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Energy has had a good run up in the last couple months with the vaccine but it is still at historical lows... is this an opportunity? And if not, why?
VDE - Vanguard Energy ETF is 52 which is even below it's 2009 subprime crash lows of 58 and the current PE ratio of 1.9 which is ridiculously low.
Now you are talking about my FAVORITE ETF. I started buying it back in March and bought even more of it over the next few months. I'm holding onto it for the long run. It may be tempting to take a nice profit now, but I'm convinced that it's got a lot farther to run over the next several years. Oh, and the ~6% dividend isn't half bad while I wait.
Back in late March and early April (after I had already bought a sizeable amount of VDE priced in the $30's and low $40's), I told some people on another board that VDE was selling at ridiculously low prices. The comments I got was that I must be crazy since "everyone" knew that the energy sector prices were going to go to near ZERO in the near future.
Since that time, my investment in VDE has increased in value by about 40% to around $52/share and I think it will go higher as the coronavirus situation becomes less of a factor in our lives in the coming year.
Now you are talking about my FAVORITE ETF. I started buying it back in March and bought even more of it over the next few months. I'm holding onto it for the long run. It may be tempting to take a nice profit now, but I'm convinced that it's got a lot farther to run over the next several years. Oh, and the ~6% dividend isn't half bad while I wait.
They can make the dividend 12% and at the end of the day it is still only about total return ....it just means they take 6% off your share price and hand you your own money back
They can make the dividend 12% and at the end of the day it is still only about total return ....it just means they take 6% off your share price and hand you your own money back
True, but that also means that if the dividend is X%, then even if the share price doesn't increase at all, you're still getting X% annual return on your invested money. And, if the share price happens to increase Y%, then you're getting a total of Y% plus X% as an annual return (or very close to that depending on exactly how you figure it).
True, but that also means that if the dividend is X%, then even if the share price doesn't increase at all, you're still getting X% annual return on your invested money. And, if the share price happens to increase Y%, then you're getting a total of Y% plus X% as an annual return (or very close to that depending on exactly how you figure it).
More like... the majority of the holdings are doing so bad that their dividends are exploding, which isn't sustainable and will lead them to cut or eliminate them, which will result in an accelerated crash.
True, but that also means that if the dividend is X%, then even if the share price doesn't increase at all, you're still getting X% annual return on your invested money. And, if the share price happens to increase Y%, then you're getting a total of Y% plus X% as an annual return (or very close to that depending on exactly how you figure it).
That is 100% not true at all..obviously you have No clue what dividends are or how they work
The dividend is a forced withdrawal of a piece of your share price....
It is no different than a mutual fund where you go to bed with 100k invested and they go ex div and now your invested amount is that much less ..if you reinvest you have the same 100k you had .
All appreciation must come the share price or all you are doing is moving existing money around too different pockets ...a six percent dividend and no appreciation is a zero return ..
Exchange computers automatically subtract what was was paid out off of your share price offsetting the payout.
Don’t ever think for one second a dividend is a return by itself. ....without equal appreciation in share price it is a wash.
They take 6% off your investment value and hand it to you
Last edited by mathjak107; 12-26-2020 at 12:10 PM..
That is 100% not true at all..obviously you have No clue what dividends are or how they work
The dividend is a forced withdrawal of a piece of your share price....
It is no different than a mutual fund where you go to bed with 100k invested and they go ex div and now your invested amount is that much less ..if you reinvest you have the same 100k you had .
All appreciation must come the share price or all you are doing is moving existing money around too different pockets ...a six percent dividend and no appreciation is a zero return ..
Exchange computers automatically subtract what was was paid out off of your share price offsetting the payout.
Don’t ever think for one second a dividend is a return by itself. ....without equal appreciation in share price it is a wash
I fully understand that. Perhaps I didn't word my comment exactly correctly. Perhaps I should have said that even if the share price remains constant and you get an X% dividend, then you will have an X% return.
I understand what you are saying about the share price drops when the dividend is paid. So, if the share price remains constant and you receive a dividend, then the stock must be appreciating at the rate of the dividend.
Example: If I own a share at $100/share and they pay me $6/share dividend, and the share still stays at $100/share (due to appreciation), then I've received a 6% dividend and still have my original share worth $100. This was what I meant even though I realize that the share price drops immediately when the dividend is paid.
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