20: Dividends. The Rubbish Retirement Income Strategy

Caleb and Riley discuss a popular ‘dividend income’ investing strategy. Dividend invests has many allures, like the ability to live off your dividends, and participate in both dividend income and growth of the shares. Some may feel dividend paying companies are the most stable and growth oriented companies. But what does the research say about this? With many years of stock market data and peer reviewed research let’s find out. Learn more about:

• The research and data behind dividend investing strategies and why it was never meant to be an income strategy for retirees.
• The “free dividend fallacy” and why the dividend-only investing for retirement income is romanticized and is a non-sensical strategy
• The reasons to avoid dividend stock picking, and why it moves you towards a rubbish retirement

Memorable Quotes:

• “ In addition to being inefficient for portfolio construction, dividends allow retirement consumption to be directed by corporations rather than tailored to the preferences of each individual.”
• “To the extent that a dividend focus results in a tilt away from smaller companies, dividend investors may be missing out on expected returns.”

Resources:

• The Case Against Owning All Dividend-Paying Stocks in Retirement
• The pros and cons of dividend investing

Hosted by Caleb Miller and Riley Anderson of InvestorDNA Meet Caleb and Riley Book a Call Subscribe on Apple Podcasts Subscribe on Spotify Subscribe on Google Podcasts