Stock dividends

[Anonymous No.26450250]

Redpill me on stock dividends. If I buy something that pays 8%, will I actually get $8 for every $100 worth of stock I own or is there a catch? Besides taxes of course

[Anonymous No.26450270]

>>26450250
yea

[Anonymous No.26450294]

>>26450250
btw buy LUMN instead

[Anonymous No.26450309]

dividends are fucking awful OP.

devalues the stock, signals the company is done innovating, and are not tax friendly at all.

main use of dividends is to shill people on youtube with how you're making $100k a year off of $2 million invested.

[Anonymous No.26450316]

Yep and then 8 - 16 - 32 etc.
Compound interest is a powerful tool

[Anonymous No.26450342]

If a company pays out 8% the stock isn't going to grow much at all. AT&T stock is a prime example. Dividends are the best thing though if you have a multi-million dollar portfolio imo

[Anonymous No.26450461]

>>26450342
>>26450309
yeah i know there isn't much room for growth but I'm more thinking of it as something safe to do after (if) i make it. like put $1M into dividend stocks and live off 80k/year

[Anonymous No.26450480]

Warren Buffett loves dividends and holds a shitload of KO. Oil prices fluctuate, but you won't lose by betting on the beetus. The higher the div, the less likely it is to be sustainable. Lots of people on biz say dividends are bullshit because they are a missed opportunity to sell at a higher cost. They say this because they are faggots who will never make it. There is a larger point, though: an 8% return isn't very impressive if the stock price keeps going down long term.
If you're a burger, some dividends are taxed at a lower rate if you hold the stock long enough. Look up qualified dividends on investopedia.
You can generally get a higher rate with REITs (again, look it up), but those will never be qualified dividends.
Do some research, then drop into /smg/.

[Anonymous No.26450660]

>>26450250
The dividend is decided on a yearly basis by the stockowners at the annual general meeting and is by convention dependent on the years result. No stock will guarantee you any % dividend

[Anonymous No.26450719]

>>26450480
wtf are you talking about. If Warren Buffet loved dividends so much then why does he openly shit on them and refuse to allow BRK to pay out any

[Anonymous No.26450804]

>>26450250
im too lazy to type out a detailed response.
>buy stocks that are typically stable
>pay x$ annually / share price = yield
>as company grows, typically raises dividend
>capital gains + x%($/Avgcost=yield on cost) = return
>over 30yrs end up with yields like buffet( 50% yield on KO )
Slow in the beginning, massive in the end. Like a wizard.

[Anonymous No.26450885]

>>26450804
wouldn't this require me to never spend the yields and just let them compound every year?

[Anonymous No.26450977]

>>26450250
Dividends are a scam.

if you want income then just sell poor mans covered calls.

400K in 25% ITM Apple leaps and selling 15% OTM weeklies will net you 5K a week, thats over 230K per year!!

Dividends are for smooth brain normies who have no mental agility for options

[Anonymous No.26451005]

>>26450804
Not always it depends on the dividend growth rate. If a stock is grows a dividend by 30% a year for five years, then over the next ten grows its divided by 10 and then from then on at 4 percent a year your making a killing and you wouldn't have to reinvest the yield but of course it would help.

[Anonymous No.26451022]

>>26450250
dividends are great if youre in the 7 figure club but otherwise >>26450977 is the way to go for significant passive income

[Anonymous No.26451041]

>>26450719
He loves to receive them, not give them

[Anonymous No.26451048]

>>26450885
I didn't even include that.. your yield dollar doesn't stay static. It typically grows annually, you buy a stock for $10, it pays $0.50 annually. you yield 5%, next year the company raises the dividend to 0.55$. Your yield is now 5.5% on the same $10. Hold a company like KO for 30 years, at $10, That dividend keeps getting raised until your yield on that initial investment is double digits. No dividends reinvested.

[Anonymous No.26451050]

>>26450977
Yeah but what about generational wealth? Coca cola will likely be able to grow their divinded at a rate great than inflation for several generations. Buffet can pass the stock on or put in a family holding company and no one have to work or know anything to make money. Even better buffet got in early enough that he's making like 50% yield each year or something crazy for coke

[Anonymous No.26451083]

>>26450885
It requires you to spend the dividends on buying more stock.

[Anonymous No.26451099]

>>26450977
isnt there an etf that does covered calls and pays out the premiums like a dividend yield so you dont have to do anything

[Anonymous No.26451183]

>>26450977
>400K in 25% ITM Apple leaps and selling 15% OTM weeklies will net you 5K a week, thats over 230K per year!!
Explain what this means for a retard like myself.

[Anonymous No.26451205]

>>26450250
>will I actually get $8 for every $100 worth of stock I own
eventually, yeah

[Anonymous No.26451245]

>>26450977
>>26451183
Selling covered calls doesn't actually work.

That's because due to stock volatility, you get all the negative volatility but none of the positive.

You won't actually make 50% returns selling covered calls, because every couple of weeks the stock will drop by more than the covered calls, that will wipe out your previous gains.

As this happens many times a year, your real return can be as low as 5%

[Anonymous No.26451272]

>>26451183
X trades at $100, you buy 400k worth of call options at the $75 strike, expiring a year out. you then sell calls at the 115$ strike, weekly, the collecting premium, using the 400k buy calls as collateral( as if you owned the shares ) against the sell calls.

[Anonymous No.26451276]

>>26451183
You buy a In the money call of apple say 100, costs 42.88 at todays prices. You buy 100 of these so you shell out 428000

Each call controlls 100 shares, hence you can sell a call againt each parcel of 100 shares, so you cal sell 100 calls.

You decide to sell calls that expire in a week at 15% away from the price of apple (138 current) so about 160. These cost .47 at todays prices. hence you collect .47x 100= 4700 in cash.

If apples prices is below 160 at the end of the week, the call you sold expire worthless and you keep all the 4700.

Now do this every week thats 4700x 52= 244000 in premium you make per year.

[Anonymous No.26451285]

>>26450309
>>26450719
>>26450977
>>26451022
The majority of the growth in the stock market is from reinvested dividends, you absolute brainlets

[Anonymous No.26451308]

>>26451276
This doesn't actually work, every once in a while the stock will drop in that week by much further than the call premiums.

You'll suffer these capital losses occasionally

But you'll make NONE of the weekly capital gains in fluctuations needed to offset these losses.

The premiums and the capital losses will cancel out and you'll make about market returns.

Trust me, options are no free ticket to wealth, otherwise why wouldn't every hedge fund just run Theta gang?

[Anonymous No.26451317]

>>26451050
>wanting your progeny to become lazy consoomer bums that spend their lives giving as much of your hard work to jews as possible
If I was eligible for reproduction I'd make damn sure my children never received a penny. They would have to start out from minimum wage at Wendy's.

[Anonymous No.26451320]

it seems like some of the best divvy stocks actually have low divvy yields like TR is apparently the best ever among rich boomers

[Anonymous No.26451334]

>>26451317
>If I was eligible for reproduction I'd make damn sure my children never received a penny. They would have to start out from minimum wage at Wendy's.

Then you're a terrible parent. Generational wealth is the only way for your children to really become rich. Rags to riches stories are largely hoaxes.

[Anonymous No.26451340]

>>26451245
I dont understand this. The premium collected is yours forever hence each week the stock is below the strike you keep it all, or close it earlier for profit.

Now if the stock moves up the value of your leaps also moves up as the delta is close enough to 1 that its like basically owning the underlying. Volatility is reduced in this strat due to delta of the LEAPS being so close to one, extrinsic value is mostly negated.

[Anonymous No.26451342]

>>26451320
why?

[Anonymous No.26451377]

>>26451285
FIRST OF ALL CITATION NEEDED
SECOND THAT DOESN'T MEAN DIVIDEND STOCKS ARE GOOD TO HOLD THAT JUST MEANS IT'S GOOD THAT OTHER IDIOTS HOLD THEM NUMBNUTS

[Anonymous No.26451388]

>>26451272
>>26451276
fuck i'm too stupid to even understand this. i need to do some reading on investing i guess

[Anonymous No.26451430]

>>26451308
Brother , Delta is close to 1 so its basically owning the underlying.

If covered calls are free money then so a poor mans covered calls. It allows small timers to leverage up and make a decent income.

This is labour intensive and needs you to actively manage the trade everyday. You woud also onyl run this on mega caps i.e Apple, TSM, Microsoft etc to minimise significant drops.

[Anonymous No.26451443]

>>26451340
I used to think like this too until I actually tried this. It didn't work.

>Buy 100 Apple Stock for $100 a share
>Sell weekly ITM premiums for $100 a share at an APR of 40%
>Think I'm going to be making 40% a year!!!!!
>Profit first week from premiums, shares get called and I repurchase more!
>Profit second week from premiums, shares get called and I repurchase more
>Profit again...
>Etc
>Fourth week: Apple shares drop 5%, wiping out all my previous gains!
>Sell covered calls on my Apple Shares that now have a price of $95
>Fifth week: Apple shares rise back up 5% to $100
>However! Because I sold covered calls on those $95 Apple shares, I don't get any of the capital gains from Apple going from $95 to $100
>I missed out on that 5% capital appreication
>Go back to selling premiums on my $100 Apple stocks
>About every fourth of fifth week, stock drops again.

ETC

Selling call options work, until you realize that you get hit hard by every stock drop, but don't ever get to experience the recoveries because the options eliminate your capital gains, even the capital gains from recovering from a drop.

Imagine a stock that rapidly moves between $50 and $150, you suffer everytime it drops, but your options prevent you from recovering when it goes back up. You'd get eaten alive.

[Anonymous No.26451457]

>>26451308
Yeah I remember trying to set up "weekly paycheck" type trades, even back tested them and looked up similar examples. There is no mechanical method to doing this that won't result in some awful losses that make your profits negligible at best after a while. I think you can spot some good opportunities every now and then as a trader but if there was any strategy that worked all the time It would be arbitraged out of existence by hedge funds.

[Anonymous No.26451460]

>>26451342
I pulled that out of my ass. I'm shilling tootsie roll. It's the latest meme

But in my lurking I have noticed that some of the favored divvy stocks seem to be low yield dividends in companies that are either gonna grow or at least not go away. My strategy years ago was to DCA into Ford because the dividend seemed nice but it was one of the worst holds of my life. JNJ is comfy. TSM has been too good to be true. GILD gives a nice dividend but it bleeds the fuck out constantly

[Anonymous No.26451468]

>>26451430
>This is labour intensive and needs you to actively manage the trade everyday. You woud also onyl run this on mega caps i.e Apple, TSM, Microsoft etc to minimise significant drops.

Bro, it's not labor intensive it's signing onto your trading account every week and clicking a few buttons.

If you could actually make a guaranteed 40 - 50% doing this you'd be a billionaire before your 50.

I remember when I discovered this strategy and I was so excited I'd get rich from it, only to try it and slowly realize after months I was making basically market return.

[Anonymous No.26451472]

>>26451317
This is exactly why white people are getting fucked while kikes run the show. Yes, kids need to understand the value of a dollar, but they shouldn't be thrown on their ass and forced into a life of serfdom, they just need enough of a taste of it to terrify them of falling into that life as motivation

[Anonymous No.26451506]

>>26451443
Bro what are you doing, you are doing it all wrong LMAO.
Holy shit dude if it goes ITM just close the fucking trade and net the profit, or roll the option dont let the leaps get assigned.
For fucks sake man this is why it hasnt worked for you.

[Anonymous No.26451526]

>>26451506
If you could actually make a safe 40% return on rolling options, it would be arbitraged out of existence by now.

[Anonymous No.26451535]

>>26451388
Don't worry too much about it. it'll come, Start with learning buying and selling calls. it'll click.
>effectively pretend to own 400k of APPL
>people buy contracts from you, where you agree they can buy your shares at a certain price, they pay you for this contract.
>if they don't buy, you keep the cash.
>if they do, you use your buy to cover for the shares you own them. you still keep the premium.

[Anonymous No.26451587]

>>26451535
owe

[Anonymous No.26451727]

>>26451506
Vvery small technically difference.

[Anonymous No.26452016]

>>26450977
Lmao, if it drops into the $110's again you won't even make back the loss from selling weeklies against it for an entire year straight.

[Anonymous No.26452132]

>>26451727
No man it makes all the difference in the world. By allowing the leaps to get called away you basically lose all the intrinsic value. By closing the trade you might take a hit from the short options price rising but you capture all the intrisic and extrinsic value from the LEAPS.

[Anonymous No.26452167]

>>26452016
In that case dont buy the stock at all cause it might drop and you will lose money.

Deep ITM leaps value is almost all intrinsic delta is close to one so its like buying the underlying.
Thats why its called poor mans covered calls, you put leverage to basically own more of the stock to benefit from price movements and be able to sell covered calls.

[Anonymous No.26452176]

if you sold covered calls at the same time, would that be double dividends? i might do that with some boomer stocks.

[Anonymous No.26452187]

>>26450250

Dividends are fine. 8% yield probably means it’s a stock that will decrease in value though. % return is ultimately all that matter though, you can get that through low-yield or no-yield investments that appreciate in value, then just flip it into div stocks once you need the income stream. Just buy a dividend achievers ETF and don’t stress about individual companies. Also, if you want passive income, use celsius, biz is still sleeping on it and it’s a game changer

[Anonymous No.26452333]

>>26452187
>use celsius, biz is still sleeping on it and it’s a game changer
looks pretty nice, is there a catch? biggest catch i see is keeping your coins on there instead of a hardware wallet and potentially getting fucked

[Anonymous No.26452422]

>>26450250
If you're primarily going the dividends route then try to buy in a tax advantaged account like an IRA to avoid getting taxed on every dividend you receive.

Also, look for stable or growing stocks/funds as opposed to chasing dividends. REITs took a big hit last March but are still at bargain prices. STWD, IVR, TWO, OXLC, RWT, O, MAIN, STAG are some popular options out there. Also check out close end funds such as JEPI, HYT, and EFC. A steady 10 percent annual return is definitely possible with only dividend investing.

[Anonymous No.26452463]

>>26451272
>sell calls
They're called puts and you're in no position to give financial advice before you move out of your parents'

[Anonymous No.26452608]

>>26450250
Forget dividend yields. Pay attention to the payout ratio (dividend ÷ earnings) and earnings growth. Go for low payout, high growth. Over time the effective yield on your investment will grow.

[Anonymous No.26452675]

>>26450719
Buffet likes dividend paying stocks but he prefers to look for investing opportunities to use received dividends within BRK holdings to grow it even further. A company that pays a dividend is a company that is not 100% confident about growth.

[Anonymous No.26452747]

>>26450977
>dude just actively gamble instead of earning money passively
do smoothbrains even

[Anonymous No.26452793]

>>26450480
Based dividend poster. Thank you for your /smg/ posts, too many swing traders and not enough brains.

[Anonymous No.26452909]

>>26450250
They sound great until you realize that
A) you need to a multi million dollar portfolio minimum
B) you do some research and realize inflation is closer to 8% than it is 2%

[Anonymous No.26453041]

>>26452176
If you sold covered calls, you would be liable for the dividends. That means the dividends from your stock would cancel out the dividends from the options you've sold.

[Anonymous No.26453152]

>>26450480
REITs are nice but you hardly ever get a capital gain.

[Anonymous No.26453184]

>>26452793
What does it have to do with brains? Dividends only makes sense if you have a lot of money to begin with, which doesn't apply to most people on /biz/.

[Anonymous No.26453566]

>stock dumps 25%
>passive income plan failed
>OP is poor and homeless again

[Anonymous No.26454138]

>>26451276
How do I learn more about this? Is there any book for the principals?

[Anonymous No.26454180]

>>26452909
>you do some research and realize inflation is closer to 8% than it is 2%
that's not a problem for value investing but investing/asset management in general

[Anonymous No.26454344]

>>26451099
QYLD might be what you're thinking of.
>>26452793
Not that guy, but he's sparked a lot of good discussion in smg. Just an anon trying to carry the fire.

[Anonymous No.26454383]

>>26451377
>sent from my phone via Tapatalk

[Anonymous No.26454471]

>>26452463
your an idiot

[Anonymous No.26454838]

>>26454138
Wheel Strategy, google it.

[Anonymous No.26454980]

>>26453566
>stock dumps 25%
>5% yield just turned into a 6.7% yield

Buy the dip u faggot.

[Anonymous No.26455115]

>>26451041
underrated

[Anonymous No.26455146]

>>26450719
No dividends, no stock splits, and lots of buy backs over the years increase Berkshire's value by creating scarcity. Dividend are great to receive not to pay out.

[Anonymous No.26455444]

>>26451317
>If I was eligible for reproduction
good thing you aren't then

[Anonymous No.26456316]

>>26450719
i love fucking your mom in her asshole anon, doesn't mean i like people fucking mine