Hi DW!
To clarify, I wasn't disheartened that I didn't beat the market, I was disheartened because I was feeling emotionally attached to my portfolio and collecting Dividends at the end of each month! It was painful to sell! But I trust it was the best decision.
Re Taxes on individual stocks vs **some** ETFs/Funds, is that for non residents/non citizens you have to pay taxes twice, to the US government and to the country where you have fiscal residence (in this case Portugal).
Example, imagine you were to collect $100 in dividends from JnJ, as a citizen/resident alien living in the US you'd take the $100 and pay 15% in taxes, taking home $85 to reinvest or take your spouse/partner out for dinner.
Living in Europe, you'd still have to pay 15% taxes to the US (because my country as a treaty to avoid double taxation it's "only" 15%, otherwise it would be 30% to the US) but on top, you have to pay 28% to Portugal. So instead of having $85 to reinvest, you are left with $61.2. It's quite a difference...
Some Funds/ETFs instead of paying out dividends, reinvest in the fund before releasing, hence saving you from the taxes on dividends. You only pay taxes on the sale; capital gains, which are also higher but in this case, the US wouldn't touch it (it's 28% in capital gains to Portugal).
You'd have to substantially beat the tracker in order to be worthy continuing to invest in individual stocks the way I was.
To clarify, I wasn't disheartened that I didn't beat the market, I was disheartened because I was feeling emotionally attached to my portfolio and collecting Dividends at the end of each month! It was painful to sell! But I trust it was the best decision.
Re Taxes on individual stocks vs **some** ETFs/Funds, is that for non residents/non citizens you have to pay taxes twice, to the US government and to the country where you have fiscal residence (in this case Portugal).
Example, imagine you were to collect $100 in dividends from JnJ, as a citizen/resident alien living in the US you'd take the $100 and pay 15% in taxes, taking home $85 to reinvest or take your spouse/partner out for dinner.
Living in Europe, you'd still have to pay 15% taxes to the US (because my country as a treaty to avoid double taxation it's "only" 15%, otherwise it would be 30% to the US) but on top, you have to pay 28% to Portugal. So instead of having $85 to reinvest, you are left with $61.2. It's quite a difference...
Some Funds/ETFs instead of paying out dividends, reinvest in the fund before releasing, hence saving you from the taxes on dividends. You only pay taxes on the sale; capital gains, which are also higher but in this case, the US wouldn't touch it (it's 28% in capital gains to Portugal).
You'd have to substantially beat the tracker in order to be worthy continuing to invest in individual stocks the way I was.