1nvest wrote:Itsallaguess wrote:
...is almost guaranteed to be completely irrelevant as a valid criticism against income investing...
Obviously only a proportion of investors are income investors, for others the amount/timing of dividends is largely irrelevant other than being a cost/tax event that might otherwise have been avoided.
You're wilfully missing the point yet again, and one has to ask why that might be the case....
The timing of dividends is largely irrelevant *even to* income investors, due to the extremely high likelihood that some form of 'holding account' is used to capture the ongoing dividend stream, and where
some level of capital-buffer is highly likely to be built up before ongoing 'payments' to the income investor are then carried out.
If you could explain which of the above detail you're not quite grasping, then I'm happy to help with further detail if necessary, but to give another example of how your persistent and wilful misrepresentation might be mirrored against TR-based investors who might sell down holdings to generate spending, I can offer the following -
1. A TR-investor wants to go shopping for his weekly shop on Saturday - T+3 broker sales mean that he needs to know exactly how much that shopping is going to be, and to sell enough shares on Wednesday to specifically cater for that shopping. He's also incurred a set of broker fees to generate his Saturday shopping money, and of course he's also running the risk that he'll actually spend more on his meal three days later than he's taken out of his TR-based portfolio on the Wednesday....
2. A TR-investor also then wants to go out for a meal on the following Monday night, so T+3 broker sales mean that he needs to know exactly how much that meal is going to be, and then needs to sell just enough shares on Friday to specifically cater for that meal. He's also then incurred another costly set of broker fees to generate his Monday meal money, and of course he's also now running the risk that his meal on Monday night might actually be more expensive than he initially planned for, clearly running the risk that he's not got enough money to pay for it....I won't go on, but of course I would hope that you get the point 1nvest, in that the above set of steps is of course a
ridiculous example of how a TR-based investor who generates his spending through share-sales *might* carry out a costly, risky (sales might not actually match subsequent three-day-later spending..), and clearly over-complicated cash-generating process, but
it really is no more ridiculous an example
than you repeatedly trying to suggest than an income investor who might be going out for a meal on Saturday night needs a dividend to land the Friday before to enable him to actually pay for it....
I would hope that the above explanation would be enough to enable a level of enlightenment in you that might prevent the repeating of your '
dividend payment timings don't match spending' criticism, but please, if you continue to think it's a valid one, can you please explain in clear detail why you think that's the case, and why such 'matching' criticism would not *equally apply* to TR-based investors as well, given the above *equally valid* TR-based steps, following the same timing-based and cost-based logic as your own argument...?
Cheers,
Itsallaguess