Asset Classes

Free investment financial education

Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Put Down the Dividends and Slowly Back Away

Posted September 1, 2023 at 11:15 am
Validea Capital Management

Investors love dividends. The idea of having money deposited into your account on a regular basis can be a very attractive one. As a result, dividend-based investment strategies have become very popular. But the reality of dividend-based strategies is often very different than what the marketing behind them would lead you to believe. In this episode, we examine the reality of dividend focused investing strategies and look at whether investors might be able to accomplish their goals more successfully with other approaches.

  • 0:35 – Why do investors love dividends so much?
  • 03:08 – Why do companies prioritize paying dividends over other capital allocation choices?
  • 04:16 – Long-term investing returns and dividends
  • 07:34 – Dividends as a less than optimal value metric
  • 09:28 – Dividends, buybacks and capital allocation
  • 11:31 – Dividends as a quality metric
  • 15:34 – Good and bad buybacks
  • 18:18 – Pay the dividend at all costs
  • 20:38 – Synthetic dividends as a dividend replacement and taxes
  • 26:07 – Synthetic dividends and retirement accounts
  • 27:17 – Dividends compared to other types of cash flows

Watch on YouTube

Originally Posted August 30, 2023 – Put Down the Dividends and Slowly Back Away

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

Leave a Reply

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Validea Capital Management and is being posted with its permission. The views expressed in this material are solely those of the author and/or Validea Capital Management and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.