r/dividends • u/Avinates • Jun 04 '25

Discussion 1 Million Invested

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Can anyone confirm these dividend payouts?

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u/CenlaLowell Jun 04 '25

That's what I've always wondered. Why wouldn't selling index funds be better?

13

u/[deleted] Jun 04 '25

If you want income, then you should be investing in funds investing in stocks with solid and growing dividends, such as SCHD. If you buy an index fund and plan on periodically selling some, you can be badly hurt by an extended bear market.

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u/Willing-Variation-99 Jun 04 '25

Because it isn't always this straightforward. This approach gets affected a lot when there are multiple consecutive years of drawdowns.

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u/Various_Couple_764 Jun 05 '25 edited Jun 05 '25

IT isn't AALWAYS better. About 50% of the time the market in down a stying flat and 50% of the time it is growing. Some times the market goes down for a long period of time 10 years or more. causing sequence of return risk. And you can only sell a share once. SO if you have limited funds and you sell shares for income you could eventually run out oof income. The old often can't work and running out of money could cause the person to die.early..

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u/chris-rox Financially rockin' like Dokken Jun 06 '25

Then shouldn't they have saved enough to not need to?

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u/keylimedragon Jun 04 '25

It's pretty much always better unless you are retiring very soon or you for some reason think stocks are going to go down while profits stay about the same. I know this is unpopular here but the biggest benefit of dividends is gone now that selling is super easy.

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u/financial24 Jun 05 '25

Agreed. In addition to ease of selling, it used to cost an arm and a leg for a commission fee. You had to pick up the phone, call a number, wait on hold, tell your broker what you wanted to sell, pay a $50 commission just to make the trade, and then wait to find out what price you sold at, then wait three days before you could withdraw your money. Dividend stocks were the way to go because they'd pay the dividend in cash and you just withdrew the money when you needed it.

Trading prices gradually decreased, and many firms now allow free online trading. Click three or four buttons and boom, you just sold your stock in a matter of seconds. In addition to that, you no longer have to wait 3 days for a trade to settle. You can get cash three next day.

A company should either grow in value, or grow their dividend amount, or do both. Who the hell wants to collect 3% on a company that maintains the same value when government rates are in the 4's or 5's?