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12-29-2022, 12:39 PM | #13201 | |
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Quote:
Dividends are paid off the stock price. So getting an 8% dividend is not like it's extra cash. After a stock goes ex-dividend, the share price typically drops by the amount of the dividend paid to reflect the fact that new shareholders are not entitled to that payment. So while you're getting a "dividend," you capital tied up in the share price is dropping too. Couple that with a stock that still changes value like any other stock and that $50k you put in this year, could easily only be worth $30k just from a bear market alone. Too many people think dividends are free money, and most are not. |
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12-29-2022, 12:55 PM | #13202 | |
Cheat Death
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Quote:
The Roth IRA as an Emergency Fund The advantage of putting emergency savings into a Roth IRA is that you don’t miss the limited opportunity to make that year’s retirement contribution. You can only contribute a few thousand dollars to a Roth IRA each year, and once a year passes without a contribution, you lose the opportunity to make it forever. However, accessing these funds should be your last resort... The part of your Roth IRA contribution earmarked as your emergency fund doesn't belong in stocks, bonds, or mutual funds like a typical retirement contribution. It belongs in a liquid account (meaning cash or something that can easily be converted to cash and that earns interest) that can be withdrawn from at a moment's notice without losing principal. Last edited by KCUnited; 12-29-2022 at 01:07 PM.. |
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12-29-2022, 01:08 PM | #13203 | |
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I'll max my contribution this year but leave the chunk I'm putting in now in a money market fund until my actual emergency savings is back to level. When it gets there, this chunk will get invested. |
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12-29-2022, 01:24 PM | #13204 | |
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Quote:
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12-29-2022, 02:02 PM | #13205 | |
TACO SALAD
Join Date: Apr 2008
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Lew,
Yeah, that makes sense. Depending on your broker, you may need to choose a money market fund or they may default free cash into one. Vanguard defaults to a good one, Schwab puts me into a cash account that pays nothing but you can buy SWVXX or one of the others and get 4% interest or so Quote:
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12-29-2022, 02:03 PM | #13206 | |
Fish are scared of me
Join Date: Nov 2001
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Quote:
Keep in mind it's 7.4% yearly but pays monthly which gives you an advantage in compounding. |
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12-29-2022, 02:45 PM | #13207 | |
Fish are scared of me
Join Date: Nov 2001
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Quote:
I'm interested in what you say about the price action of a dividend stock dropping when a dividend is paid. That's interesting. Seems like there would be no point in owning a dividend stock. My daughter invested $3200 in MAIN exactly 2 years ago and the value now is $4181. ETRADE says her gain is 12.56% Thats 30.65% increase by my calculation 3200 to 4181 . What am I missing? |
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12-29-2022, 03:58 PM | #13208 | |
Seize life. Be an ermine.
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Quote:
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12-29-2022, 04:07 PM | #13209 | |
Fish are scared of me
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Her initial purchase was 100 shares at 31.962 on 1/6/2021 So why don't they calculate the dividend reinvestment into the end result ?? STUPED computers! |
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12-29-2022, 05:39 PM | #13210 |
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Yeah, that's a pet peeve of mine. If you buy $1,000 of stock and it pays at 10% dividend and doesn't change in price, then reinvesting dividends will report that you have a return of 0% when it's really 10%.
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12-29-2022, 07:51 PM | #13211 |
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I suppose since you paid taxes on the dividends that were reinvested it’s technically not a gain. However, I have the same annoyance since I just want to be able to glance at my brokerage account and get a good picture of how much return I’ve had on my original investment.
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12-30-2022, 02:25 PM | #13212 |
Fish are scared of me
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What about SSSS It's near a 52 week low pays a qtly dividend at a rate of 11.37%
Has a "strong buy" rating and a PT nearly 100% above the current price |
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12-30-2022, 03:07 PM | #13213 | |
Seize life. Be an ermine.
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Quote:
It just seems like it should be a problem that's been solved, and it hasn't.
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01-08-2023, 10:13 AM | #13214 |
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Good reminder to pump those investment accounts in red years to gain a significant compounding interest advantage and savings for the future. These large red years don't happen as often as you think. It can be hard mentally for people to look at their account and see the decline. My passive investing into my 401k/IRA are down 19% from their all-time highs but I am looking to invest even further now as my gains for the future will be greater.
Hope this helps someone sock away a little more! |
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01-08-2023, 10:21 AM | #13215 |
It's just a ride.
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my prediction: this year will suck more cock like last year
patience is key, probably won't see a real bottom till extremely late 23/early 24
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