QQQ - The Dividends Don't Matter

2024-05-30 12:59:49 ET

Summary

• Dividends don't matter in the accumulation stage or in retirement; total return and risk level are what determine portfolio success, in my view.
• Many self-directed investors focus too much on dividends instead of making more money and creating a larger portfolio.
• Dividend metrics and strategies, such as dividend growth stocks and dividend-focused ETFs, have recently underperformed the market.
• More money creates more retirement income. Go for total return in the accumulation stage.

Sorry, the dividends don't matter. The dividends are not important in the accumulation stage. And surprisingly, the dividends don't count in retirement either, in my view. In retirement, I believe your portfolio success will come down to total return and the risk level. That's it. In the accumulation stage, only one thing matters if you want to optimize - create the largest portfolio possible. More money creates more retirement income. As I like to (cheekily write while employin' poor grammar) - more money is more better. In this post, I will start with why I believe the dividends don't matter in the accumulation stage.

I'm not sure when and how self-directed investors went off the rails. And it's the same event in the U.S. and in Canada (my home country). It's all dividends all the time. Folks are counting their dividends when they don't matter. They are driving the dividend total instead of making more money. I often see 'PADI' posts....

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