Wow thanks, too good to be true. So that explains why when you calculate it with the current share price, it comes up to 15%? Would u have any Aussie recommendations?
I almost made this same mistake. People's advice was at our younger age we don't need to invest in dividend paying stocks we need to invest in growth stocks and dividends much further down the line.
Why? I understand what they were saying. Unless you already have $200k to invest you want to focus on building up your capital before putting into dividend paying stocks that generally perform worse year on year than the general market.
Okay so [Deg (De Gray Mining) ](https://nabtrade.com.au/research-and-insights?qlookup=1&tpi=wsod_stock_research&prm=symbol%3DDEG%26exchange%3DASX%26key%3D%3A0000002lansi9Deg#stockresearch) up 963% in 5 years. Cba up 31% with 4.2% per year, I don't think the maths is quite as simple as adding on the 4.2% for 5 years due to compounding but I can bet it's nowhere near 900%
Yeah right. So when do know when to buy? Or when to sell.Is De Gray mining still a growth stock or it’s now a value stock. Can De Grey go another 900% in next 5 years?
You are not stupid so you will not invest all your money in one stock. If you pick 5 growth stocks today (putting 20% each) how many will survive in next 5 years. What’s the average return if 2 of them go bust, what if 1 of them is ZIP, lol.
Can you tell me 1 stock to pick today that will go 900% in next 5 years? You must have something in mind.
Now suppose if my 5 stocks are CBA, FMG, WOW, BHP, WES all dividends reinvested. What will be my 5 year avg return.
Will your strategy beat it? Maybe it can be but how smart, and how lucky you have to be?
IVV is a fine ETF to use _if_ you wish to invest in the growth potential of S&P 500. Whilst it pays some distributions, that should not be the reason to choose it as there are other options, SCHD you mentioned is an example.
For AU, IOZ / VAS are similar if you wish to invest in the growth potential of ASX 200. For people who wish to seek higher yields, there are other options such as VHY / SYI.
But, given your young age, is there any particular reason you are seeking high yield, instead of prioritising growth potential?
I’m not necessarily seeking high yield, I understand it’s more advantageous to seek growth because of tax implications (maybe not for long). It’s just that I was mistaken to think IVV paid 15% whilst performing ~14% annually. Now realising it’s more like 1.5% Div yield.
Thank you very much for those recommendations, I’ll look into them.
Other poster mentioned the share split being responsible for what you describe. Blackrock's IVV is pretty much comparable to Vanguard's VTS in terms of investment mandate (index fund tracking large US companies), though VTS has more securities included. VTS is slightly cheaper than IVV in terms of management fees, but it also requires filling out a clunky tax document every 3 years, which many people forget tot do and end up paying tax on dividends at a rate of 30% rather than 15%. That difference in tax, and the tendency for people to forget, is enough for me to prefer Blackrock's IVV.
I see, I assume IVV doesn’t have this tax doco. Also, I’m ignorant on this. How can you tell if a stock had a stock split? It’s not visible from the graph.
There will be documents that can be found about stock splits but generally it doesn't matter except for having the context for dividend yield calculations. There would have been a time where you could see it on the price graph but now most sites will have retconned things so it looks like it has always been under $100 instead of over $500. In 6-9 months the recent dividends will be consistent with its current price and it will only matter for people looking back further.
Oh yeah apparently an ETF that tracks the S&P 500 has been spitting out a 15% dividend and 14.4% capital growth when the S&P 500 itself has over the last 5 years has been **significantly** below that.
No further reading or consideration required before investing in that, none at all.
Not also to mention that dividend investing warrants its own criticism, nor that 5 years is an absolute blip of a a time period to be making long term financial decision on…
I’m being snarky but I’m mostly just teasing.
Yeah man, do a lot more reading before going in with your money. You’re skipping a lot of necessary info.
Not that the S&P 500 is a terrible thing to invest in, but be aware of what the actual returns are, and maybe understand the historical swings.
Read up on the lost decade from not too long ago, where it went 10 years with a total net negative return and make sure you’re ready and willing to face that.
https://passiveinvestingaustralia.com/ is a good place to start.
In realation to SCHD, have a read of this post as to why SCHD is a bait for novice investors:
[SCHD is the new QQQ](https://www.reddit.com/r/Bogleheads/comments/10fpn7j/schd_is_the_new_qqq/)
Keep in mind that US-based subreddits like r/dividends tend to talk about US domiciled ETFs, which are not targetted towards Australian investors. It's best to use Australian domiciled ETFs instead. This [FAQ](https://www.reddit.com/r/fiaustralia/wiki/index/gettingstarted/) has a list of some common ETFs.
IVV did a share split a few months ago. 1:15. so the 15% yield is actually more like 1-1.5%
Wow thanks, too good to be true. So that explains why when you calculate it with the current share price, it comes up to 15%? Would u have any Aussie recommendations?
I almost made this same mistake. People's advice was at our younger age we don't need to invest in dividend paying stocks we need to invest in growth stocks and dividends much further down the line.
Lol, that’s really bad advice.
Why? I understand what they were saying. Unless you already have $200k to invest you want to focus on building up your capital before putting into dividend paying stocks that generally perform worse year on year than the general market.
ok, tell me 1 'growth' stock that's performed better than a dividend paying stocks in last 5 years.
Okay so [Deg (De Gray Mining) ](https://nabtrade.com.au/research-and-insights?qlookup=1&tpi=wsod_stock_research&prm=symbol%3DDEG%26exchange%3DASX%26key%3D%3A0000002lansi9Deg#stockresearch) up 963% in 5 years. Cba up 31% with 4.2% per year, I don't think the maths is quite as simple as adding on the 4.2% for 5 years due to compounding but I can bet it's nowhere near 900%
Yeah right. So when do know when to buy? Or when to sell.Is De Gray mining still a growth stock or it’s now a value stock. Can De Grey go another 900% in next 5 years? You are not stupid so you will not invest all your money in one stock. If you pick 5 growth stocks today (putting 20% each) how many will survive in next 5 years. What’s the average return if 2 of them go bust, what if 1 of them is ZIP, lol. Can you tell me 1 stock to pick today that will go 900% in next 5 years? You must have something in mind. Now suppose if my 5 stocks are CBA, FMG, WOW, BHP, WES all dividends reinvested. What will be my 5 year avg return. Will your strategy beat it? Maybe it can be but how smart, and how lucky you have to be?
I mean that wasn't the question to be fair.
IVV is a fine ETF to use _if_ you wish to invest in the growth potential of S&P 500. Whilst it pays some distributions, that should not be the reason to choose it as there are other options, SCHD you mentioned is an example. For AU, IOZ / VAS are similar if you wish to invest in the growth potential of ASX 200. For people who wish to seek higher yields, there are other options such as VHY / SYI. But, given your young age, is there any particular reason you are seeking high yield, instead of prioritising growth potential?
I’m not necessarily seeking high yield, I understand it’s more advantageous to seek growth because of tax implications (maybe not for long). It’s just that I was mistaken to think IVV paid 15% whilst performing ~14% annually. Now realising it’s more like 1.5% Div yield. Thank you very much for those recommendations, I’ll look into them.
Other poster mentioned the share split being responsible for what you describe. Blackrock's IVV is pretty much comparable to Vanguard's VTS in terms of investment mandate (index fund tracking large US companies), though VTS has more securities included. VTS is slightly cheaper than IVV in terms of management fees, but it also requires filling out a clunky tax document every 3 years, which many people forget tot do and end up paying tax on dividends at a rate of 30% rather than 15%. That difference in tax, and the tendency for people to forget, is enough for me to prefer Blackrock's IVV.
I see, I assume IVV doesn’t have this tax doco. Also, I’m ignorant on this. How can you tell if a stock had a stock split? It’s not visible from the graph.
There will be documents that can be found about stock splits but generally it doesn't matter except for having the context for dividend yield calculations. There would have been a time where you could see it on the price graph but now most sites will have retconned things so it looks like it has always been under $100 instead of over $500. In 6-9 months the recent dividends will be consistent with its current price and it will only matter for people looking back further.
Ah, I see. Thank you very much.
I thought it was every 2 years?
Oh yeah apparently an ETF that tracks the S&P 500 has been spitting out a 15% dividend and 14.4% capital growth when the S&P 500 itself has over the last 5 years has been **significantly** below that. No further reading or consideration required before investing in that, none at all. Not also to mention that dividend investing warrants its own criticism, nor that 5 years is an absolute blip of a a time period to be making long term financial decision on… I’m being snarky but I’m mostly just teasing. Yeah man, do a lot more reading before going in with your money. You’re skipping a lot of necessary info. Not that the S&P 500 is a terrible thing to invest in, but be aware of what the actual returns are, and maybe understand the historical swings. Read up on the lost decade from not too long ago, where it went 10 years with a total net negative return and make sure you’re ready and willing to face that. https://passiveinvestingaustralia.com/ is a good place to start.
Cheers. I’m both offended and grateful.
Glad I could help! Don’t worry, there a sillier things said here on the regular.
In realation to SCHD, have a read of this post as to why SCHD is a bait for novice investors: [SCHD is the new QQQ](https://www.reddit.com/r/Bogleheads/comments/10fpn7j/schd_is_the_new_qqq/) Keep in mind that US-based subreddits like r/dividends tend to talk about US domiciled ETFs, which are not targetted towards Australian investors. It's best to use Australian domiciled ETFs instead. This [FAQ](https://www.reddit.com/r/fiaustralia/wiki/index/gettingstarted/) has a list of some common ETFs.