2025 / 2026 Investment Thread

[byke]

I don't understand the point of chasing high dividends unless they're qualified dividends with lower taxes. Most are not, which means you're stuck paying ordinary income tax on them. You'd be better off selling holdings when you need to, and just pay capital gains which, if they were held long-term, tops out at only 20%

Dividends generally keep paying every month or quarter when markets are down, or at least the good ones do. The benefit is consistent income instead of drawing from something like savings in a downturn, or even worse selling that stock and destroying future returns. These are more for people that are looking to stop working, which retirees are a large segment of society.

As for taxes, you can live really well in other first world counties at or below our standard deduction, moreso if you're not paying rent. And it's a switch you can flip on/off whenever you want so just flip to reinvest if you want to keep dividends off your income. Travel for a year, go back to work for a year, etc. It might seem like there's no difference when looking at total return, but it can be significantly increased flexibility with less loss on withdrawal than the outright ownership alternative. But a 30 or 40yo with 20 plus to go, yeah just some market etfs and forget about it.

 

[Reli]

Problem is, the vast majority of high dividend payers aren't in tech or any other "growth" sector, so over a long time horizon your total return will be lower. So all those early retirees (30-40 somethings) are gonna be missing the boat on that potential growth.

Even if someone thinks they're only gonna live another 10 years...........Check the returns on SPYD, which is composed of the top 80-90 highest dividend payers in the S&P500. Its share price grew only 64% over the last 10 years, versus 256% for the total S&P500. Even if you factor in its higher yield of 4 something percent instead of just 1 percent, you wouldn't get anywhere near 256%

 

[Caddywumpus]

If i wanted dividends I would invest in AGNC. Monthly dividends reliable income and they have held it steady for over 5 years. Its priced high right now but when it dips to sub $9 its a def buy for me.

 

[byke]

Problem is, the vast majority of high dividend payers aren't in tech or any other "growth" sector, so over a long time horizon your total return will be lower. So all those early retirees (30-40 somethings) are gonna be missing the boat on that potential growth.

Even if someone thinks they're only gonna live another 10 years...........Check the returns on SPYD, which is composed of the top 80-90 highest dividend payers in the S&P500. Its share price grew only 64% over the last 10 years, versus 256% for the total S&P500. Even if you factor in its higher yield of 4 something percent instead of just 1 percent, you wouldn't get anywhere near 256%

Being in or out of tech or growth isn't an inherent positive or negative, because it's relative to goals and timelines and whatnot. And pretty much every covered call strategy is clipping highs in favor of also clipping lows. You're using the loss of potential growth as a universal negative, but it is not when it's desired for the purpose of limiting loss in downturns. This is not a strategy for peak growth at some point in the future. Run a test for this scenario, you're 65, you don't know if you will live 1 year or 35 years, you want to retire right now,, you need as consistent income as possible for the rest of your life, you have $300k in your 401k. Go.

 

[Reli]

Being in or out of tech or growth isn't an inherent positive or negative, because it's relative to goals and timelines and whatnot. And pretty much every covered call strategy is clipping highs in favor of also clipping lows. You're using the loss of potential growth as a universal negative, but it is not when it's desired for the purpose of limiting loss in downturns. This is not a strategy for peak growth at some point in the future. Run a test for this scenario, you're 65, you don't know if you will live 1 year or 35 years, you want to retire right now,, you need as consistent income as possible for the rest of your life, you have $300k in your 401k. Go.

There are some advisors/bloggers who say retirees should just leave everything in the S&P500.....No bonds, no CDs, nothing else. It's not something I would probably ever do, but I'm just saying it's not unheard of. Maybe they're only thinking of people who have $1-2M plus, not just 300K

 

[Holeshot]

Margin loans or SBLOCs allow borrowing much of the equity out of the security with the advantage of still being subject to the dividend yield. The danger is in margin calls on ML's, but with consistent dividend payment history, it should be simple enough to collateralize a call with Treasuries, etc.

 

[byke]

There are some advisors/bloggers who say retirees should just leave everything in the S&P500.....No bonds, no CDs, nothing else. It's not something I would probably ever do, but I'm just saying it's not unheard of. Maybe they're only thinking of people who have $1-2M plus, not just 300K

Money in this context is essentially bandwidth and $1-2m provides people with a ton of bandwidth to do things in a variety of ways and handle a variety of problems down the road. Unfortunately the median for 65-74yo's is about $200k, so leaving that lump as intact as possible particularly later in life when the lump would otherwise be approaching zero, is creating bandwidth that otherwise would not have existed. Clipping the peaks in order to clip the valleys is a valid strategy found in all sorts of investment mechanisms, even etfs are making a similar trade.

 

[GAJ]

My positions are up almost 10 percent YTD.

Defense stocks and international stocks.

Wonder what will happen to the latter now that tariffs have been struck down.

 

[Caddywumpus]

Same im up 10% right now. MSCI ACWI is up 9.14 so im edging them out slightly.

 

[FXCLM5]

Supreme Court says taco tarriffs are illegal.

Same day says 10% tarriffs for everything and then says I will just do tarriffs in some other way and we will be in court for 5 years+ over these refunds.

CEOs and CFOs were literally cheering and toasting and now this.

Who knows what will happen come Monday meow

 

[Holeshot]

There was always a backup plan....

 

[GAJ]

Supreme Court says taco tarriffs are illegal.

Same day says 10% tarriffs for everything and then says I will just do tarriffs in some other way and we will be in court for 5 years+ over these refunds.

Thing is, Congress in 150 days has to vote to keep that new tariff in place.

Will they do that?

Methinks not.

 

[FXCLM5]

Thing is, Congress in 150 days has to vote to keep that new tariff in place.

Will they do that?

Methinks not.

Agreed, but will just spin it in some other way and drag it out.

I do hope small businesses get some kinda break, the big boys will obviously push prices down to consumers, but small businesses don't get that luxury

 

[byke]

All I know is that it's nice that gargling noises don't come through in text, otherwise some posts would be incomprehensible.

 

[Blankpage]

There was always a backup plan....

Concepts of a plan

 

[900ss]

it doesn't have much of a brain, and as a consequence cannot conceptualize anything. Except when it feels wronged.

 

[Blankpage]

Deflating how? It's just paused in its grown, not contracted at all.

AMD vs. NVDA — Stock Comparison Tool

Compare AMD and NVDA across key investment metrics, including historical performance, risk, expense ratio, dividends, Sharpe ratio, and more, to determine which asset aligns better with your portfolio strategy.

portfolioslab.com

Keep a close eye on it. Don’t be caught holding the bag.

 

[Reli]

it doesn't have much of a brain, and as a consequence cannot conceptualize anything. Except when it feels wronged.

Or "witch hunted"

 

[mercurial]

I am really really not a fan of covered calls, except with very strict application (buy out of the money, .1 delta or less.) They are like an extra small dividend payment. All of those ETFs that buy at-the-money covered calls on the SPY are not a good deal. You lose so much upside and the premium isn't even that great, nor will it protect you substantially in a major downward trend.

If security is what you are after, you need to do an equity collar. That's where the covered call premium is used to buy a put. You don't get any extra return but you do get downside protection at the cost of more limited upside.