Due to the popularity of this pie when I originally posted it last year and the fact that I have found references to it on youtube and other forums I figured I would do an update. This is not a rate my pie ;-) But I am willing to answer questions. S&P 500 Dividend Aristocrat pie
Backgorund
As you know the S&P 500 is constantly changing. New companies get added and removed through out the year through M&A, Bankruptcy, going private etc. The S&P 500 Dividend Aristocrat's are a subset of the S&P 500 that have increased their dividend payout over the last 25 years or more. In the research I have done and what I have seen with the Dividend Aristocrats as a unit they tend to lead in growth and lag in decline meaning they ever so slightly outperform the S&P 500. I have chosen to add a 5% allocation in my portfolio to take advantage of that. NOTE: I am not really looking for the dividend specifically off this index but what it means to get onto it...
What changed
What changed in my pie
Industrial
- Add CAT at 8%
- Add UTX at 8%
- Reduce MMM, AOS, CTAS, DOV to 9%
- Reduce EMR, GD, ITW, PNR, ROP, GWW to 8%
Financial
- Add CB at 14%
- Add PBCT 14%
- Reduce AFL CINF to 15%
- Reduce BEN, SPGI, TROW to 14%
Sector rebalance
- Set Consumer Staples to 23%
- Set Industrial to 21%
- Set Materials to 10%
- Set Financial to 12%
- Set Energy to 3%
Considerations
- Its important to remember that pies must be full decimal percents for example if you have 5 stocks in a pie its easy to set equal weight to all 5 stocks in a single pie. When you have 7 stocks thats a bit harder. 100 / 7 ~= 14.28 In cases where that happens I simply set everything to 14% and without evaluation of individual companies increase a few companies to make up for the full round 100%. Doing pies of pies is a pain when it comes time to add or remove companies.
- Sector allocation has a similar problem. My goal is to give equal weight to all companies within the Dividend Aristocrats. In cases of decimals I round up or down based on the .5 This time that did not work out well. I had three sectors sitting at .5 Healthcare, Material, Energ
New to stocks but someone mentioned that now would be a good time to purchase an ETF. I was going to pull the trigger a few weeks ago but now I’m not so sure.
Advice?
So I did a dividend pie. I like Dividend Aristocrats because who does not :-D This does not perfectly match the index because there are 53 stocks and that does not divide well by 100 nicely. I broke it down by sector and kept the sector percents more true than totals equality.
And dang... That is one heck of a URL generated to share...
https://dashboard.m1finance.com/share/H4sIAAAAAAACA71XwY6bMBD9FcShp1QyWehuI_UQLanKwVC6UCmqospyXNYJMZFxSsIq_76mxzBqja3uEcRjnmfejN-8-OpyZP7CF6z7eeTMn_mCHIYXT---ehFCXsx_8y0TW28peasaKonSH7U1p6z1Fz9efNX4ixeb33jvvUT8auSBKN4Ir2D0WTR1U13-8v-W0ZPkaviEb_Vzib7H2S65w_Hqk3-d-UcmKROKVPrjAKHr5ubd_DpzY1wqXnPFNbepJHGQFuXbkMREMclJPZ1k0uN-OSZ5P2IEw9d3WbG3h1cd3uVj-AdDOEV4l9hHH-DUPnreZfEain5b3iBwrW_Bakabw-EkOP3TPBaFPuPdG7XMo-Z3OjDpPSlyrJkN17TAI64PpqJCKSCqB2NRpMXKGr0_p0A7maLLCFKUsZzPaUyt0Rjh3j5r6z7t9w6xsxg75TyxRq-6NC4v1hW7QF1leu4kyOIKYD7qyMi1Jb8xUnurVul7YnI35ghDc-6_To6Yt1SyYdIROd0e5CEGOiGIjMWcQe4iNNXjHJogxvAKZUXiEF3fSkt7-LrLINNinLozeCeG4zvRWSufuSCCWpme4YYY62OOTFMc4Ti3h-M-A_RhDNeOzQWea-tcQfDbCn10LdBKMGnj7bVRGSswMs8u5Amj8flC1_MlYntqlZ3t1nfWDgMz1VQDGr63h9MwBTQQmEsog8arMbzDLtHLCzgfp3Rf6UDerXD0jHvqVPceTN3m3-Ngorq_aMegnr1HIplFC0O-xngvG-AOS-Ua9iuma10SgjvpvbGHx4XDUolBMwsvlZvrKw9_HR7OEQAA
Heya Investors of Reddit, I could use a little help.
I've found a few articles making the statement that the S&P 500 is consistently outperformed by the S&P 500 Dividend Aristocrats once reinvestment of dividends is taken into account (i.e. total returns instead of market price).
- http://www.proshares.com/dividend_growers/consistency_rolling_returns_dividend_aristocrats_nobl.html
- https://www.simplysafedividends.com/intelligent-income/posts/6-dividend-aristocrats
- https://www.marketwatch.com/story/dividend-aristocrat-stocks-post-almost-double-the-returns-of-the-sp-500-in-2016-2016-09-06
I'm having trouble corroborating the data though. Firstly, I'm having a really hard time finding total return charts: I've had to use morningstar for funds and a 7 day demo account at ycharts for indicies (and apparently data only goes back 5 years?). Second, when I do graph total returns I'm getting much different results than what's portrayed in those articles.
I've spent a couple evenings digging at this without much progress so I'm wondering if anyone here has some insights to help me along.
Is my data bad? Is there a solid source of total return data for indicies? Is there another way I should be evaluating this investment strategy?
I'm a young Canadian investor (early twenties) thinking of adding a fairly stable/safe ETF to my portfolio. Since I'm already invested in riskier sector specific etf's such as healthcare and Tech, I was hoping to using this position to balance out my portfolio. I was considering adding a 7-8% yielding REIT or a high dividend ETF but since I am young I though an asset with a bit more growth is suitable. I came across a fairly new ETF by Cboe Vest (KNG), it seeks to track the S&P dividend aristocrats index while also providing income 3% higher than the S&P dividend yield. They achieve this by implementing a partial call option selling strategy. This causes the upside to be capped, but it still has at least 80% participation (89% as of May 2018). Even considering the fees (0.75% expense ratio) it seams like KNG has a greater likely-hood of outperforming other ETFs that track the S&P and even the index itself. If the index appreciated 8% and had a 2% yield (10% total return) wouldn't KNG appreciate 6.4% at the very least and achieve a yield of 5% (11.4% return)? Even considering that ETFs don't always track their underlying index perfectly, is it right to think that KNG only needs to capture 60% of the upside of the S&P to have similar returns? Or is this similar to the risks behind leveraged ETFs (from greater downside exposure, not Contago) in which your day to day losses get amplified and since your upside is capped, your long term returns could potentially be much lower. The fund itself states that it allows investors to participate in 90% of future growth, and that calls can only be sold on a maximum of 20% of stock holdings. I like the strategy behind the ETF and the potential returns, but what risks am I missing and how will the returns compare to similar ETFs and the index itself?
This article goes into detail to examine why dividend aristocrats index beats the regular index:
http://www.marketwatch.com/story/heres-another-reason-to-dump-your-index-fund-2015-01-09
What are counterarguments for why the guy is wrong?
URL for the fund:
https://www.google.com/finance?q=NYSEARCA%3ANOBL&ei=G_AVWPHIIYHhsAGuv73ABA
http://www.marketwatch.com/investing/fund/nobl?mod=MW_story_quote
I've been reading books, lurking in reddit and reading countless articles and only today I came across the S&P 500 dividend aristocrats index. It outperformed the S&P 500 by a good margin (20 year view) and generally seems just as a stable investment as the S&P 500 only with better returns.
So my question is, what is its drawback? Why don't people prefer it over the S&P 500 if its returns are better?
Se una persona non molto esperta si trovasse improvvisamente con una grossa disponibilita' economica (eg 400k) avrebbe senso investire nelle 66 aziende S&P che pagano dividendi?
Sembra un modo relativamente sicuro di ottenere un flusso di cassa costante e potenzialmente vivere di rendita
I would have thought that when this happens, the S&P 500 would drop back down because of valuation reasons since the S&P 500 is a riskier asset than US treasuries and would command a higher yield.
However, similar to the article linked, we are seeing US treasury yields higher than S&P 500 dividend yields today at 1.85% and 1.32% respectively.
I strongly believe in a never sell SWR rate....in other words live off dividends. With a 70/30 portfolio and bond yields so low that means around a 2% SWR. Anyways....what I'm trying to figure out is what are the long term expectations around S&P 500 dividends and their growth.
S&P 500 dividends paid were $62.19 in fiscal 2021. When I compare this to 2010 dividends paid of $28.82 this is some very good growth. How about the year 2000? Dividends paid were $25.99. Hmmm OK not very good in terms of growth rate. What about 1990? Dividends were $25.11 for that year. Yikes, hardly any growth at all compared to ten years later.
In my models I assume a 3% growth in annual S&P 500 dividends. Does anyone think this is unrealistically high?
I'm looking to invest $20k into a S&P 500 index fund but I'm a little bit lost. I see a lot of funds out there for different stock purchases but I'm not clear what the dividends are, or if there's a fund that members in this group prefer vs others for both overall growth and dividend payout.
I see funds like ZSP and HXS have 28-30% growth YoY for this calendar year, but know that a lot of people are all about VFV. Looking to leverage the experience of others to find a good balance between year over year growth, initial buy in, and dividend payout.
aren't you adding more risks by betting on single stocks ETFs than to capture a 4-5% yield with a dividend ETF?
NOTICE: this isn't intended to be ETF vs Stoccks type of topic. I would like to understand what you folks see as the intrinsic difference between the 2 dividend strategies.
Newbie here so sorry for the question but still a lot to learn.
Every time i look for the best way to invest i always end up with the same conclusion, buy and hold for 10 years. Where? Etfs like vanguard s&p 500, all world, nasdaq... Which have very low yield dividends but long term they had better results.
So why people choose to invest in different etfs with higher dividends?
Just trying to understand which way is the most beneficial and 'smartest' to invest.
Thanks!
I am trying to get better about benchmarking my portfolio against the S&P500 in excel. I have set up a system that has been working very well the past few weeks benchmarking against SPY by adding to my theoretical SPY holding in excel every time I add cash to my portfolio. however, SPY pays dividends 4 times per year. What is the best way to make sure I track this properly? I'm worried that down the line I forget about one of these payments causing me to not properly follow the S&P500 index and to believe my own returns are better than they actually are. I am also always a bit confused by how dividends work in an ETF. Doesn't paying out the dividend decrease the value of the ETF? What is the ETF doing with all the company dividends it accumulates between payout dates? I don't personally own SPY (I use FZROX in Fidelity for indexing), so I am a little confused about how to factor this in. I see that there is a different ETF with ticker SPXTR that tracks the total return of the S&P including gains and dividends. Should I switch to using this fund to benchmark? I can't seem to find any info on it such as fees or even how it utilizes the dividend payments etc.
..Or maybe the SEC will uphold their own rules. Ok, well everything but that last one. Meanwhile , we will continue to rise over time even without MOASS due to fundamentals and the impossible to ignore turnaround story. Either way, get jacked fellow apes!! We’re almost there! 💎👐🏼🦍👐🏼💎
I'm cross posting this with a couple of other servers so apologies if you see this more than once.
I'm 18 and I opened a brokerage account back in January. I have always been told by my grandfather to buy dividend stocks and hold them forever so that what I started to do. I have about $1800 in a TFSA (for Americans think a Roth IRA with no age cap). I currently get about $60 per year in dividends.
However, I'm going to University soon and wondered if it would be a better choice to sell all my stocks in favor of buying a S&P 500 ETF. I would still open a taxable account later when I have more disposable income to pick stocks with. (after maxing out my TFSA)
Either way, I'd still be consistently investing and getting a dividend of some sort lmao. (Even if it's 1.1%.)
tdlr: First year University student, not a lot of money, keep dividends stocks or go with a S&P 500 ETF?
I want to buy S&P 500 ETF (on Bolero). I've done some research and a lot of people seem to recommend the Vanguard S&P 500 ECITS ETF (VUAA) because it's an accumulating ETF but when I look up the ETF, it doesn't pay a dividend so what's the point of buying the accumulating ETF?
The same is true for the iShares Core S&P 500 UCITS ETF (CSPX).
Sorry if it's a noob question, I'm new to the stock market ;)
Was wondering since I couldn’t find any information on the app.
Hey guys, I am a 19 year old who got into investing about 8 months ago when some stocks were really low. I really don’t know much on investments besides regularly investing in VOO. I want to create a strategy to put my money into almost all monthly dividend stocks and use that passive income to buy more S&P 500. I’m a very busy guy so I don’t want to learn to pick individual growth stocks just yet, and want something easy and simple. Is this strategy a bad idea? Any higher (safe) dividends recommended for my portfolio? Once again, I am new and know the basics but that is about all. Thanks!!
I have been investing for about a year and have been focusing on dividend stocks and etfs for the better part of the last 8 months since reading the intelligent investor. So far my best performer has been SPYD s$p 500 high dividend etf and was just curious what everyone else thinks of this ticker and if there are other well paying index dividend etfs that people like.
New to investing. I am mostly invested in ETFs because I prefer safer consistent growth. I know all S&P trackers have some level of dividends, but is there one you would recommend over the others?
I'm cross posting this with a couple of other servers so apologies if you see this more than once.
I'm 18 and I opened a brokerage account back in January. I have always been told by my grandfather to buy dividend stocks and hold them forever so that what I started to do. I have about $1800 in a TFSA. I currently get about $60 per year in dividends.
However, I'm going to University soon and wondered if it would be a better choice to sell all my stocks in favor of buying a S&P 500 ETF. I would still open a taxable account later when I have more disposable income to pick stocks with. (after maxing out my TFSA)
Either way, I'd still be consistently investing and getting a dividend of some sort lmao. (Even if it's 1.1%.)
tdlr: First year University student, not a lot of money, keep dividends stocks or go with a S&P 500 ETF?
edit: removed a context line for Americans.
