Put Down the Dividends and Slowly Back Away

Investors love dividends. The idea of having money deposited into your account on a regular basis can be a very attractive one. As a result, dividend-based investment strategies have become very popular. But the reality of dividend-based strategies is often very different than what the marketing behind them would lead you to believe. In this episode, we examine the reality of dividend focused investing strategies and look at whether investors might be able to accomplish their goals more successfully with other approaches.

  • 0:35 – Why do investors love dividends so much?
  • 03:08 – Why do companies prioritize paying dividends over other capital allocation choices?
  • 04:16 – Long-term investing returns and dividends
  • 07:34 – Dividends as a less than optimal value metric
  • 09:28 – Dividends, buybacks and capital allocation
  • 11:31 – Dividends as a quality metric
  • 15:34 – Good and bad buybacks
  • 18:18 – Pay the dividend at all costs
  • 20:38 – Synthetic dividends as a dividend replacement and taxes
  • 26:07 – Synthetic dividends and retirement accounts
  • 27:17 – Dividends compared to other types of cash flows

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Originally Posted August 30, 2023 – Put Down the Dividends and Slowly Back Away

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