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Is a prospective retiree better off buying dividend etfs or capitalisation etfs?

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  1. #21

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    All this is very good. But my question remains

    If the share market is dropping, is it better to
    1) buy ETFs with a high dividend, and try to live off the dividend, thus keeping all your stocks, or
    2) buy ETFs that don't distribute a dividend, where you are forced to gradually sell the stocks, at a lower and dropping price.


  2. #22

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    Quote Originally Posted by john_1122:
    All this is very good. But my question remains

    If the share market is dropping, is it better to
    1) buy ETFs with a high dividend, and try to live off the dividend, thus keeping all your stocks, or
    2) buy ETFs that don't distribute a dividend, where you are forced to gradually sell the stocks, at a lower and dropping price.
    It should be the same in theory. The stock price should represent the value of the company so it’s either paid out in dividends or appreciation in stock price.

    Having to sell stock has a cost and collecting a dividend also has a cost (albeit lower cost). It would be cheaper to collect the dividend if the remaining fundamentals remain the same.

  3. #23

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    I feel the after tax yields are not very ambitious.
    Some here, and that includes myself,
    aim for 6% or more when adding new stocks


  4. #24

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    They are ETFs, so they are bound to include some stocks with lower yield. I also have some higher-yielding ETFs: RQI, ETV, GOF, PKO


  5. #25

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    Quote Originally Posted by john_1122:
    They are ETFs, so they are bound to include some stocks with lower yield. I also have some higher-yielding ETFs: RQI, ETV, GOF, PKO
    Be careful with some of those. They are not etfs.. They are cefs. Traded on the exchange and funds... But most cefs are opaque and leveraged and can be a major tax mind fuck...

    You really need to get your bank to do a risk assessment for you.

  6. #26

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    1) dividends high or low shouldn't matter in theory. Stick to the better ETFs (SPY, QQQ...) and you will probably be fine. And capital gains is usually taxed the same or lower than income.

    2) I don't think anyone disagrees that property is an equally good asset class as stocks. Many pros and cons in the comparison, that argument has been made elsewhere and the conclusion is usually to have a bit of both.


  7. #27

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    May 2019
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    It's also difficult to answer your questions without knowing your age, nationality and where you plan to retire. As all of those things will impact how much you need and how much tax you'll need to pay. Also, do you already have a place to live or will that be coming out of your income from investing?

    I'd imagine it'd be quite hard to retire on 10-12m if you're significantly younger than 60, for example.


  8. #28

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    Reminds me of the other lady that were trying to switch fund from a bond just to find yield...