/biz/ - Business & Finance

>>937941
Suprise motherfucker: I've got decades of investing experience and a multi-million dollar portfolio that I self-manage.

Thanks for the chuckle, kid. You can go cry in a corner now.

>>934131
Not my cup of tea, especially since its not legal in my state. Probably not a good idea for an officer of the court to get involved in that business, tbh.

>>934155
Travel, relax, work on the house and car, run marathons, ride my motorcycle, etc. Normal stuff, I guess. Thinking about buying a lakehouse in Michigan or Wisconsin.

>>934196
Finances are good. Not enjoying this year's turbulence in the markets, but it's nothing to lose sleep over. Feels a lot like 2011 tbh, which people seem to have already forgotten.

Personally I'm not a fan of commodities, and I haven't shorted stocks since 2000. Its just not how I invest anymore.

>>934079
Between 13 and 14, down from an intra-year high of 15.

>>934102
>How many are actively managed?
15 funds, 28% of my Vanguard portfolio by dollar.

>>933677
I own more than 40 separate funds, and that's a retarded number. I didn't set out to own that many; it just sort of happened as I extended my diversification and/or as Vanguard offered new, desireable options.

If I could do it over, I could easily get it under 20 without losing anything that I care about. Probably not less, however, as I like to carefully manage my allocations. You need a broad selection of funds to truly make that possible.

So I guess my answer is that anything above 20 (plus or minus a few) is retarded.

>>929137
>Make some better bait next time ihaz
Why would I post this? The only reason I opened the thread is because the obvious downfall of this idea is that the students would declare bankruptcy and terminate the contract that requires them to pay future earnings. Did you forget that I'm a bankruptcy lawyer?

I've come up with much better bait that this. My bait is legendary.

>>898111
Thanks. I'm duly chastised and humbled. Obviously I'm a complete retard and you're a genius for pointing it out to the world. I'm confident that you'll have the most upvoted comment in this whole thread.

>pic not related. honestly. just a random image. doesn't apply to you, snowflake.

>>898083
>If you really believe value investing outperforms growth strategies I actually pity you as you deliberately prove intensity of your stupidity and call it a clever idea.
Kek. I haven't talked once about value investing in this thread because the tax attributes of value stocks are really hard to pigeonhole. They tend to run the gambit between dividend characteristics and growth characteristics, so you can't draw easy tax-based conclusions about them.

Omar, if you want to have a discussion about the merits of value stocks, please feel free to start your own thread. I'll jump in if I feel that I can add anything to the discussion. But even with all your Saudi oil money and power, its still rude to try changing the topic of a thread midway through. Your father would be very displeased with you.

>>898084
>>898085
Thanks. It's nice to see there are some intelligent people still here.

>>898090
>Don't most decent dividend stocks give you the option of paying out the dividend in shares?
Sure, but the dividends are still taxable the same as if you received cash. A dividend re-investment plan (DRIP) won't save you from the tax consequences.

The only way to do that is by putting your high-dividend stocks into your 401k, IRA or similar tax-advantaged account. That's what I do.

>>898105
>They are usually mature companies and use their profit to distribute to investors.
Worse yet, many of the high-dividend energy stocks and trusts have finite lifetimes, meaning the stock price must by definition fall with the passage of time. And yet people still buy these things because of the gaudy yield. *sigh*

>>898083
>If you really believe value investing outperforms growth strategies I actually pity you as you deliberately prove intensity of your stupidity and call it a clever idea.
Kek. I haven't talked once about value investing in this thread because the tax attributes of value stocks are really hard to pigeonhole. They tend to run the gambit between dividend characteristics and growth characteristics, so you can draw easy tax-based conclusions about them.

Omar, if you want to have a discussion about the merits of value stocks, please feel free to start your own thread. I'll jump in if I feel that I can add anything to the discussion. But even with all your Saudi oil money and power, its still rude to try changing the topic of a thread midway through. Your father would be very displeased with you.

>>898084
>>898085
Thanks. It's nice to see there are some intelligent people still here.

>>898090
>Don't most decent dividend stocks give you the option of paying out the dividend in shares?
Sure, but the dividends are still taxable the same as if you received cash. A dividend re-investment plan (DRIP) won't save you from the tax consequences.

The only way to do that is by putting your high-dividend stocks into your 401k, IRA or similar tax-advantaged account. That's what I do.

>>898105
>They are usually mature companies and use their profit to distribute to investors.
Worse yet, many of the high-dividend energy stocks and trusts have finite lifetimes, meaning the stock price must by definition fall with the passage of time. And yet people still buy these things because of the gaudy yield. *sigh*

>>898005
>>898011
Kek. Comedy gold.

Are you the chip-warmer guy?

>>898019
>I still don't agree because reinvested profit can be taxed just as much as dividends
I already explained this. >>897405

>>897989
>'m not talking about bull/bear market condition, but state of the sector. maybe you're misunderstanding that.

"Consider two equivalent stocks -- a growth stock (Stock G) and a high-dividend stock (Stock D) -- both of which yield 10% per year."

The example assume equivalent companies with equivalent yields. It's literally the perfect apple-to-apples comparison. If you want to change the assumptions about annual yields, please feel free to make up your own example. But don't change the fundamental premise of my teaching exercise and then claim that my conclusion was wrong.

>>897954
>Your theory only holds up if you're an american investor using american brokers exclusively on corporations based in the maledives operating in unsaturated markets.
Look kid, it's not a theory. It's an example. I.e., an intellectual exercise to demonstrate a point. This is a common teaching tool that you should have first encountered in elementary school.

Are there really so many dim-witted people out there that they don't know what a hypothetical means?

As for my example, it does indeed only apply in situations where dividends are taxed. Therefore I explicitly excluded tax-advantaged accounts right in my original post. If your dividends are not taxed for any other reason, such as your local tax regulations, then the same caveat applies. That should be evident from the context -- since the entire illustration is about taxing dividends -- but obviously you're the kind of person who needs things spelled out.

The example has NOTHING to do with American brokers or not. It's about taxes, which are dependant on your domicile not the domicile of your brokerage.

The example has NOTHING to do with the market conditions or differences between the exemplar companies. The example states right in the premise that the companies are equivalent and generate the same return. If you change the premise, then you change the example. Again, you should have learned this by around age 8 or 9, but its never too late.

>>897531
>This is either a troll or you are an idiot for even considering this.
Why? Its exactly the same as falling below the minimum balance requirement on your brokerage or fund account. I don't know a single investment institution that doesn't follow these exact same procedures.

>>897444
>his theory that a growth stock will ALWAYS grow and that a dividend stock ONLY has a dividend and doesn't grow is bullshit
It's not a theory. It's a hypothetical example to demonstrate a point about taxes.

Why am I not surprised that it went over your head.

>>897381
>Aren't you just front loading the taxes with dividends, instead of back loading when you sell later on ?
Paying taxes later is always better than paying now. Paying now depletes my capital, meaning I have less money to invest and grow over time. Paying later means I've already earned the benefit of compounding that money, possibly for decades. Its not that you pay less tax by deferring it; its that you get to keep that money for a longer time so it can work for you.

>Also, some companies do offer a discount for DRIPS
Fair point, but that's still the exception rather than the rule. And note that I didn't even include commissions for reinvesting dividends in my example above. For any dividend stocks without a DRIP plan, you can't reinvest that cash without paying the toll.

>in my current position I feel pretty comfortable with dividend stocks so thats where i'm putting my money
If you're an older investor, or need the income, that a fine choice. If not, then its pretty hard to defend putting all or most of your eggs into a basket that underperforms comparatively in the long run. Better to spread your bets around. Diversification is a thing because it works.

Good luck with your financial goals.

>>897381
>Aren't you just front loading the taxes with dividends, instead of back loading when you sell later on ?
Paying taxes later is always better than paying now. Paying now depletes my capital, meaning I have less money to invest and grow over time. Paying later means I've already earned the benefit of compounding that money, possibly for decades. Its not that you pay less tax by deferring it; its that you get to keep that money for a longer time so it can work for you.

>Also, some companies do offer a discount for DRIPS
Fair point, but that's still the exception rather than the rule. And note that I didn't even include commissions for reinvesting dividends in my example above. For any dividend stocks with a DRIP plan, you can't reinvest that cash without paying the toll.

>in my current position I feel pretty comfortable with dividend stocks so thats where i'm putting my money
If you're an older investor, or need the income, that a fine choice. If not, then its pretty hard to defend putting all or most of your eggs into a basket that underperforms comparatively in the long run. Better to spread your bets around. Diversification is a thing because it works.

Good luck with your financial goals.

>>897243
With minimums that low, it sounds like some kind of direct deposit plan. Investment companies make these available to attract new, young investors just starting out. The key is that they require you to make regular (monthly) deposits, otherwise you're not worth their time.

Do you have a job? If no, then stop reading right now, go away, and come back when you have a steady income.

If yes, then can consider investing AFTER you set aside an emergency fund of 3-6 months living expenses in cash in a separate bank account.

If you miss a deposit (more likely 2 or 3) they will sell your fund holdings and mail you a check. They don't keep your money; they're not thieves.

>>897253
>Oh I know its not guaranteed, but you can find companies that have a long history of increasing dividends throughout the years.
And I can find companies with a long history of price growth throughout the years.

There's nothing special about dividend stocks in terms of finding good, stable investments with reliable year-over-year yields. And the growth stocks (and value stocks, for that matter) don't have adverse tax consequences for long-term investors like dividend stocks.

But as you say, to each their own.

>>897253
>Oh I know its not guaranteed, but you can find companies that have a long history of increasing dividends throughout the years.
And I can find companies with a long history of price growth throughout the years.

There's nothing special about dividend stocks in terms of finding good, stable investments with reliable year-over-year yields. And they don't have adverse tax consequences for long-term investors.

But as you say, to each their own.

>>897204
>You're not gonna make it bruh
I like my chances.

>>897212
>You are either a total failure or maybe you are just too young.
Option C?

>>897141
>With the dividend paying stock you're at least guaranteed a return
No you're not. First, dividends aren't guaranteed. Second, a stock that pays a 6% dividend but loses 8% in value over a year leaves you with a negative 2% return at the end of the day (before taxes). And in the real world, many dividend stocks are subject to price erosion or price stagnation because the company isn't growing. P.S. Guess when companies start to cut their dividends ... when economic conditions get tough (i.e., the same time that growth stocks start slowing down). You can't escape market risk and market volatility with dividend stocks.

Return is return is return. What matters is whether your net account balance is going up or down. Sometime dividend stocks will outperform growth stocks, and sometimes the reverse. Best approach is to own both.

>At the risk of being thick
Yeah, you're being a little bit thick, but that's ok. I was giving a *hypothetical* example to prove that even if you have two equally performing stocks, the growth stock is going to getter better long-term performance because of the tax hit on the dividends. Its an intellectual exercise designed to help understand one of the weaknesses of dividend investing. Nothing more; nothing less.

>>897029
>If you don't judge people based on net worth, you don't like money at all, if you don't like money at all, you'll lose them sooner or later. I love money, I want money, I judge people based on their net worth. I don't care about ethics, social justice or any kind of different bullshit pseudo material. There is only one true measure and it will always be net worth.
Jesus. Between your Google Translate quality English skills and your sociopathic life views, you might be the most retarded person on the board. Any one who takes any advice from this "person" should seriously question their own judgment.

>you have fucked me over and I want to fuck you over
Seriously, wtf. I want to be embarrassed and ashamed for you, but I just can't stop laughing.

>Also dividend paying stock do well better than non dividend paying stock in the long run.
I've already provided a comprehensive mathematical example proving otherwise. You've posted nothing but ad hominem attacks and (highly) dubious personal opinions. You have no facts and no data.

Look kid, even on 4chan we try to have intelligent discussions in intelligent threads, especially on this board. You're either a troll or a mental case, and either way your kind isn't wanted here. /b/ or /pol/ would be right up your alley.

>>896413
>>male, 24
>>current dividend income from the above ~ $20,000 a year
>>net worth $760,000
Why would post this? Do you think it makes your nonsensical post any more credible?

Fine then. I earn $400,000/year in dividends, interest, and fund distributions -- 20 times what your make. My net worth is well over 18x yours. So by your own logic, you should leave /biz/ forever for being such a poor fuckwit.

Fortunately for you, I don't judge people based on their net worth, and I certainly don't judge the quality of their posts based on how rich or poor they are. I judge posts based on the quality of the information presented.

And you, son, are full of shit. Dividend paying companies are subject to the same market forces and long-term volatility as growth companies. For you to believe otherwise displays an incredible degree of financial naivete. I'm sure you'll learn your lesson (painfully) in time.

>P.S. Fuck off with the passive-aggressive bullshit. You want to disagree with something I said? Fine, state so clearly and convincingly, with evidence. Otherwise, fuck off back to /pol/ kid.

OUTSIDE a tax-advantaged account, a dividend stock will lose out to a growth stock over time because the dividends are taxable as long-term capital gains. This eats into your investment capital, and saps your compounding.

Consider two equivalent stocks -- a growth stock (Stock G) and a high-dividend stock (Stock D) -- both of which yield 10% per year. Stock G earns its 10% by price accumulation alone, and Stock D earns its 10% by paying a 10% cash dividend. You own 1 share of each, and they are both worth $100/share. At the start, therefore, both Stock G and Stock D are worth $100.

At the end of 1 year, Stock G is now worth $110 (10% growth), and Stock D is still worth $100 but has paid you a $10 dividend which you re-invest. Your return on both stocks is the same -- before taxes. After taxes, however, Stock G is still worth $110 (no tax consequences) but Stock D has only returned you $108 because you paid 20% in capital gains taxes on the dividends. (I'm using 20% to keep the math simple in this example, but the principle is the same for any tax rate.) So after one year, Stock G is ahead by $2.

After year two, Stock G is now worth $121 ($110 x 10%), and stock D is worth $108 ($100 original + $8 reinvested) but has paid you a $10.80 dividend, reduced by taxes to $8.64, for a total gain of $116.64. Stock G is now ahead by $4.36

Hopefully you can now see where this is going. Every year the spread between Stock G and Stock D is going to get wider and wider because taxes aren't depleting any of your Stock G capital.

INSIDE a tax-advantaged account, you don't suffer the tax hit when dividends are declared. You get to reinvest the full amount. Therefore, inside a tax-advantaged account, growth and distributions both add EQUALLY to your growth and your compounding. So what you should be focused on is maximizing your overall return (growth PLUS dividends) instead of focusing on one or the other.

>>890722
>Did you ever invest with any of your clients and if so, how did it turn out?
Yes, I did quite a few co-invests in hedge funds, private equity funds, and one direct investment. Maybe $1.2 million in the aggregate.

A few of the riskier funds did well, beating the markets by 5-8% year-over-year. Most of the funds were +/- 2% to the market. The direct invest was a bust, but that was only $10K. Overall, I was left mostly unimpressed by hedge funds and private equity funds, and have not invested any new money in them in the last eight years.