10-14-2020, 03:37 PM
I am in my late 40s and plan to keep working for many years to come. I am in the process of accumulating a nest egg, so that one day I can retire and live off the dividends. (To be more specific, in lieu of long term care insurance, I'm thinking of putting my nest egg into an irrevocable trust around age 70 and living off the dividends.)
Question: what place do dividend stocks have while you are in the accumulation phase? Take AT&T for example. The dividend sits at 7.5% which, were I retired, I think would be a cornerstone of my portfolio. While growing my nest egg, however, why would I invest in it now? A year ago the stock was at 38.47; it is now 27.49, a significant degradation in price. I'm currently in mostly tech stocks, and even if AT&T hadn't dropped in price, they are doing much better than 7.5%. Even the S&P 500 index VOO was 274.51 a year ago and today sits at 319.76.
Question: what place do dividend stocks have while you are in the accumulation phase? Take AT&T for example. The dividend sits at 7.5% which, were I retired, I think would be a cornerstone of my portfolio. While growing my nest egg, however, why would I invest in it now? A year ago the stock was at 38.47; it is now 27.49, a significant degradation in price. I'm currently in mostly tech stocks, and even if AT&T hadn't dropped in price, they are doing much better than 7.5%. Even the S&P 500 index VOO was 274.51 a year ago and today sits at 319.76.