Receiving dividends might feel good, but it's often not good for your investments. Unless you are counting on the dividend money to pay for your expenses, you are better off reinvesting dividends.
There are two main reasons for it:
Check the chart attached. Big difference, right?
It shows the SPY S&P 500 ETF, which pays dividends, and CSPX, also S&P 500, but automatically reinvests dividends.
Over a 15 year period,
SPY returned 483% while 
CSPX returned 638%.
At the end of 15 years, the performance is SIGNIFICANTLY different.
In addition to that, you might save in taxes by not receiving dividends.
This, of course, depends on where you live, but where I live, I pay 30% tax on dividends but 0% on capital gains. So for me, CSPX is even more advantageous :)
As someone said, compounding is the 8th wonder of the world!
There are two main reasons for it:
- Better compounding returns;
- Better tax efficiency;
Check the chart attached. Big difference, right?
It shows the SPY S&P 500 ETF, which pays dividends, and CSPX, also S&P 500, but automatically reinvests dividends.
Over a 15 year period,
SPY returned 483% while CSPX returned 638%.At the end of 15 years, the performance is SIGNIFICANTLY different.
In addition to that, you might save in taxes by not receiving dividends.
This, of course, depends on where you live, but where I live, I pay 30% tax on dividends but 0% on capital gains. So for me, CSPX is even more advantageous :)
As someone said, compounding is the 8th wonder of the world!
Hedge Fund Manager at Maverick Capital | Wealth Educator | 20+ yrs investing | Stocks, ETFs & Crypto alerts | Join Henrique Wealth Academy for trade alerts & indicators → skool.com/be-limitless/
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Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Hedge Fund Manager at Maverick Capital | Wealth Educator | 20+ yrs investing | Stocks, ETFs & Crypto alerts | Join Henrique Wealth Academy for trade alerts & indicators → skool.com/be-limitless/
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.