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- Опубліковано 2 гру 2020
- There is a sharp divide between those who invest in dividend-paying stocks and those who don’t. Underpinning this is the question of whether dividends are relevant to the evaluation of shares. Today we answer this question by digging into the data and parsing the maths before exploring what the future of financial planning looks like. But first, we open our episode with news from the Rational Reminder community - including the fact that we just passed one million podcast downloads. We then touch on lessons from Seth Godin’s new inspiring book, along with the latest from the financial world. Following this, we dive into a discussion on dividend stocks. We begin by unpacking the assumptions behind Miller and Modigliani’s theory of dividend irrelevance. Host Benjamin Felix presents a case study and applies the Fama-French Model to explain differences in returns on dividend portfolios and if dividends truly affect share valuation. After sharing our practical takeaways from Benjamin’s analysis, we move onto our financial planning topic for the week. From technology to retirement decumulation and demographics, we discuss the five key areas which will most impact the future of financial planning. We then wrap up another informative episode with the bad financial advice for the week. Tune in for more insights into the role of dividend stocks and the future of financial planning.
Books From Today’s Episode:
Practice: Shipping Creative Work on Amazon - www.amazon.com/Practice-Shipp...
Purple Cow on Amazon - www.amazon.com/Purple-Cow-New...
Links From Today’s Episode:
Rational Reminder on iTunes - itunes.apple.com/ca/podcast/t....
Benjamin Felix on UA-cam - / @benfelixcsi
Episode with Ted Seides - rationalreminder.ca/podcast/61
Capital Allocators Podcast - capitalallocatorspodcast.com/
Farnham Street Blog - fs.blog/
The Knowledge Project Podcast - fs.blog/knowledge-project/
Seth Godin - seths.blog/about/
Episode with Dr. David Blitzer - rationalreminder.ca/podcast/54
‘Settling the Size Matter’ - papers.ssrn.com/sol3/papers.c...
Miller and Modigliani | ‘Dividend Policy, Growth, and the Valuation Of Shares’ - www.researchgate.net/publicat...
‘Financial planning: A research agenda for the next decade’ - onlinelibrary.wiley.com/doi/f...
Financial Planning Chart - onlinelibrary.wiley.com/doi/e...
2020 Academic Research Colloquium - www.cfp.net/events/2020/02/20...
Episode with Michael Kitces - rationalreminder.ca/podcast/112
Episode with Josh Brown and Dr. Brian Portnoy - rationalreminder.ca/podcast/126
‘In Defence of Active Management’ - www.moneymarketing.co.uk/anal...
Adriana Robertson - www.rotman.utoronto.ca/Facult... - Навчання та стиль
Good podcast guys! As a decades long mutual fund investor, I knew that post dividend, the added value of the dividend plus NAV equalled the day before, excluding market changes. I see all these "dividend ETF" UA-camrs implying that the dividend is free money. Drives me nuts.
One positive thing for a dividend that might be said goes back to the old days with big brokerage fees on every transaction. If one wanted to get a little cash out of their stock or fund, that involved a transaction with costs. At least with a dividend, you could get a little cash without charges and let the rest of the investment ride. But with fee free brokerages, one can now just sell a few shares and have the cash, or get a rebalance.
A dividend is only a taxable event to me. (I have mostly taxable accounts, little in an IRA)
I've listened to all of your podcasts, so I count for 127 in your totals. :)
These are never long enough. Great work guys!
Finished my degree last week. On to the CFA
This is music to Ben's ears :)
Dividends for life!
Regarding Ben's intro comment that "small cap value premium mostly comes from the short leg".
Intuitively, the "legs" should have same contribution. Say, when you have "good" and "bad" stocks with return "g" and "b", and you long good and short bad, you should have "g" - "b" return, so if you only long good stocks, your return should be "g" = (("g" + "b") + ("g" - "b")) / 2, i.e you capture half of the premium, as "g"+"b" gives no premium.
What am I missing?
Would be interesting to know the leverage criteria XD.
Hi Ben! hey, I was wondering, I get how you explain that Dividends are irrelevant; would share buy backs done by a company also be irrelevant by the same logic? After all, when a company does a share buyback, I own a bigger share of the company, but the company is also poorer by the same amount of money they used to buy out the shares. What are your thoughts?
Dividends are definitely not irrelevant. Yes by that logic it contradicts what there saying.
I've noticed that there seems to be a significant overlapping (at least in this historical moment) between "value" and "high dividend yield" companies. I would like to understand if it's an historical contingency or there is some economic/rational explanation.
High dividend yield companies will tend to have low prices, which is what results in their yield being high. This should always be true.
The thesis is based on the market efficiency principle. On paper it is true, and thus $1 in my portfolio should be equal to $1 in my pocket (disregarding taxes). The main general corcern regarding the market efficiency argument comes from stock buybacks at illogical (inefficient) levels regardless of the company's theoretical best interest - the company management's bonus packages are based on stock valuation at the end of the day.
I'm looking at getting an Ender 3
I can't speak to the Ender 3, but I can tell you that the Prusa i3 MK3S has been phenomenal. It is more expensive than the Ender 3 though.
19:49 / 1:01:36
Is it "passive" for me to invest in the Tech Sector? What about after they removed Google and Facebook and put them in Communications? What if I own Consumer Discretionary? That's 20% Tesla. Who decides this stuff? It's all active unless you use a WORLD INVESTABLE MARKET index. I just like cap weighting, that's active management too.
*With dividends you are forced to pay tax with every dividend. Not really tax efficient. Berkshire doesn't pay for this reason.*
unless you hold in them in TFSA trading account : )
Slickpete83 there are additional withholding taxes from US dividends in TFSA.
@@hangxu2154 very small over the long run , just hold a CAD hedged ETF that holds the US stock you want
@@hangxu2154 Hold the US dividend stocks in a tax sheltered RRSP instead, and there are no withholding taxes from the US side.