The TRUTH About Dividend Investing - Are Dividends IRRELEVANT?

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Today we'll cover the argument that stocks drop when dividends are paid and answer whether dividend investing is a good strategy for the long term.
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[@beaviswealth]

📈Join The Investing Academy ➤ bit.ly/theinvestingacademy 💮Blossom Social (See My Exact Portfolio & Trades) ➤ getblossom.page.link/brandon What do you guys think about dividend investing? Leave a comment down below! Thanks for watching :)

[@MurrMan23]

The share price also tends to drive up before the dividend is paid. So it almost cancels out the argument that share price drops after paying dividends.

[@surreycase]

I'm 54, sold my place and put most of it into dividend stocks to retire earlier in the Philippines. Am I crazy?

[@alexandernobre6450]

Good for you, better to enjoy life then work.

[@Northern_Squirrel]

Absolutely not, investing is a personal choice and there is no right or wrong strategy as long as your total return is decent. Good thing about your strategy is you are enjoying life in retirement and not watching the ups and down while collecting regular dividend to pay your bills. On the flip side, assuming you are invested in dividend paying companies 4-6% range limits your exposure to mainly financials, utilities, telecom and energy sectors and missing out technology, healthcare etc. again, getting 4+ dividend and low single digit growth give you high single digit annual growth. That’s pretty darn good in retirements. Congrats on your retirement and enjoy life.

[@alexandernobre6450]

@@Northern_Squirrel the right choice is to retire and enjoy your life. Working is for a sucker. If I knew about this at 16 I would have more than enough to be retired at 33 now. But only learn of this type of income 1-2 years ago. Even though I made other choices and can easily sell them off and re invest into dividend now and retire easily. But having multiple sources of income now is needed. Once my dividend are high enough me and my family will never have to work again. Including my kids. They will learn how to have an easier life than me and do even better than me.

[@surreycase]

@@Northern_Squirrel thank you so much for your feedback, reassuring.

[@emng161]

Follow Passive Income Investing on KZbin.

[@acdatz6222]

When dividends are paid out you are just "realizing" the gains every month/quarter. The only way to get your gains from a growth stock is to sell the stock.

[@TheJoaninhaMendes]

Exactly

[@TheKYLE323]

Divideds are great for long term investing, I have constant cash flow coming in every month to buy more shares, I don’t have to sell stock to get cash, compounding dividends are how you retire early and really grow your wealth. I can’t bring myself to buy a stock that doesn’t pay a dividend.

[@MrProfdeChimie1]

Hi ! Thank you! What is the source of the image at 16:18 ?

[@chrisevans7416]

Ok 2000 a year from enbridge ,my gas bill 1200 a year , free gas and up 800. BMO 1600 a year , TD 1400 a year, BNS 1000 a year I could go on . 5000US a year in dividends I own 42 dividend paying stocks, paying over12k a year

[@fuse98]

What's your reasoning behind being in 42 stocks? That seems a bit of over diversification to me.

[@shanepereira9433]

@@fuse98 I have 51 dividend paying stocks. The main idea is if something happens to a few of them I am still able to continue living off my dividends. I just spread out my investment amount equally among all my stocks.

[@chrisevans7416]

@@Mitch-ui8ps Ah jealousy insecure , I bought it @37 and I 'm 60 and have 1.5 million in the market 600k of that is outside of RRSP which brings me 30 k ontop of my 125 k salary ,oh and my house was paid off at 41 over another 1 million .I have maxed out RRSP since I was 22 you little shit

[@MountainFinance]

Great breakdown. Total Return stocks are my favourite ;-)

[@momo35444]

great video Brandon! I love my dividend stocks!!!

[@Carol8693]

As always, Another great presentation :) thank you for showing us

[@sridharv3903]

The dividend vs reinvesting decision is not mutually exclusive. You explained well to show the contrast however it's important to remember there are several companies which do a combination of both meaning x% pay out as dividend y % reinvest. Some pay more dividends and reinvest the rest, while some do vice versa and some balanced either way. If we add a third dimension buy back it there is a third option where company's board decides to buy back or repurchase stock. Investors who need liquidity or those that are conservative may prefer dividends.

[@fhuzpatch]

When trying to make a balance portfolio (not everyone wants to run a balance portfolio, I get that), Dividends make it nice to allow you to choose which parts of your portfolio to put the extra cash. Rather than potentially having to sell some stocks on one end to add to the other end you can use the cash to beef up those on the lower end to get them closer to those that were performing better. You may still have to sell some stocks to rebalance, but the more cash you have to rebalance with initially (including newly added cash) the more likely it becomes that you may be able to get by with not selling the higher end ones.

[@CanadianDividendInvesting]

Some great points here, thanks for sharing Brandon!

[@Northern_Squirrel]

Awesome video Brandon, your explanation is perfectly clear and well done. I do believe in a hybrid approach to investing, allocate TFSA for mostly growth, RRSP for US dividend payers, fixed income and even some growth stocks and holding exclusively Canadian eligible dividend payers within non registered for taking advantage of preferential tax treatment and regular income. Keep up the great work.

[@brucecampbell7347]

Very good discussion and a clear and concise video on how dividends work.

[@carolnavan4137]

Very educational. Thanks

[@captaincolt8886]

Lots of good points … well done

[@Rob-ob3sh]

What I like about dividends is you are receiving a realized gain and not having to sell your shares to realize your gains. If your sitting on non dividend paying stocks your only gonna realize your gain when you sell your shares as you only have a paper gain until you sell.

[@Brownbeltforever]

Isn't it a realized cash gain and lower stock price by the exact same amount? It's the same as selling that amount of stock to cash except you don't choose - they do it for you.

[@alleycat8675309]

very timely. Thanks :)

[@itz.mariavicz]

The chart really sealed it for me! This was awesome! Thanks Brandon :)

[@jasonb7865]

I think the unsophisticated dividend bonus money concept is from the board game Monopoly that they've played for years. "Oh bonus, bank pays a dividend, SWEET... BONUS DUUUUDE, we're soooo gonna party"

[@theabstract4936]

Can you do a video on holding companies

[@ryanm7171]

Another pro for lower-income Canadians is that the income derived from Canadian dividend companies has no or much less tax than ordinary income or capital gains.

[@dalesiemens]

What would you consider to be the most popular compalies in Canada for paying a dividend

[@donzkietv168]

TD, FORTIS, BCE, RY, CNR these are giant companies been through a lot of recessions but still strong whatever happens to the market they keep giving dividends and capital appreciation...

[@alminci6622]

WELL DONE!!!

[@TeeJayAwrekaOA]

Love this dude, very well said

[@ambitiousunderdogz482]

Great video. What are your thoughts on a dividend ETF like VYM where (if you buy at the right valuation) you will get both stock price appreciation as well as a 3% plus dividend yield?

[@coldbrewkelly9817]

Hi Brandon, it's Kelly. Hope you're well since we've met at the Investing Academy meet-up! This video definitely covered a lot but the format used to organize the main points allowed me to follow easily. I personally do like these debunk stereotypes and assumption videos so can't wait to see more if that's in the planning! Cheers!

[@marctrottier3732]

...nicelly done...

[@doctorgonzo5358]

I liked the 3rd graph showing the different dividend categories and the way they perform in bull vs bear markets. Thanks! Banks and energy stocks are good for stable growth and solid dividends! Wish we as canadians had our hands in more tech moving forward though haha.

[@haleyjae4145]

Thank you Brandon. ❤

[@karlblais7166]

Like in life, balance is all that matters.

[@Astral106]

Love the video. Thank you!

[@jk47Ssb]

Like Warren Buffet says, a company would be better off if they reinvested their cash rather then paying the share holder, I would argue the s&p chart would look the same or even better if those companies reinvested that cash rather than pay the shareholder.

[@siam9845]

I’ve gone all dividend stocks and very happy with my portfolio!

[@manveersingh9194]

What are your views on IA Financial Group Stock? It has outperformed Canadian market for the for the past year.

[@lankanvenu]

Thoughts on hyld

[@keil16]

Quite sure hyld uses a covered call approach which is a little different. More of a distribution kick back from that strategy over a growth in the fund or company.

[@roberttaylor3594]

Dividends are the main and safest way to invest in stocks at all.

[@Doofus171]

And look at it this way ... if its always true that stock prices drop at dividend pay dates, then thats a 100% guarantee you can grab more of that stock at a good price on those days.

[@JohnnyMastro]

Dividends work, and well. Retiring off reliable dividends is very not irrelevant.

[@f3wbs]

10:20 It definitely isn't surprising that a lot of great companies pay dividends. The companies that don't today might do so in the future.

[@mahirhaque1801]

I would add a short term bond etf to this list.

[@BoredatheBustop]

In my opinion, dividend-generating positions are a really powerful asset when you are first building your portfolio: by choosing to invest in dividend stocks first, the extra source of income (on top of your contributions) boosts your buying power bit by bit - making the often more expensive, growth oriented stocks that do not pay dividends more attainable. Great video Brandon!

[@Wavyyyaf]

It’s not that effective in a low capital portfolio because you can barely DRIP, your dividends are cents (can make $15.5 dollars an hour working minimum wage), etc. I think building your capital is most important when starting out

[@eboye4338]

@@Wavyyyaf I would agree

[@BoredatheBustop]

@@Wavyyyaf True, the dividends do start out quite small - but it never hurts to start compounding that dividend snowball early! As someone else mentioned too, having a sizeable dividend income later (assuming you continue to consistently grow these positions over time) could give you some more flexibility in balancing your portfolio without needing to sell off as many positions given the extra cash on hand.

[@Wavyyyaf]

@@BoredatheBustop yeah.. that’s how I started off investing. But personally since I’m 22 I’ve focused on cash flow generating companies that can reinvest their earnings into more cash flows. I’ll get back into dividend investing when I’m 30-40 years old. But I agree it never hurts to have dividend paying companies/ETFs in your portfolios

[@BRY__BRY]

​@@BoredatheBustopmore buying power from dividends doesn't mean anything if the value of that company drops by the exact amount as the dividends.

[@EK-gr9gd]

TSLA stated intention is to never pay a dividend. Guess who wants to "scrooge" the money...

[@EK-gr9gd]

Dividends should be the surplus after all deduction from the profit are made.

[@voo5000]

The people saying dividends dont matter are the same ones worrying about MER fees..😆

[@jankay8569]

Mer is a scam

[@xavierdube5025]

As you should

[@willkeen5010]

Dividends equal financial freedom. Let’s just say my dad was buying RBC stock in the 60’s. Let that sink in

[@Chap17]

Sounds like one of the best times to buy extra shares if you like the company

[@billgeneau3240]

I understand, Corporate earnings are taxed at a much higher rate than individuals tax rate, therefore movint those earnings out to the individual results in less money going to pay tax and therefore more money being made available to the individual investor.

[@gimusk5667]

Dividends for life!

[@canpin]

Isnt it Earnings are newly acquired money generated by the business? So if i earn $100k this year, thats new money, to add to my existing money example $1M. So total of $1.1M. So, if i give out dividends, ill give out from the "new money" $100k, without touching my existing $1M. Thats what i thought.

[@user-vs8wu9bj6e]

I enjoyed your informative clip better than the one where you where eating your lunch on screen

[@SuperSaiyanKrillin]

I would say that it's not like dividends are bad or irrelevant - but the idea of someone putting the vast majority of their investments in dividend stock is where people are making big mistakes and are getting sold a false narrative. How many videos are out there with clickbait headlines promising "Here's HOW to make over 10k a month in dividends!!!!" which are incredibly misleading and outright dangerous. The more one focuses on dividends - the less they are focusing on diversification and that's the real danger for an investor

[@XInfinity2024]

The problem I have is when people say dividend investments isn't being diversified but they are talking about just buying Intel , Microsoft , Apple and such. There are dividend paying ETFs in all different parts of the market. If people are only focusing on dividend stocks like buying shares of say Apple then yes I do agree. But if they are dividend paying ETFs I don't see as big of a problem as long as they aren't chasing high payouts and aren't buying just 1 kind.

[@DabloEscobud]

It creates tax inefficiencies!

[@valveman12]

Dividend investing gives me over $2000.00/month... That's over $24,000/year Not useless at all. In fact, I reinvest, and sometimes I use some of my dividends to go on a holiday with my wife. Dividends are great!

[@GlenooCanada]

People always bring up Warren Buffet does not pay a dividend ... Look at his investments ... almost ALL of his investments pay dividends ... Therefore all of you should not talk trash about dividend stocks as a bad thing

[@TwinworldGameReviews]

When the ex-dividend date arrives, do the exchange operators (TSX etc) adjust the share price down or do bots sell off stocks to bring the price down to the new amount via an arbitrage opportunity?

[@jershir7599]

Exchange operators do

[@James_48]

Jer Shir is correct, but for clarity, the day of the ex-dividend date the exchange shows the previous day’s closing price lower by exactly the amount of the dividend

[@TwinworldGameReviews]

@@James_48 Ah ok. I'm surprised they would do that, since sometimes the stock will trade up on the ex date anyway. Seems like it could be considered market manipulation then. If folks really thought the stock was worth that much less, then it would just trade down that day to where investors felt the stock was worth.

[@James_48]

@@TwinworldGameReviews the asks and bids can be whatever the market wants but adjusting the closing price reflects the payout of the dividend.

[@MooseOllini]

Dividends arn't bad - they are just irrelevant. Just invest in good stocks. You'll end up with both growth and dividends stock.

[@mrbsebt]

People who say dividends are bad do NOT like to get up with free money in their account :D

[@florendogomezcasuga7043]

Pepsi and coke are waiving 😅

[@djayjp]

Dividend investing is only good for two scenarios: 1) retirement phase 2) weathering down markets. Otherwise not only are dividends not relevant, but in fact non dividend paying stocks or funds will typically outperform dividend paying ones in growing one's portfolio value in the long run (as these companies reinvest in the companies themselves rather than pay out dividends which are only done when they can't get a better roi by reinvesting it in a fast growing company).

[@James_48]

The chart in the video says otherwise.

[@djayjp]

@@James_48 True. Counterpoint: look at Nasdaq 100 vs S&P 500 or DJIA.

[@James_48]

@@djayjp so what? 100 stocks is just 100 stocks. The graphic is looking at the total market.

[@djayjp]

@@James_48 I guess sector composition matters in this sense.

[@timhennigar1468]

Those that play the dividends game ought to be focused on TOTAL returns - it is always about TOTAL returns - I expect growth (or at least not wholesale loss) on any investment. And, there are enough examples of dividend stocks that outperform the market over the long term .. Moreover - if those investments are in ETFs (etc) most times you can be buying into the largest and best companies in the sector and are well diversified. And PLEASE, don't expect that companies who earn lots of bucks actually reinvest or put that earnings into to making the company better .. there are numerable examples of fraud, theft and grift - and simply poor decision making .. There is good and bad in both strategies - wins and losses to be had aplenty in both strategies ... I am tired of these videos ..

[@TheJoaninhaMendes]

The company just made 500 B dolars more... but the CEO was found in bed with his secretary and the market reaction is not and increaso of 500 B in the market cap, a decrease of 5 B (because of bad news).. Nope... I rather have the dividends and having that 500 B in my pocket.

[@singhjp006]

First comment 🎉

[@WiseOwl_1408]

Definitely done with bevis and butthead

[@SKcanuckfan]

Why would you comment on the video if you're done with them? Thank you for informing us of your decision. I can now sleep better at night.🤣

[@fuse98]

Beavis ...

[@33svetlana]

Good riddance! 🤣