The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: BleakWizard on November 03, 2016, 12:50:09 AM
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There are a few stocks that give a good monthly income, finding out such stocks is a pain. I created this thread to find them at one place here.
Any views anyone??
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I have a position in an ETF that sells covered calls on the NASDAQ 100 and pays a monthly dividend that runs from 0.5% to 1.0% of my position (dividend is higher in months when the NASDAQ is down). Symbol is QYLD.
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http://www.dividend.com/dividend-stocks/monthly-dividend-stocks.php
This is a list of the 752 stocks which currently pay monthly dividends.
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There are a few stocks that give a good monthly income, finding out such stocks is a pain. I created this thread to find them at one place here.
Any views anyone??
O is a popular one with a decent dividend amount.
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Most monthly dividend paying securities are exchange-traded and closed-end funds. A lot of these are leveraged bond funds and alternate investment funds such as Tall Texan's.
I haven't seen many compelling reasons to own these funds. Many have high yields driven by leverage, but the owner bears the cost of the leverage. This is why many have management fees over 1%. My experience watching these only goes back about 5 years, but most weren't around before then anyway. They did well during periods of QE and lowering interest rates. However, as soon as QE ended they started cutting distributions and prices and income tanked.
I love dividends as much as anyone on here. My only monthly payer is Realty Income. Instead of complex funds that I cannot understand, I own a quarterly paying low cost dividend fund, VYM, and a basket of profitable companies that sell actual goods and services and pay a quarterly dividend. My combined portfolio of holdings pays dividends every month.
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Limiting yourself to stocks / funds that pay monthly is unnecessarily limiting, with no real benefit. You will be better off focusing on expected total return than dividend / distribution payment frequency.
Most stocks / funds pay out on a quarterly, biannual, or annual basis. You shouldn't be relying on stock dividends or fund distributions to get by on a month-to-month basis.
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You shouldn't be relying on stock dividends or fund distributions to get by on a month-to-month basis.
What? Why not??!
If one builds a portfolio that generates enough income to pay all expenses, why shouldn't that person rely on the distribution?
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If Cottonswab is saying that you can't just hoard your cash from quarterly dividend payments to last for your expenses, well, what could be more mustachian?
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There are a few stocks that give a good monthly income, finding out such stocks is a pain. I created this thread to find them at one place here.
Any views anyone??
O is a popular one with a decent dividend amount.
It is good, but I still think it's a little pricey. If it gets down to around $50 I might consider adding more to my position.
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There are a few stocks that give a good monthly income, finding out such stocks is a pain. I created this thread to find them at one place here.
Any views anyone??
O is a popular one with a decent dividend amount.
It is good, but I still think it's a little pricey. If it gets down to around $50 I might consider adding more to my position.
I own about 1000 shares of O. It had no business getting up to $72/share. If I wasn't so disgusted by paying voluntary taxes, such as capital gains taxes, I would have sold out completely at $60, $65, $70 and $75 if it had made it. Take about $10 off the current price and I might buy some more.
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Investing in something for the monthly dividends is dumb
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You shouldn't be relying on stock dividends or fund distributions to get by on a month-to-month basis.
What? Why not??!
If one builds a portfolio that generates enough income to pay all expenses, why shouldn't that person rely on the distribution?
Relying on dividends / distributions to to fund expenses is fine. However, if you have at least 6 months of expenses saved, then why would you exclude investments that offer a better risk-adjusted return, but pay quarterly, biannually, or annually? You should be able to fund your living expenses with cash reserves, until the payment comes in, regardless of the payment frequency.
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I agree, yes to dividend paying stocks, no to limiting to monthly paying dividend stocks.
VGK is a vanguard europe etf which has 2,200 stocks and pays 3.6%.
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You shouldn't be relying on stock dividends or fund distributions to get by on a month-to-month basis.
What? Why not??!
If one builds a portfolio that generates enough income to pay all expenses, why shouldn't that person rely on the distribution?
If one builds a portfolio large enough to pay one's expenses with dividends alone, that person likely spent more time working and saving than necessary. Pretending that it's not okay to sell appreciated shares to pay part of your bills in addition to dividend payments is being overly conservative, to put it mildly.
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SDIV - a global ETF of high paying dividend stocks. If I recall correctly it has around 8% dividend yield.
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I agree that a focus on creating dividends for expenses will reduce total return. Dividend-payers just don't grow as fast.
But the problem with needing to sell each month is that you have to choose what to sell and when. You might choose wrong.
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The Dividend vs Total Return argument has been beaten to death on these forums. Total Return won.
Dividends are mathematically equivalent to selling stock, before you factor in taxes. After you factor in taxes, dividends are much less efficient:
(http://i.imgur.com/XolyHHT.png)
If you are limiting your portfolio to only dividend payers, you're adding risk, for no expected reward, resulting in a less efficient risk-adjusted portfolio.
If you want a monthly paycheck from your investments, login to Vanguard, and tell them to send a monthly paycheck from your investments:
(https://i.sli.mg/YfnDdE.png)
Seriously, just stop.
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Seriously, just stop.
Nope. Your person A still owns 100% of her shares. Person B just liquidated 10%, leaving only 90% left. Person B had better hope that the shares continue to appreciate, because otherwise he goes broke after 9 more sales.
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Seriously, just stop.
Nope. Your person A still owns 100% of her shares. Person B just liquidated 10%, leaving only 90% left. Person B had better hope that the shares continue to appreciate, because otherwise he goes broke after 9 more sales.
the same logic applies to a dividend. the dividend liquidated 10% of the value of the shares, if the stock doesnt appreciate then person A will also be broke after 9 more dividends. do you not understand how a dividend works? its not magic money from la la land. its value of the company distributed to share holders in cash.
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the same logic applies to a dividend. the dividend liquidated 10% of the value of the shares, if the stock doesnt appreciate then person A will also be broke after 9 more dividends. do you not understand how a dividend works? its not magic money from la la land. its value of the company distributed to share holders in cash.
I can tangibly assess a company's profit, dividend, payout ratio, yield, and payout history to know if it will continue to make the quarterly payment. I can't do that with supply and demand of a stock. Supply goes up and down as a company issues new stock or cancels shares. Demand is all over the map. Sometimes it's in vogue, other times it's despised. The same can be said with an entire index--sometime stocks as a whole are despised.
Or it's magic money from la la land.
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i know why interest compound got mad and said just quit now ... i'm out ... as ron white would say ...................... (fill in the blank)
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I can tangibly assess a company's profit, dividend, payout ratio, yield, and payout history to know if it will continue to make the quarterly payment.
You can? 100%? Impressive! I presume you see [dividend cuts] before anyone else so you can sell out before the stock plummets? Otherwise it's not worth much..
Edit: missing words
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I can tangibly assess a company's profit, dividend, payout ratio, yield, and payout history to know if it will continue to make the quarterly payment.
You can? 100%? Impressive! I presume you see this before anyone else so you can sell out before the stock plummets? Otherwise it's not worth much..
Who said anything about selling before a plummet? You bolded the wrong thing. I said "quarterly payment" not a rise or fall in the stock price. I don't give a shit whether the price goes up or down.
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I can tangibly assess a company's profit, dividend, payout ratio, yield, and payout history to know if it will continue to make the quarterly payment.
You can? 100%? Impressive! I presume you see this before anyone else so you can sell out before the stock plummets? Otherwise it's not worth much..
Who said anything about selling before a plummet? You bolded the wrong thing. I said "quarterly payment" not a rise or fall in the stock price. I don't give a shit whether the price goes up or down.
Sorry, some of my reply was lost. Can you see when the dividend will be cut before everyone else? What do you do then, sell? Presumably so do a lot of others..
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Ginnie Maes pay out monthly. But it's not quite a stock...
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The Dividend vs Total Return argument has been beaten to death on these forums. Total Return won.
Dividends are mathematically equivalent to selling stock, before you factor in taxes. After you factor in taxes, dividends are much less efficient:
(http://i.imgur.com/XolyHHT.png)
If you are limiting your portfolio to only dividend payers, you're adding risk, for no expected reward, resulting in a less efficient risk-adjusted portfolio.
If you want a monthly paycheck from your investments, login to Vanguard, and tell them to send a monthly paycheck from your investments:
(https://i.sli.mg/YfnDdE.png)
Such a direct explanation of why total returns > dividend chasing. Thank you, saving to reference later.
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But that example assumes the dividend stock will decrease in value. This clearly is faulty logic because dividends are magical fairy dust that do not dilute the value of the company in any way.
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I have read many of those forum articles about dividends versus total return (not all). What I didn't see addressed is that receiving the dividends keeps you from panicking and selling at the wrong time. How would you assign that a premium in the discussion of comparison with total return?
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I have read many of those forum articles about dividends versus total return (not all). What I didn't see addressed is that receiving the dividends keeps you from panicking and selling at the wrong time. How would you assign that a premium in the discussion of comparison with total return?
Do you have a citation for a study or anything leading to make you believe that?
I think people hear the market is crashing, they look at the value of their portfolio, and they sell. The fact that they maybe got a dividend a few months ago, or will get one a few months from now, or whatever, doesn't drastically affect that compared to the constant news barrage screaming the world is ending.
And if you're intelligent enough to have researched market psychology, you hopefully will be taking advantage of the crashes, not panicking. So dividends shouldn't make a difference there either way.
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Indeed this is a fair ask. With no prior knowledge of such studies, I've been working google (searching for things like "dividend investing behavioral economics") to see if something might materialize.