Vanguard High Dividend Yield Index Fund

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KEotSK66
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Re: Vanguard High Dividend Yield Index Fund

Post by KEotSK66 » Thu May 21, 2020 9:28 am

frequently when one invests for dividends/income they don't care about relative performance, they're concerned with positive cash flow
"i just got fluctuated out of $1,500", jerry

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Re: Vanguard High Dividend Yield Index Fund

Post by jeffyscott » Thu May 21, 2020 9:50 am

marklearnsbogle wrote:
Thu May 21, 2020 8:51 am
22twain wrote:
Wed May 20, 2020 4:18 pm
I'm surprised that no one has yet explicitly compared the total return of Vanguard High Dividend Yield with Vanguard Total Stock Market.

Here's a Morningstar growth chart that compares the admiral shares of these two mutual funds (VHYAX and VTSAX). The results should be practically the same for the equivalent ETFs, VYM and VTI. Each fund starts with an investment of $10K, and all dividends are reinvested. You can change the starting and ending dates by entering new ones just above the left side of the chart.
Thanks for this! Looks like VTSAX comes out higher even with changing the starting/ending dates. Lower costs, bigger returns.
Of course it does, you are looking at a period where growth has beaten value.

From the date of inception of VHYAX, near the end of 2006, there is little difference between the two funds until after 2016. And, in fact, VHYAX was ever so slightly ahead as of the end of 2016. So it's really just a few years of recent out-performance you are looking at.

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Re: Vanguard High Dividend Yield Index Fund

Post by Vanguard Fan 1367 » Thu May 21, 2020 5:54 pm

marklearnsbogle wrote:
Thu May 21, 2020 8:51 am
22twain wrote:
Wed May 20, 2020 4:18 pm
I'm surprised that no one has yet explicitly compared the total return of Vanguard High Dividend Yield with Vanguard Total Stock Market.

Here's a Morningstar growth chart that compares the admiral shares of these two mutual funds (VHYAX and VTSAX). The results should be practically the same for the equivalent ETFs, VYM and VTI. Each fund starts with an investment of $10K, and all dividends are reinvested. You can change the starting and ending dates by entering new ones just above the left side of the chart.
Thanks for this! Looks like VTSAX comes out higher even with changing the starting/ending dates. Lower costs, bigger returns.
yes VTSAX rocks. If you look at the returns of the VYM or VHYAX you will note that someone like me who owned the fund since 2014 got a respectable return. Other Bogleheads point out that VYM is a stock fund but I will go with Charles Ellis and use it as sort of a proxy for part of my bond percentages since bond yields are so poor.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."

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FelixTheCat
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Re: Vanguard High Dividend Yield Index Fund

Post by FelixTheCat » Fri May 22, 2020 1:33 pm

abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Felix is a wonderful, wonderful cat.

hoops777
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Re: Vanguard High Dividend Yield Index Fund

Post by hoops777 » Fri May 22, 2020 2:00 pm

FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Take a look at SCHD.100 stocks that are well screened.
K.I.S.S........so easy to say so difficult to do.

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Re: Vanguard High Dividend Yield Index Fund

Post by dru808 » Fri May 22, 2020 3:02 pm

hoops777 wrote:
Fri May 22, 2020 2:00 pm
FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Take a look at SCHD.100 stocks that are well screened.
This is my favorite of the dividend ETFs.
60% US equity | 25% International equity | 15% US Treasury bonds

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abuss368
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Re: Vanguard High Dividend Yield Index Fund

Post by abuss368 » Fri May 22, 2020 3:16 pm

FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
The international high yield fund, I would think, would not be 100% qualified dividends at the lower preferred rate of 15%, and would involve the foreign tax credit.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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abuss368
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Re: Vanguard High Dividend Yield Index Fund

Post by abuss368 » Fri May 22, 2020 3:18 pm

hoops777 wrote:
Fri May 22, 2020 2:00 pm
FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Take a look at SCHD.100 stocks that are well screened.
SCHD - Yield is 3.58% A little under Vanguard but pretty much the same. Vanguard's fund is an index offering. Is SCHD an index fund?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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abuss368
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Re: Vanguard High Dividend Yield Index Fund

Post by abuss368 » Fri May 22, 2020 3:19 pm

dru808 wrote:
Fri May 22, 2020 3:02 pm
hoops777 wrote:
Fri May 22, 2020 2:00 pm
FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Take a look at SCHD.100 stocks that are well screened.
This is my favorite of the dividend ETFs.
Please elaborate!
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

hoops777
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Re: Vanguard High Dividend Yield Index Fund

Post by hoops777 » Fri May 22, 2020 5:44 pm

abuss368 wrote:
Fri May 22, 2020 3:18 pm
hoops777 wrote:
Fri May 22, 2020 2:00 pm
FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Take a look at SCHD.100 stocks that are well screened.
SCHD - Yield is 3.58% A little under Vanguard but pretty much the same. Vanguard's fund is an index offering. Is SCHD an index fund?
I believe it is based on an index that has 4 different criteria like earnings,consecutive years paying dividends ,etc. Simple to look up.
K.I.S.S........so easy to say so difficult to do.

columbia
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Re: Vanguard High Dividend Yield Index Fund

Post by columbia » Fri May 22, 2020 7:37 pm

Stayed SEC yield is higher began the VG intermediate corporate fund. I presume that’s a newish development?
If you leave your head in the sand for too long, you might get run over by a Jeep.

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abuss368
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Re: Vanguard High Dividend Yield Index Fund

Post by abuss368 » Fri May 22, 2020 7:49 pm

columbia wrote:
Fri May 22, 2020 7:37 pm
Stayed SEC yield is higher began the VG intermediate corporate fund. I presume that’s a newish development?
Lost me. This is a stock fund.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

columbia
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Re: Vanguard High Dividend Yield Index Fund

Post by columbia » Fri May 22, 2020 8:24 pm

abuss368 wrote:
Fri May 22, 2020 7:49 pm
columbia wrote:
Fri May 22, 2020 7:37 pm
Stayed SEC yield is higher began the VG intermediate corporate fund. I presume that’s a newish development?
Lost me. This is a stock fund.
Some use these funds as pure dividend generators; whether that’s wise, I don’t have an opinion.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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abuss368
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Re: Vanguard High Dividend Yield Index Fund

Post by abuss368 » Mon May 25, 2020 8:37 pm

marklearnsbogle wrote:
Thu May 21, 2020 8:51 am
22twain wrote:
Wed May 20, 2020 4:18 pm
I'm surprised that no one has yet explicitly compared the total return of Vanguard High Dividend Yield with Vanguard Total Stock Market.

Here's a Morningstar growth chart that compares the admiral shares of these two mutual funds (VHYAX and VTSAX). The results should be practically the same for the equivalent ETFs, VYM and VTI. Each fund starts with an investment of $10K, and all dividends are reinvested. You can change the starting and ending dates by entering new ones just above the left side of the chart.
Thanks for this! Looks like VTSAX comes out higher even with changing the starting/ending dates. Lower costs, bigger returns.
Appears the two funds perform close to each other.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

tj
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Re: Vanguard High Dividend Yield Index Fund

Post by tj » Tue May 26, 2020 9:36 am

abuss368 wrote:
Fri May 22, 2020 3:18 pm
hoops777 wrote:
Fri May 22, 2020 2:00 pm
FelixTheCat wrote:
Fri May 22, 2020 1:33 pm
abuss368 wrote:
Tue Mar 17, 2020 9:37 pm
Here were my original thoughts. For a retiree (or any investor) who desires additional dividend income, I would think this one fund would compliment the Total Stock Index.

Vanguard High Dividend Yield - 3.66%

REITs - 3.22% but it really is not this high!!! That "yield" for lack of better terms is comprised of three points: dividends, capital gain, and return of capital. Over 1/3 is a "return of capital". The adjusted yield is 2.37% per Vanguard's website: https://personal.vanguard.com/us/FundsY ... undId=5123

Advantages
* Importantly an investor would not be taking specific sector risk.
* Fund holds more companies than REIT fund.
* Closely mirrors Total Stock.
* Tax on dividends should be 15% vs. Ordinary income tax rates for REIT.
* Lower expense ratio than REIT.
* Not as interest rate sensitive as REIT.

Something to consider and think about for investors who may be looking for additional yield.
I like your idea. I am trying to find an example ETF portfolio to generate dividend income. I have read on a few sites VYM/VYMI or VIG/VYM.
Take a look at SCHD.100 stocks that are well screened.
SCHD - Yield is 3.58% A little under Vanguard but pretty much the same. Vanguard's fund is an index offering. Is SCHD an index fund?

Yes, many have said the indexing rules that SCHD uses is like a mix of the criteria used for VIG and VYM.

JustinR
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Re: Vanguard High Dividend Yield Index Fund

Post by JustinR » Tue May 26, 2020 9:39 am

KEotSK66 wrote:
Thu May 21, 2020 9:28 am
frequently when one invests for dividends/income they don't care about relative performance, they're concerned with positive cash flow
So they're basically kindergarten investors.

hoops777
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Re: Vanguard High Dividend Yield Index Fund

Post by hoops777 » Tue May 26, 2020 10:04 am

JustinR wrote:
Tue May 26, 2020 9:39 am
KEotSK66 wrote:
Thu May 21, 2020 9:28 am
frequently when one invests for dividends/income they don't care about relative performance, they're concerned with positive cash flow
So they're basically kindergarten investors.
I would disagree with that opinion.The vast majority of people who invest with a dividend focus care about cash flow and total return.
And people who invest the boglehead way are of course PHD investors with the incredible complexity required :D
K.I.S.S........so easy to say so difficult to do.

montanagirl
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Re: Vanguard High Dividend Yield Index Fund

Post by montanagirl » Tue May 26, 2020 10:22 am

scripter2002 wrote:
Fri Dec 20, 2019 10:45 pm
Curious why a fund such as Vdigx is a bad choice for IRA.
And VDIGX isn't new. 🤔

BGeste
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Re: Vanguard High Dividend Yield Index Fund

Post by BGeste » Tue May 26, 2020 7:55 pm

hoops777 wrote:
Tue May 26, 2020 10:04 am
JustinR wrote:
Tue May 26, 2020 9:39 am
KEotSK66 wrote:
Thu May 21, 2020 9:28 am
frequently when one invests for dividends/income they don't care about relative performance, they're concerned with positive cash flow
So they're basically kindergarten investors.
I would disagree with that opinion.The vast majority of people who invest with a dividend focus care about cash flow and total return.
And people who invest the boglehead way are of course PHD investors with the incredible complexity required :D
+ 1

Tommy
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Re: Vanguard High Dividend Yield Index Fund

Post by Tommy » Wed May 27, 2020 3:10 pm

If one interested in dividends and growth with lower volatility why not Wellington? Each time when I want to go to dividends investments and compare options I still cannot find better solution than Wellington or Wellesley. Excluding high yield bonds of course, but this is different type.

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Re: Vanguard High Dividend Yield Index Fund

Post by gd » Thu May 28, 2020 5:58 am

JustinR wrote:
Tue May 26, 2020 9:39 am
KEotSK66 wrote:
Thu May 21, 2020 9:28 am
frequently when one invests for dividends/income they don't care about relative performance, they're concerned with positive cash flow
So they're basically kindergarten investors.
Best be sure of your position before sarcasm. I manage a trust. Under some circumstances total taxes on CGs are about 30%, dividends 0%.

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FelixTheCat
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Re: Vanguard High Dividend Yield Index Fund

Post by FelixTheCat » Thu May 28, 2020 3:10 pm

Here's a Vanguard link https://advisors.vanguard.com/iwe/pdf/FASINVMP.pdf that show model portfolios. There is a income series.
Felix is a wonderful, wonderful cat.

JustinR
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Re: Vanguard High Dividend Yield Index Fund

Post by JustinR » Thu May 28, 2020 9:48 pm

gd wrote:
Thu May 28, 2020 5:58 am
JustinR wrote:
Tue May 26, 2020 9:39 am
KEotSK66 wrote:
Thu May 21, 2020 9:28 am
frequently when one invests for dividends/income they don't care about relative performance, they're concerned with positive cash flow
So they're basically kindergarten investors.
Best be sure of your position before sarcasm. I manage a trust. Under some circumstances total taxes on CGs are about 30%, dividends 0%.
That doesn't even make any sense. Dividends are taxed more than long term capital gains.

Are you talking about short term CGs?

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abuss368
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Re: Vanguard High Dividend Yield Index Fund

Post by abuss368 » Fri May 29, 2020 8:37 pm

This is a good fund for anyone who needs dividends.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

BGeste
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Re: Vanguard High Dividend Yield Index Fund

Post by BGeste » Fri May 29, 2020 8:53 pm

instead of the Schwab option go with VYM, VYMI, spyd, idv, and exg.

hoops777
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Re: Vanguard High Dividend Yield Index Fund

Post by hoops777 » Fri May 29, 2020 9:23 pm

Curious about the reasoning for not using SCHD
K.I.S.S........so easy to say so difficult to do.

jason2459
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Re: Vanguard High Dividend Yield Index Fund

Post by jason2459 » Fri May 29, 2020 9:34 pm

How about schd, djd, vymi

Or vym in replacement for schd. I personally like the more focused schd if going for a focused portfolio. But the schd/djd/vymi have good dividend and nav return.

I saw spyd mentioned and it doesn't do well when looking at performance vs schd/vym and djd. Of course that's just past performance And I'd personally replace vymi with reet if looking for a dividend portfolio with international reach.

tj
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Re: Vanguard High Dividend Yield Index Fund

Post by tj » Fri May 29, 2020 10:04 pm

Dividends are taxed more than long term capital gains.
Qualified dividends are taxed exactly the same as LTCG.

JustinR
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Re: Vanguard High Dividend Yield Index Fund

Post by JustinR » Fri May 29, 2020 10:40 pm

tj wrote:
Fri May 29, 2020 10:04 pm
Dividends are taxed more than long term capital gains.
Qualified dividends are taxed exactly the same as LTCG.
Dividends are taxed more because you're taxed on the entire dividend, whereas you recover principle on sold shares.

There's no situation where a dividend is taxed less than sold shares (other than STCG).

This is why dividends are actually a net loss of wealth. Most investors don't realize this and think dividends are free money when they're actually losing money.
Last edited by JustinR on Sat May 30, 2020 8:24 am, edited 2 times in total.

hoops777
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Re: Vanguard High Dividend Yield Index Fund

Post by hoops777 » Sat May 30, 2020 12:38 am

JustinR wrote:
Fri May 29, 2020 10:40 pm
tj wrote:
Fri May 29, 2020 10:04 pm
Dividends are taxed more than long term capital gains.
Qualified dividends are taxed exactly the same as LTCG.
Dividends are taxed more because you're taxed on the entire dividend, whereas you recover principle on sold shares.

There's no situation where a dividend is taxed less than sold shares (other than STCG).
Please explain how you recover principle on sold shares.
K.I.S.S........so easy to say so difficult to do.

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Re: Vanguard High Dividend Yield Index Fund

Post by TropikThunder » Sat May 30, 2020 12:45 am

hoops777 wrote:
Sat May 30, 2020 12:38 am
JustinR wrote:
Fri May 29, 2020 10:40 pm
tj wrote:
Fri May 29, 2020 10:04 pm
Dividends are taxed more than long term capital gains.
Qualified dividends are taxed exactly the same as LTCG.
Dividends are taxed more because you're taxed on the entire dividend, whereas you recover principle on sold shares.

There's no situation where a dividend is taxed less than sold shares (other than STCG).
Please explain how you recover principle on sold shares.
He means your basis. If you take $1,000 in dividends, all $1,000 is taxed as dividends (whatever the tax rate for the situation). If you take $1,000 by selling shares, only the capital appreciation is taxed as capital gains.

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Schlabba
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Re: Vanguard High Dividend Yield Index Fund

Post by Schlabba » Sat May 30, 2020 4:34 am

JustinR wrote:
Fri May 29, 2020 10:40 pm
tj wrote:
Fri May 29, 2020 10:04 pm
Dividends are taxed more than long term capital gains.
Qualified dividends are taxed exactly the same as LTCG.
Dividends are taxed more because you're taxed on the entire dividend, whereas you recover principle on sold shares.

There's no situation where a dividend is taxed less than sold shares (other than STCG).
Different countries different tax rules :happy

Where I live both dividends and capital gains are not taxed at all, we have a wealth tax instead.
Secretly a dividend investor. Feel free to ask why.

tj
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Re: Vanguard High Dividend Yield Index Fund

Post by tj » Sat May 30, 2020 10:11 am

JustinR wrote:
Fri May 29, 2020 10:40 pm
tj wrote:
Fri May 29, 2020 10:04 pm
Dividends are taxed more than long term capital gains.
Qualified dividends are taxed exactly the same as LTCG.
Dividends are taxed more because you're taxed on the entire dividend, whereas you recover principle on sold shares.

There's no situation where a dividend is taxed less than sold shares (other than STCG).

This is why dividends are actually a net loss of wealth. Most investors don't realize this and think dividends are free money when they're actually losing money.
Your basis isn't a gain. The gain is the amount you are taxed on. And the rate is exactly the same as for qualified dividends. And LTCG distributions don't return principle.

friar1610
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Re: Vanguard High Dividend Yield Index Fund

Post by friar1610 » Sat May 30, 2020 3:35 pm

Is there any reason not to have a dividend-focused ETF or MF in an IRA? (I do understand that dividends are not "free money" and that what's paid out in dividends reduces the value of the ETF or MF correspondingly.) But what does that all matter in an IRA? When you withdraw it you'll be taxed the same regardless of the source of the gains.
Friar1610

sycamore
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Re: Vanguard High Dividend Yield Index Fund

Post by sycamore » Sat May 30, 2020 3:53 pm

friar1610 wrote:
Sat May 30, 2020 3:35 pm
Is there any reason not to have a dividend-focused ETF or MF in an IRA? (I do understand that dividends are not "free money" and that what's paid out in dividends reduces the value of the ETF or MF correspondingly.) But what does that all matter in an IRA? When you withdraw it you'll be taxed the same regardless of the source of the gains.
One case that comes to mind is someone who thinks only "growth" companies are worth investing in. They want to own only companies that retain/reinvest the earnings. Someone who hates dividends on principle :)

But yeah in general for a tax-advantaged it doesn't matter if you hold a dividend-focused fund or a broad-market (with both dividend-paying and non-paying stocks).

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