Comments by "JP 72" (@739jep) on "Why Income Investing Will Not Give You Income | Common Sense Investing" video.

  1. What are you talking about ? It aged really well?
    3
  2. This video is gold and by the sounds of it may benefit you if you watch it again and understand what’s actually being said. Dividends don’t matter when it comes to selecting stocks. That doesn’t mean that they arnt an important component of total returns - it just means that the dividends arnt responsible for driving returns total returns. They’re just a method that capital is distributed to the investor and which method is chosen ha no bearing on the amount of capital that can be returned to you. I’m not sure how you argue against that if you’ve actually seen the data. This is pretty strongly supported in the academic literature. It’s hardly bullshit. Although I could understand why you’d think so if you hadn’t come across the data or the theoretical papers. Dividends can feel like free money and there is a lot of room for cognitive basis - but in fact there are five factors that explain most of the total returns of stocks - dividends are not one of them. This video even states that dividend paying stocks are an important part of an investors portfolio. It’s just that a dividend focussed portfolio is less less diversified , tax inefficient and less able to capture the risk adjusted returns of the market. This video is not saying that, for example , that there arnt behavioural implications of targeting dividends that may benefit the investor - such as they may be more willing to hold long term and avoid market timing. But after recognising this couldn’t an investor simply correct for this behavioural bias. Then they could invest more broadly (focusing on dividends reduces diversification) and target factors that actually drive returns such as market beta, size and value + others.
    2
  3. It’s the data that does that
    2
  4. Here’s your medal 🥇
    1
  5. It seems like you completely missed to point? Dividends are an important part of calculating total returns , but if they were not paid you could expect capital to be returned to investors in the form of capital gains instead - dividends do not impact total returns they are just a component of them. The 73% percent figure you use wouldn’t disappear if those dividends were never paid , the market would have just returned that through appreciating share prices instead. The reason dividend tracking index’s outperform the market is not because they pay dividends, it’s because they get exposure to other risk factors such as value and profitability. You might think that makes it fine to concentrate on dividends as you get exposure to factors that drive returns by accident , however by excluding stocks that have exposure to these factors AND don’t pay dividends you are reducing the diversification of your portfolio and thus decreasing the reliability of capturing the value and profitability premiums.
    1
  6. This channel is the best on YouTube when it comes to financial advice and it’s not close. If you truly believe what you said then perhaps you should reconsider your entire perspective on investing 😂
    1
  7.  @enonknives5449  you’re aware that this is precisely what is taught in every finance degree everywhere? This isn’t controversial, it’s mainstream. Perhaps to work out where he ‘goes off the deep end ‘ I’d need to study less not more ? 😂
    1
  8. The irrelevance of dividends doesn’t mean that share prices MUST decrease on the ex dividend date - there are lots of things that affect the price not just the dividend being paid, that’s why it’s difficult for a lot of dividend investing proponents to believe. However you can expect to be no better off in terms of total returns, that is, if the price did rise then if the dividend wasn’t paid you could expect it to have risen more. For example a share worth $100 may pay $2 dividend per share. On the ex dividend date some positive earnings news is released and the stock rises to $103. If the dividend was paid the investor would have $2 paid to him as a dividend and $3 in capital gains ($5 total gains). However if the dividend was not paid the investor would have $0 paid to him and $5 in capital gains (you could expect the stock price to rise to $105 instead of $103) When a large cross section of dividend paying companies is analysed , over a period of timing (so that you can filter out the noise of other things affecting the price) this is demonstrated to be exactly what happens.
    1
  9. He’s not saying you should time the market. He’s also not saying to focus on growth stocks
    1