(03-05-2014, 10:50 AM)fiveoh Wrote: The dividends are nice, and it is a great strategy if you need income. However, I'm starting to think I'd be better off in index funds. My portfolio has underperformed the market the last 2 years(-1% in 2012, -4% in 2013 vs SPY) and is down 1.5% vs the S&P this year. I wont need the income for another 10 years. If my return doesn't pick up, I'm thinking of switching to index funds and then transitioning to DGI when I need the income. I don't expect DGI to perform as strong in a bull market(like we've been in) so I'm trying to wait it out a few more years and see how it stacks up.
I consider the Income my portfolio generates and the Income increase, year by year what's important. My portfolio currently generates 6.3% in dividends on my investments and the dividend growth was just over 6% last year. Already this year 5 of the 20 stocks have increased the dividend by 5.8% (with no annual fees on my holdings, not even .005%).
Why would I care if my portfolio meets, beats or is less than the market?
Why would I want to pay an annual fee (regardless how small. On a $500,000 portfolio a .005% fee would be $2,500) to invest in an index fund which may or may not generate income (more likely it would not)?