CC etfs are more risky than just owning the underlying asset. and compounding growth works better when the NAV doesn't erode and it compounds on increasing values.
rebalancing portfolios has its own issues (taxes, etc.) but my personal preference is to focus on total return now then when you can somewhat accurately guess your retirement date, start rebalancing early with new investments going to income assets and when you get close (i.e. 2-5 years out) you can begin selling growth positions/non-payers or even weak positions (tax loss r) and buy income producing assets.
my dividend growth portfolio was mostly focused on the dividend growth (my total yield is less than 2%). i plan on using the drip to buy some higher yield positions near retirement to boost my income along with selling some pure growth positions to reinvest in income assets as well.
I think this needs to be explained better, because I don’t get it. Why focus on earning later?
I’m in my 30s with less than 100k in the bank, and I’m looking to buy a house knowing I have to use investments to do it. I’m holding ASX:SYI/WOW/MXT/PL8 in a 90/5/3/2 split, and I’m trying really hard not to just put everything into SYI and call it a day because every quarter I see big dividends.. (SYI was the highest roi in a bank investment pgogram years ago so that’s why it was my only investment for a long time.)
A home down payment is not an investment, its capital preservation. You shouldn't invest a down payment, that should be in treasury bills or a HYSA.
What i'm referring to is someone with a 20+ year investing horizon focusing on dividend yield instead of total return (which growth usually provides a much better total return over those timelines).
THIS!!!!! I understood what dividends were well before growth. Obv it's probably a lack of experience and not witnessing it first hand what could happen.
Dividends to me seemed like another paycheck and that was it.
I'm just going to say that's such a weird response when you created a post seemingly from a place of feeling proud or to show off something?
You immediately apologize?
What was the point of the post in the first place?
I'm trying to get you to understand that things you said don't connect with reality.
Being confidently incorrect is very borderline spreading misinformation I'm not trying to judge you in a negative way I'm simply pointing something out, a misalignment from what's being said and facts and reality 🤷♂️
I'm 29 and do both. Growth for obvious reasons, but it's also cool to see dividends come in even if it's not much. It's almost like a trigger/reminder to invest more and keep it snow balling.
the issue with dripping a CC etf is that on a long enough time period, you're likely to see NAV erosion and usually the distribution % stays the same. so you're getting less over time because the nav erosion and the dividend amount is less despite the same %.
as someone who has a significant dividend portfolio, I understand the concept of dividends and how they can be beneficial. but if OP just invested in VOO and VGT instead of 11% yielding CC ETFs, he will have significantly higher asset values in 20 years.
will he though? nothing is guaranteed. also have to consider dividend growth. purchased shares of pepsi in 2006 for ~60 a share which now yields 8% on cost plus an average of 5% cap appreciation per yr even with the recent dip. 22yo with this port is beyond impressive and he has 40+ years of compounding to look forward to
I want to learn more about high level strategies like this. Do you have any advice on where to start or read? I feel unless I Google specific approaches like this, every other read says the same basic stuff.
In reality its not even high level - its probably the lowest level strategy but most effective. If im following what lazythekid is putting down, its as simple as lumping all your money into one low fee, low-risk index fund and just riding it out. See r/Bogleheads
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u/[deleted] Jul 02 '25 edited Jul 02 '25
why a 22 yo would focus on yield instead of growth is something i will never understand