In this interesting video I answer a commonly asked question which is if dividends have historically outpaced inflation, and I think you’ll find that the details behind the answer are quite fascinating. I’ll also tell you about a family reunion I recently attended and how a discussion I had about investing turned controversial.
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Join my Patreon ➜
Buy some of my fun dividend merch (10% donated to St Jude) ➜
Listen to my Videos as Podcasts on iTunes ➜
Listen to my Videos as Podcasts on SoundCloud ➜
Use my Seeking Alpha Affiliate Link ➜ (I’m sponsored by Seeking Alpha).
0:00 Intro
0:26 Dividend investing white paper – highlighting the importance of dividends
1:27 Data showing dividends have outpaced inflation, on average, over long periods
2:51 Dividend’s contribution to total returns vs inflation
4:45 Dividend investing white paper cont.
5:28 Learnings
6:44 Bonds vs Dividends vs Inflation
9:14 Dividends (et all) Inflation Hedges
9:45 Equities & Inflation
10:30 My example observation about companies & inflation relative to $
11:04 Blackrock example proving dividends outpace inflation, on avg
11:29 Conclusion
12:42 My family reunion investment discussion
16:00 Shoutouts
16:15 Please use my Seeking Alpha Affiliate Link (I’m sponsored)
16:27 20:18 Outro
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#Dividends #DividendGrowthInvesting #Inflation…(read more)
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Dividends vs Inflation: Who Wins?
When it comes to investing, there are many factors to consider, and one of the most important is the impact of inflation on your returns. Inflation can erode the purchasing power of your money over time, making it crucial to find investments that can keep up with or even outpace inflation. One popular investment strategy for combating inflation is to invest in dividend-paying stocks, but the question remains: who wins in the battle between dividends and inflation?
Dividends are a portion of a company’s profits that are distributed to shareholders, usually in the form of cash payments. Many investors are attracted to dividend-paying stocks because they provide a steady stream of income, which can be especially valuable in a low-interest-rate environment. Additionally, companies that pay dividends are often more stable and have a track record of consistent profitability, making them a reliable option for investors looking to generate income from their investments.
On the other hand, inflation is the general increase in prices of goods and services over time, leading to a decrease in the purchasing power of money. Inflation can eat away at the value of your investments, especially if they are not able to provide returns that outpace the rate of inflation.
So, who wins in the battle between dividends and inflation? The answer is not straightforward and largely depends on the specific investments and market conditions. Dividend-paying stocks can provide a hedge against inflation because companies that are able to consistently grow their profits are likely to increase their dividends over time. This means that as the cost of living rises, the income from dividends can also increase, helping to offset the impact of inflation.
However, it’s important to note that not all dividend-paying stocks are created equal, and some may not be able to keep up with inflation. Additionally, inflation can also impact the profitability of the companies themselves, potentially leading to lower dividend payments.
In conclusion, while dividend-paying stocks can be a valuable tool for investors seeking to combat inflation, it is not a foolproof strategy. It’s important for investors to diversify their portfolios and consider other inflation-hedging investments, such as real estate or inflation-protected securities. Ultimately, the battle between dividends and inflation is an ongoing challenge for investors, and the key is to stay informed and adapt your investment strategy to changing market conditions.
In this interesting video I answer a commonly asked question which is if dividends have historically outpaced inflation, and I think you’ll find that the details behind the answer are quite fascinating. I’ll also tell you about a family reunion I recently attended and how a discussion I had about investing turned controversial.
Chat with me on my free Dividend Discord chat server ➜ https://discord.gg/kkSr5FY
Follow me on X (Twitter) ➜ https://twitter.com/GenExDividend
Follow me on Instagram ➜ https://www.instagram.com/genexdividendinvestor/
Join my Patreon ➜ https://www.patreon.com/join/genexdividendinvestor
Buy some of my fun dividend merch (10% donated to St Jude) ➜ https://teespring.com/stores/genexdividendinvestor
Listen to my Videos as Podcasts on iTunes ➜ https://podcasts.apple.com/us/podcast/genexdividendinvestor-podcasts/id1476933524
Listen to my Videos as Podcasts on SoundCloud ➜ https://soundcloud.com/genexdividendinvestor
Use my Seeking Alpha Affiliate Link ➜ https://www.sahg6dtr.com/2352ZCK/R74QP/ (I’m sponsored by Seeking Alpha).
0:00 Intro
0:26 Dividend investing white paper – highlighting the importance of dividends
1:27 Data showing dividends have outpaced inflation, on average, over long periods
2:51 Dividend’s contribution to total returns vs inflation
4:45 Dividend investing white paper cont.
5:28 Learnings
6:44 Bonds vs Dividends vs Inflation
9:14 Dividends (et all) Inflation Hedges
9:45 Equities & Inflation
10:30 My example observation about companies & inflation relative to $
11:04 Blackrock example proving dividends outpace inflation, on avg
11:29 Conclusion
12:42 My family reunion investment discussion
16:00 Shoutouts
16:15 Please use my Seeking Alpha Affiliate Link (I’m sponsored)
16:27 20:18 Outro
Please LIKE, COMMENT and SUBSCRIBE to support this channel – it helps me immensely! Also, please SHARE this video with your friends 🙂 Thanks, I really appreciate it!
I know a handful of people who make significantly more money than I do, yet they somehow manage to live paycheck to paycheck and invest absolutely nothing. Those are the people I'm afraid will be working all the way until they reach 67 (and maybe even beyond!)
I think jobs in the future will end up leaning towards entertainment and services basically well will create more jobs focusing on pleasure
This is the thing I think people often forget when they are trying to plan out their retirement.
Everyone just says "I'll only need 60% or so of my income while I am retired"
Sure, that may be true… but only if you ignore the fact you lose buying power every year,
If I am able to live off say 60k a year when I retire, 30 years later I will 100% NOT be able to still live off that same 60k a year.
Places that hire humans to do jobs like waitressing and haircutting will never have robots because the whole point of going to those places is for the social experience
Right now I am investing 4k a month on dividends plus the money i am earning from day trading , I am hoping to the next year out at lease 6k a month , my portfolio is
XOM. DUK. CVX TGT 3M. SBUX PG. ABBV CL. JPM. KMB KO O KHC and I wanna add MCD AND MO thanks for your videos bro
Thank You for this vid.
My parents never invested because they did not know how. When I grew up I learned on my own and started teaching them and now they invest. It’s just an excuse to blame others. Once you are aware you learn and start doing it yourself
Most civilized countries have issue with declining population and if the trend continues automation may not take any jobs away as there won’t be enough people for those jobs anyway. I know where I live just about every fast food and small business has for hire sign. Many fast food places keep closing lobby and only have drive through because they cannot get enough people to work. I personally think that with AI and automation it’s not an issue of not enough jobs but rather less jobs with no skill or getting a pay check for doing very little. So the future workers will actually have to learn a skill to get a job
Thank for content
14:57 That is the densest bread I've ever seen
Lol. I read the disclaimer. Nice touch
"dividends are difficult to manipulate"
Carl Icahn has enetered the chat
Thanks for all over the great educational videos over the last few years.
My Dad, the bread winner, got laid off from his job on several occasions over a 20 year period while I was growing up. Every time he got laid off we up and moved to a new city in a different state. It happened in elementary school, middle school, and high school. It made me who I am today but much would have rather stayed in one place. This is my motivation to build my passive income. It would not matter if I lost my job as long as I have enough to cover my families expenses.
making cash always wins in inflationary times. Growth only loses big time. Why? Because you have to get rid of growth stocks to cover. Dividend stocks still pay and you can simply tighten your financial belt.
More and more companies are integrating cryptocurrency into their operations. Its actually interesting because it opens the door to investments. I would say its the new financial future. I recently started collaborating with Cannafarm Ltd, and it seems
More and more companies are integrating cryptocurrency into their operations. Its actually interesting because it opens the door to investments. I would say its the new financial future. I recently started collaborating with Cannafarm Ltd, and it seems
Thank you for your research. I find your videos are well done. RIght now Im keeping an eye on Cannafarm ltd
Im glad i got into cryptocurrency when I did because it’s been a turning point for me financially, been my best decision so far. Ive been making my personal research for a while now. For me it turns out that the best way to earn on crypto is cannafarm l
Are cryptocurrency and business incompatible? I think youre not keeping up with the news. While you thought it was impossible, some enthusiasts from Cannafarm Ltd integrated cryptocurrency into the production of medical cannabis. What do you say now?
I work with Cannafarm Ltd. In just 5 months, I made a profit of +90%.
Oh, I love you guys, the best market analysis! Seriously, why not mention Cannafarm Ltd?
Cryptocurrency is volatile. Diversifying your portfolio is a sensible strategy. For example, I have deposits on Binance where I engage in trading, also staking on Kraken, investing in companies like Cannafarm Ltd, and I also participate in liquidity pools
I have to thank you again for another great video! The last two have been packed with research data, for that I wish to see more in the future. The mix of data driven and – equally important – psychological advice is pure gold. Stay as humble, unbiased and relaxed as you are. You impact the world in a positive way. All the best to you and your family! Greetings from Germany!
Hitting the gym while listening to DividendExInvestor.
This may not be the best move but I have a mix of a total equity fund and SCHD instead of bonds. I don’t mind risk, just don’t want too much of it since I’m 62 and retiring soon.
The math is quite simple: If the dividend CAGR is higher than the price growth of the stock, that's when the overall yield of the portfolio increases. In the extreme case of 10% dividend growth CAGR and 0% price appreciation, after 20 years, the yield of the portfolio is 21.41%, assuming a starting yield of 3.50%. So, the cashflow from dividends can only outperform inflation if dividends grow at a faster rate than the stock price. If stock price grows at a higher rate, then the growth rate of the stock must exceed that of inflation, which is not that easy to do. Few stocks grow with more than 10-15% per year, which is closer to the true inflation. Bottom line: Pick stocks that go as much sideways as possible / have very moderate price appreciation and have a solid dividend CAGR.
UBI may not be the point, but remember that companies do not pay taxes. Companies only collect taxes and pass them on.
I remember 3.2% as a long term inflation rate.
Pulled up that from 1960 to 2022, the average inflation rate was 3.8% per year.
Have changed my investment strategy to focus on return on investment yields that are near 3.2% or higher and also have great five year compound growth rates.
I was thinking a lot about this during the lockdowns. And guess what I'm out of a job, at least for another six months or so. Good news is I have my dividends!
You can't downplay the power behind a strong high quality dividend stock or etf!
I'd say inflation is winning for a far when ….. they have pushed the inflation level today 400 years into the future…litterally in less than 10 years. Everyone is running around celebrating because their house price doubled or tripple. Well….
In the last 2 months 20k in O, Wpc, Adc, and Nnn for me.
For sure a video l will watch 2 times !
Im just investing in VTI, VEA, VWO, KOMP.
I really don't mind people blaming others for their misfortune because the instant that they do, the problem is known and no longer the fault of others if the problem persists. The first step towards any recovery is always acknowledging that you have a problem. And sometimes for some people blaming others is that first step.
Do you ever invest in growth stocks as well? Or 100% dividend
I have learned a great deal from you. Thank you for sharing your wisdom and creating a place for all of us to learn together.
Thanks for this video