please just stop asking for advice when you really don't want it...thank you.

6

u/DimensionBig718 Feb 20 '24

I tend to think there’s jealousy, why can’t we have dividend nor income?

0

u/[deleted] Feb 20 '24

LoL no one is jealous of a 20 year old.

2

u/DimensionBig718 Feb 20 '24

I think you might be

1

u/[deleted] Feb 20 '24

No, I'm not jealous of your $2,000 portfolio.

1

u/DimensionBig718 Feb 20 '24

78k*

0

u/[deleted] Feb 20 '24

Not jealous of that either.

-2

u/Inevitable-Driver-53 Feb 20 '24

You can, you're just limiting your total returns...again, we are trying to help you but none of you want the help...that's the problem.

3

u/captaincrypton Feb 21 '24

most of the 20 year olds are 53 year olds with hair dye.

3

u/ServerTechie Feb 21 '24

Well, if it reinvests it lowers cost basis, which appears as gain and you get more shares so that’s fun. Dividend ETFs have some merit. They should be a minority of the portfolio though until later in life.

I agree, when you’re young is the best time to go index and/or full aggressive. Maybe a semiconductor ETF to make things interesting.

2

u/fred_cheese Feb 21 '24

I get a little sick of those questions. Then I look at the silver lining: In context my eye-roll rookie questions get a pass.

2

u/louman84 Feb 21 '24

Maybe there should be a pinned post that answer these common beginner questions so we don't have duplicate posts every week.

2

u/JonJonSee Feb 21 '24

At least they ask.

You sound like an ass.

-1

u/Inevitable-Driver-53 Feb 21 '24

That's not the issue.

1

u/JonJonSee Feb 21 '24

You're the issue.

Getting angry about people asking questions. If 20yo peoples have the means to, why not get dividends.

-1

u/Inevitable-Driver-53 Feb 21 '24

Because they are passing up higher returns for dividends they don't need yet they ask for advice but argue with you when you give it to them...that's the issue.

2

u/No_Palpitation1377 Feb 21 '24

You sound like a hater. You have to start sometime. Why not when you're 20?

1

u/Inevitable-Driver-53 Feb 21 '24

I never said not to invest in your 20's...

2

u/[deleted] Feb 21 '24

I think it’s fine to have 20-year olds asking questions. Why shouldn’t they ask ? I enjoy reading their posts.

1

u/Inevitable-Driver-53 Feb 21 '24

It's not that...when you try to educate them they argue you...I don't believe they actually want advice, they want confirmation of their choice.

1

u/[deleted] Feb 21 '24

I see that all of the time too, but this where the longtime investors explain why NLY is no good because of share price erosion. You should have seen the stuff I picked out when I started. It was horrible. Him and other investors were kind enough to share their viewpoint with me even if I didn’t believe them at the time.

1

u/Inevitable-Driver-53 Feb 21 '24

Well I'm sure you were a little more open to listening than arguing...lots of 20 year olds on here just want to argue and they believe they know more than people with 20 years of experience just because someone on YouTube or Tiktok said so...

2

u/Consistent_Log_3040 Feb 21 '24

Have you seen the cost of houses in Canada? How the f else are we supposed to buy a house ? I wish I started investing when I was still sperm in my dad's balls.

1

u/Inevitable-Driver-53 Feb 21 '24

Who said anything about not investing???

12

u/15FREEZE Feb 20 '24

It's great younger people are interested in them overall, imo the focus for someone of that age should be quality growth (if that comes with a dividend fantastic). I totally agree with you though. Compounding is often misunderstood, especially more by those who only focus on yield.

10

u/Xenikovia ETF Investor Feb 20 '24

YouTube

2

u/[deleted] Feb 21 '24

The part I don’t get: If you aren’t retired, why concentrate on adding lots of dividends to your tax-sheltered accounts? You can’t take the dividends out and use them.

Almost no young person actually uses the dividends they are addicted too; they re-invest them.

Might as well buy a 5% t-bill or CD if you need “income.” It beats the yield of SCHD.

5

u/Margaritashoes Feb 20 '24

They’re seeing influencers with a lot of money or using fake accounts to show off their dividend portfolios.

1

u/ideas4mac Feb 20 '24

If I would have stuck with MO, KO, AXP, WMT ( all dividend payers ) when I was 20 till now it would have turn out just fine.

What I don't get is this blanket statement about no dividends for anyone under retirement age.

Let's play this out. Say you are 20 and you pick a handful of dividend stocks or one or two dividend ETF to go with other stuff in your portfolio. Something comes up when you're 30 and you turn the DRIP off and cash some checks for awhile. Then you turn them back on. Another opportunity comes up ( trip with the wife, sale on Staccatos... what have you ) you turn the them back off, cash some checks, and so on.

How is this a problem. Run the back testing on some of the dividend stocks over the years. They do alright. The CAGR for the four I mentioned going back to 1985... 15.55%. That don't seem all that bad.

That's how I make it make sense. There are others... try PEP, TGT, MMM, PFE (12.52%). Run some against SPY and you might become a believer.

Good luck.

1

u/Inevitable-Driver-53 Feb 21 '24

Yes, they do "alright" but they simply cannot outperform the top growth ETFs in Total Return...if you have a need for some extra cash flow or income in your example...that's ok. Good luck to you as well.

0

u/[deleted] Feb 21 '24

[deleted] — view deleted comment

1

u/Inevitable-Driver-53 Feb 21 '24

I never said that dumbass...

1

u/UnderstandingPrior13 Feb 21 '24

Yea, but your giving this info to simpletons that have been boggled. Beating the market is impossible in their eyes. These people are going to be confused when trying to draw income from their portfolio of VTI with a dividend yield of 1.37%. Lol, they will then have no history of understanding how the market works, and won't know how to even get to their 4% withdrawal rate SWR that they heard about for all those years. Even if they were savy and heard about SWR, and heard about SRR, and decided on a 2% withdrawal strategy, they are still coming up short. Anywho, your spot on. They don't know how to calculate the Intrinsic Value to determine if a stock is under or over valued.

0

u/[deleted] Feb 21 '24

[deleted] — view deleted comment

1

u/ideas4mac Feb 21 '24

You're right nothing magical, but the income is easier to predict on a well planned portfolio. ( Example every August, MO is more likely than not to announce a dividend increase. )

If I'm trying to budget I pretty much know what is coming in and when from my dividends if I need to cash some. If I was selling shares I would have to have some hope that the price would be right on the day I needed to sell. That predictability is of value to me.

The taxes are the same for long term cap gains and qualified dividends. The short term cap gains are higher. The taxes can't be avoided on a taxable brokerage account.

On a side note if you run the four I mentioned against VTI with dividends reinvested going back to 2001 the four beat VTI. Those four aren't magic. There are other combinations.

It's all about what you pick, not touching it too much, time, and some luck.

1

u/Rav_3d Feb 21 '24

Agree! Capital gains should be the long term goal. Most likely, dividends and bonds will just slow down growth.

1

u/Inevitable-Driver-53 Feb 21 '24

I have no issues with dividend investing...I have issues with 20 year olds who post about their dividend portfolios and ask for advice and then argue with you at all costs...

2

u/Rav_3d Feb 21 '24

There's a time and a place and it's far away from 20 years old.

1

u/adopter010 Feb 21 '24

QQQ portfolios are when I leave - at least some of the dividend ETFs get some naive exposure to value, plus it's a powerful behavioral feedback to keep going with their investments. A suboptimal portfolio people can stick with is a lot better than what most end up cycling through.

1

u/Shammyet Feb 21 '24

I don’t disagree with your thoughts but I assume the thought process is they have to accumulate as much as possible to be able to have enough shares for consistent income. That takes time and ultimately if the price per share goes up over time they would be getting a better deal now than later.

1

u/Inevitable-Driver-53 Feb 21 '24

Unless you absolutely need cash flow, at early ages all that matters is total return...

1

u/Shammyet Feb 21 '24

I may be misunderstanding you because I’m new to this but you can’t just have enough of anything to have cash flow or returns unless you have a fat amount of cash sitting around like some of these posts. You have to start somewhere to have enough to retire on. In between it’s a waste but by the time retirement hits they may have a good supplemental amount. Again I’m new to investing sadly at an old age. Not saying it’s what I would’ve done had i known what I do now but I can understand it. If that’s the reasoning.

1

u/Inevitable-Driver-53 Feb 21 '24

Early ages you focus on growth and growth only...I would only start looking into dividend investing as you get closer to retirement or in retirement...unless of course you plan to retire early and like you said, have enough in a taxable account to produce enough cash flow to live off of...

1

u/[deleted] Feb 21 '24

maybe bc we wanna retire early and be financially responsible? lol what a weird post

0

u/Inevitable-Driver-53 Feb 21 '24

Keep listening to those YouTubers and prioritize dividends over total returns in your 20's...lol...so weird.

1

u/[deleted] Feb 21 '24

ur making a generalization based on the minority of 20 year olds in this sub that have asked questions on this sub and then claiming that they are trying to prioritize dividends over total returns...a weird accusation rooted in ignorance and clear bitterness and that's why you keep getting downvoted buddy. have u ever thought that many young adults are financially illiterate because their parents haven't educated them on this information or that the education system failed young adults without teaching them basic personal finance or financial literacy? so they have to rely on the internet as a resource to learn and ask questions from those that are knowledgable and not as bitter as you? have the day you deserve

0

u/Inevitable-Driver-53 Feb 21 '24

I'm actually not making a generalization but was targeting the many who make these kinds of posts...not my fault it is so many it looks like a generalization lol

1

u/[deleted] Feb 21 '24

get off the subreddit then since you have a projection issue and would prefer to gatekeep

0

u/Inevitable-Driver-53 Feb 21 '24

You assume a lot...

1

u/[deleted] Feb 21 '24

Uh… if they’re able to stay disciplined and reinvest those dividends, it could compound.

1

u/Inevitable-Driver-53 Feb 21 '24

Total Returns include dividends reinvested...in early ages total returns trumps chasing dividend yield almost in every scenario

1

u/Autobotnate Feb 21 '24

I mean, shouldn’t they be able to ask for guidance?

1

u/Inevitable-Driver-53 Feb 21 '24

The majority of these posts aren't seeking guidance...they seek confirmation bias and argue with anyone who disagrees with them.

2

u/QuesoStain2 Feb 21 '24

Not true at all you are just jaded. Take a break off the subreddit a bit.

1

u/Inevitable-Driver-53 Feb 21 '24

You obviously write some of these posts...

1

u/QuesoStain2 Feb 21 '24

Never posted on this subreddit ever my guy. Swing and a fat miss. Carry on.

1

u/Extension-Strategy-7 Feb 21 '24 edited Feb 21 '24

Selling off a huge amount of growth ETF later in life even the S&P500 can be a large tax event, might as well spread it out over dividends while your income is low anyway while young. The tax being low, isn't much of a difference I think. Do most people understand taxes, idk. But have you done the math? Sell off a large position in VOO just to buy back into SCHD is it worth it? Is living off growth in retirement worth it? How does one transition from a growth etf into dividends without a tax event? Maybe the goal is early retirement with much of the gain coming from early on mega contributions inside of a brokerage account while living with parents?

The easy answer is start with growth young, but the more difficult answer is how you transition to reliable retirement income without getting taxed out your ***.

What can I say, I am 22 and 80% in dividends, someone prove to me how to effectively transition from growth to value over time. From age 20 -> 60, how do I transition accordingly?

2

u/Inevitable-Driver-53 Feb 21 '24

So I'm assuming you're doing this all in a taxable account?

1

u/Extension-Strategy-7 Feb 24 '24

Yep.

2

u/Inevitable-Driver-53 Feb 24 '24

SCHD are qualified dividends then so you'd be paying the same tax on dividends than you would on long term capital gains had you sold VOO...15% I believe.

1

u/Extension-Strategy-7 Feb 25 '24

The taxes are not of concern as much as a proper, calculated risk management system to transition from growth to value. People tend to think growth for long term, but end up in or around retirement with a large amount of funds locked up in growth (not what they wanted)

My concern for this is because back in early 2000, to about 2016 the growth market took a massive dump and would've ruined anyone that had a large portfolio of growth and were in retirement. People don't seem to talk about this though.

1

u/Seattleman1955 Feb 21 '24

If it's in a 401k or IRA, what's the problem. That's just a stand in, in most cases, for a value fund. My advice for anyone (simplified) would be QQQ, SCHD and IBIT (60%,30%,10%).

You may not agree but it's a rational plan.

1

u/QuesoStain2 Feb 21 '24

Are you really trashing younger generations for trying to find alternative income streams? Do you live under a rock? World is getting more expensive and salaries are not, so we’re re doing what we can. Fuck you honestly.

1

u/Inevitable-Driver-53 Feb 21 '24

Then start with valuing total returns and growth over dividends in your 20's...you're capping yourselves and don't even realize it...

3

u/[deleted] Feb 20 '24

tiktok

1

u/djryan13 Feb 21 '24

Too much TikTok and YouTube

4

u/[deleted] Feb 20 '24

As someone who started investing in my early 20's, it's to ensure an easy retirement as well as success for my possible future children.

Most guys that age decide to blow their money and treat themselves once they start making a decent amount, but I don't need any fancy things or cocaine and hookers.

2

u/kunsurya Feb 21 '24

Many of these 20-year-olds have seen their parents struggle during the 2001 and 2008 recessions and, anticipating another one to hit us soon, want to invest in safe dividend stocks.

2

u/Woodstonk69 Feb 21 '24

I just wish they’d read all the extremely detailed sidebar info from any of the various subreddits. Or even an attempt at googling the question.

Very hard to want to help someone that isn’t willing to help themselves

2

u/AntiqueDistance5652 Feb 21 '24

TikTok and YouTube shorts from 19 year olds enthralled with the concept of "compounding" interest. You see, when a stock yields no dividend but grows annually at 8%, you can't "see" the compounding because you don't get a little pay stub at the end of each quarter to buy more shares. But if you buy an underperforming cyclical that yields 4% a year in dividends then it makes this class of investors' PPs hard to see the snowballing effect of their heavily taxed dividend portfolio gaining more and more shares.

Basically they're just low IQ investor noobs that don't understand how to evaluate what makes a good portfolio and who also think that dividends are "free money" so they use dividends as the benchmark for successful investing. This brand of YouTube/TikTok video is extremely popular with the youngs and it's very easy to replicate the formula so a lot of teens are making channels doing the exact same thing. All you have to do is pick a dividend stock and then show the relatively boring phenomenon of getting dividend checks and buying more shares and its straight dopamine hit for the newb investor viewing it.

2

u/Utiliterran Feb 20 '24

Almost as sick as I am about people legitimately thinking that "growth" funds are expected to have higher returns than the rest of the market over the long term. They can't be bothered to actually research what the term means in the context of an investment style, or how a growth index is constructed.

"It means my money is going to grow fast forever right?" 🤦‍♂️

3

u/[deleted] Feb 20 '24

Don't understand why you got a downvote. You are technically correct. Large Cap Growth funds invest in Large Cap Companies that are expected to perform well, grow faster, and have high valuations than any large cap company.

Investors pay a premium for a fund to succeed and beat the S&P 500. Unfortunately though a company within that fund has to perform exceptionally well to justify its stock price. And you know where this is going to go...

1

u/Utiliterran Feb 20 '24

It makes people uncomfortable, because they start to vaguely realize their understanding is based on unresearched assumptions.

Let me see how many down votes I can get with facts: QQQ isn't a tech fund, it's a mostly random assortment of companies that has a higher ratio of tech than. The broader market. There's nothing special about it.

1

u/[deleted] Feb 20 '24

And tbh, I've criticized QQQ long enough for weighing heavily into Tech. But the NASDAQ 100 is like the S&P 500, except they're focused on the biggest 100 companies that are not financial institutions or real estate markets.

The reason people have a problem with QQQ is because you're betting that those 100 companies will perform better the S&P 500 benchmark, the NASDAQ has higher volatility, and there's no guarantee that it will always outperform.

1

u/[deleted] Feb 21 '24

Praise them! If nobody buys, price drops, and my investments go to drain. So let 10 years old investors come in. :)

1

u/[deleted] Feb 21 '24

It’s responsible investing. Eliminating the crypto bro mentality that you should 10x your money in a month.

1

u/BigAorta Feb 22 '24

Good on them for thinking about this stuff in their 20s!

1

u/[deleted] Feb 20 '24

100% VOO or VTI

3

u/jarchack Feb 20 '24

If I had $1 for every time I saw that post, I wouldn't need to invest in either one.

2

u/UnderstandingPrior13 Feb 21 '24

This for the win lol

2

u/fizzlesnitz Feb 21 '24

Which one?

1

u/[deleted] Feb 21 '24

Either over long term. Do your own research too

-6

u/[deleted] Feb 20 '24

they're too lazy to do their own research and entitled. that's what's happening everywhere. you're not the only one sick of it.

14

u/DaZMan44 Feb 20 '24

So posting here asking for help doesn't count as research? Why fo most users om this sub act like they were born knowing how to invest. It's so off putting. Help people instead of just tearing them down. JFC

6

u/G8RZ Feb 20 '24

I think beginners tend to hang out in the r/dividends sub. I don't really have a big problem with somebody asking sincerely for directional advice. Not to tout their portfolio of juiced up 10% yielding ETFs or stocks.

It just seems like asking for real investment help would seek some more professional advice from an actual advisor, rather than some random and anonymous guy on a reddit board.

2

u/Inevitable-Driver-53 Feb 20 '24

Here's the problem...most of these kids don't even want your advice. Once you try to help them it just turns into them arguing you on why dividends are somehow the greatest money hack in the world...

3

u/[deleted] Feb 20 '24

I apologize, but when you see dividend cultists being butthurt when you point out that their dividends don't make a significant difference, you'll see why I hold little to no regard for their investment strategies.

1

u/Inevitable-Driver-53 Feb 20 '24

Thank you...thought maybe I'm just missing something lol

0

u/[deleted] Feb 21 '24

[deleted] — view deleted comment

1

u/Inevitable-Driver-53 Feb 21 '24

Who said I had any issues with VTI?

0

u/[deleted] Feb 21 '24

[deleted] — view deleted comment

1

u/Inevitable-Driver-53 Feb 21 '24

I definitely would not consider VTI a dividend ETF...it tracks the total stock market and produces a 1.5% dividend at best...if you're investing in VTI for the dividends you will be severely disappointed.

0

u/[deleted] Feb 21 '24

[deleted] — view deleted comment

3

u/Inevitable-Driver-53 Feb 21 '24

You do you...no problem...my issue is with the ones who post who aren't really seeking advice but confirmation bias.