(04-09-2021, 12:02 PM)fenders53 Wrote:(04-09-2021, 11:48 AM)ken-do-nim Wrote:If they held the same stocks in the same proportion forever it would be a similar outcome. Fees compound too so that makes VIG much better than most other ETFs over the course of decades, but less attractive fees vs a no fee DGI port that was identical. When you buy an index or any ETF you are assuming you can pick a smaller number of holding that will outperform a broad market average over time. Understanding your funds investment strategy is important. Will they automatically dump a stock that freezes their dividend or cuts it. Do they adjust holding percentages by market cap? Do they window dress at the end of a quarter so the next report looks good? If not, then what criteria? Most actively managed funds find a way to under perform for a variety of reasons.(02-22-2021, 09:27 AM)fenders53 Wrote: We discussed this sometime back. I think the ETFs fail to meet the DGI in part due to turnover. Hold them for years and you still get about the same yield. If in a taxable account they generate Cap gains taxes from trading. If you do it, VIG is among the recognized best. It's a Waterhouse ETF. I preferred VYM though, also from Waterhouse. Pays a considerably higher div because it holds more shares of the high yielding aristocrats like T, Chevron, ABBV etc. I say this without looking at them for about a year. I think DGI is properly done with individual stocks. Grab a couple of the best, (like AVGO) and just hold them for the DGI yield on cost trick to properly work.
I'd like to understand this better.
Let's say I park $10k in AVGO. In 10 years, that $10k grows to, let's say $20k. They keep the dividend at 3%, so when I was getting $300 per year, now it's $600 per year.
Now let's say I instead put the $10k into VIG. What happens differently? I see today its yield is 1.41%. Has that not remained constant as the price has appreciated? Did it use to be higher?
I think ETF's are a really good way to invest in DGI companies if you don't want to deal with individual stock picking or portfolio management.
VIG
Expense Ratio - 0.06%
3YR annual returns - 15.49%
5YR annual returns - 14.82%
10YR annual returns - 12.54%
SHCD
Expense Ratio - 0.06%
3YR annual returns - 18.03%
5YR annual returns - 16.30%
10YR annual returns - n/a
DGRO
Expense Ratio - 0.08%
3YR annual returns - 15.33%
5YR annual returns - 15.57%
10YR annual returns - n/a
The annual income growth may be a bit lumpier because of the continual rebalancing of the portfolio, but overall they hold high quality stocks that any typical DGI portfolio would.
Just for fun, here are some sector based ETF returns.
XLK - Technology
Expense Ratio - 0.12%
3YR annual returns - 25.90%
5YR annual returns - 27.99%
10YR annual returns - 19.19%
XLV - Healthcare
Expense Ratio - 0.12%
3YR annual returns - 12.28%
5YR annual returns - 13.15%
10YR annual returns - 15.16%
XLY - Consumer Discretionary
Expense Ratio - 0.12%
3YR annual returns - 17.14%
5YR annual returns - 18.29%
10YR annual returns - 16.76%
Pretty amazing results really.