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19281558 No.19281558 [Reply] [Original]

Look, I respect Jack Bogle and index funds, I really do. The numbers don't lie. They match their market indices which is usually good enough to outperform their actively managed counterparts. They have low turnover and thus are usually subject to long term capital gains taxation rather than regular income taxation. They have very low expense fees so most of your investment remains solely your money.

However, I've been going through mutual funds of all kinds and I'm seeing that many of them pay out significantly higher distributions in dividends and capital gains than index funds typically do. So much so in fact that many of them effectively pay out distributions at a higher rate than they retain capital appreciation. In other words, the distribution side of their returns often exceeds the capital appreciation side of annual returns. If you looked only at their annual returns you would see worse numbers than comparable index funds but if you dig deeper at their annual performance you would find that they pay out more than index funds. Judging from ten year returns many mutual funds seem to show promise as passive income sources even when accounting for normal income tax rates.

I cannot help but feel like I am missing something though. Like I have overlooked something big that makes more sense. Or is it simply a matter of investment philosophy? Many people want their money locked up until they are ready to sell and what I described just now is simply unacceptable to that common philosophy. On the other hand, if one is investing for income would this not be valuable information that might very well defy common knowledge?

>> No.19281705

Jack Bogle died from sucking a big fat nigger dick. If you aren't all in on a broadly diversified portfolio of ultra high dividend funds (stocks + bonds) you are never going to make it.

>> No.19281937

>>19281705
So am I on to something? Is there a wool being pulled over our eyes?

>> No.19282008

>>19281558
Possibly.
Keep in mind this "INDEX FUNDARINOS!" mantra is riding high off a century of 10% average annual stock market returns and 5% annual bond market returns.
Bogle himself said he expect returns from stocks and bonds to be much lower going forward.
There's some point at which the returns from indexing are low enough that you might as well take a chance on DIY active investing, if you're intelligent enough and have the time and temperament.

>> No.19282055

>>19282008
> might as well take a chance on DIY active investing, if you're intelligent enough and have the time and temperament.
yeah. I see a future where the only real returns go to people starting businesses/buying up land & real estate, or just buying a suicide stack of stocktwits' favorite pinksheet. The stock pond is becoming over fished, and now any retail investor who wants to make real money just has to look elsewhere. Here's hoping blue chip divvy's are enough to weather the low-return storm that's brewing.

>> No.19282086

>>19282008
Think income investing might become the next wave? People wanting a return on capital in the form of cash rather than promises of hopes and dreams? Because right now it looks like many actively managed mutual funds are actually quite good at delivering on income distributions compared to index funds - mainly as realized capital gains. And even if they are not taxed as long term capital gains they come out to higher yields per share over a ten year period. To say nothing of investing in single stocks that pay higher dividends than a typical index fund or ETF would.

>> No.19282092

>>19282008
I'm kinda on your thinking here anon. Index funds are great while everything is on the up, but when shit hits the fan start looking for those mid/low caps in the fund that are ripe for active investing.

Look at the absolute dogshit that is getting propped up in QQQ at the moment for example. I think a mix of both is the way to go, as long as JPOW has his finger on the printer, index funds are your hedge for active plays on bullshit.

>> No.19283139
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19283139

>>19281558
youre missing a lot bro
you know there are indexs that track junk/high yield, div aristocrats, etc if ur only looking at yield and not cap appreciation

>> No.19284076

>>19283139
I notice that yields only seem to refer to dividends but not to realized capital gains from reallocation and selloffs. It seems to be second, hidden layer of income in both index funds and actively managed funds even moreso.

That said, have any recommendations?

>> No.19284146

>>19282092
What do you look for in these circumstances?

>> No.19284261

>>19282092
QQQ has better "dogshit" than SPY though, desu. Active investing is where the wealthy put their money, not in indexes. Indexes preserve wealth for upper middle to lower class, active investing creates wealth

>> No.19284302

>>19281558
Does he hold ARPA for the MPC bubble though? that's all I want to know.

>> No.19284478

>>19284302
He's dead, anon

>> No.19284776

>>19284261
Now when you say "active investing" are you talking about actively managed mutual funds, doing it yourself, or both?

>> No.19284833
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19284833

am i gonna make it?

>> No.19284837

>>19282092
What dogshit? Are the top 5 businesses by market cap receiving bailouts?