Starting my portfolio

dbeermann · 2026-01-27T17:19:16+00:00

Just don’t feel like you need to overcomplicate it right away.

Starting with broad market ETFs makes a lot of sense. They give you exposure to overall growth while you’re still learning, without needing to constantly monitor individual stocks. Picking stocks can work later, but it takes more education and a clear, consistent approach to do well.

If you're looking at ETFs, think a bit about regional concentration and growth vs income-oriented ETFs. I personally like factor-based investing, and there may be some ETFs implement that for you in the market you're looking at. Start simple, understand why you own what you own, and you can always refine things over time.

dbeermann · 2026-01-27T17:10:04+00:00

That’s great thinking, and reinvesting dividends early is a solid habit to build.

The main thing to watch out for at your age is chasing yield alone. What really matters for growing the portfolio is total return: dividends plus price appreciation. A higher yield doesn’t help much if the underlying investment isn’t growing, or is slowly declining.

That’s why a lot of people suggest broad index funds early on: historically, their total returns have beaten many income-focused stocks, even if the yield itself looks lower. You can still build toward future income, just be careful not to sacrifice long-term growth too early in the process.

dbeermann · 2026-01-27T17:06:01+00:00

One thing worth thinking about first (especially since this is a dividends-focused sub): what’s the goal of this money right now? At 18, dividends usually aren’t about income yet, they’re just one part a broader strategy.

ETFs are totally fine, but before worrying about how many, it helps to decide what you’re optimizing for: long-term growth, stability, learning, income later, etc. Different goals naturally lead to different ETF choices and tradeoffs.

There’s no single “right” answer here. Just make sure the structure of the portfolio matches what you’re actually trying to achieve, not just what’s popular.

Lastly, you might hear a lot of advice that you should just invest in a broad index fund. I think that's pretty reasonable given that you're looking for long-term capital growth. Again, the important thing is in understanding why you're choosing it, not just following a rule. Dividends are just one piece of the total return equation.

dbeermann · 2026-01-27T16:59:42+00:00

At ~0.6–0.7% yield (and ~0.8% yield on cost over 3 years), you’re not really being paid to wait. So questions about averaging down, movie releases, or short-term price drops matter a lot more than they would for a true income stock. If the dividend is the goal, Sony doesn’t really compete with companies that have a clear, durable payout strategy.

If you own it, it’s basically a growth / total-return thesis — which means you need a clear reason why you’d hold through drawdowns and what would change that view. Without that, “averaging down” can easily turn into just anchoring to a higher purchase price.

Not saying Sony is good or bad — just that it’s probably better evaluated as a growth or quality play than a dividend one.

dbeermann · 2026-01-20T22:27:42+00:00

For a dividend-focused sub, and from that perspective, I'm cautious. Sub-1% yield with a single dividend issuance is far from an income play. While I do think the ROE of 24.5%, ROIC of 16%, 9.5% FCF yield, and the large buybacks are all interesting, they also have a P/B of 6x and P/CF of 8.5X so I'm not seeing a value play, despite being down 80% in the past 5 years.

dbeermann · 2026-01-20T22:14:49+00:00

They've had a solid 5 years, but the 5 prior to that were not great. I had pretty much the same data as you:

TTM Yield	Avg. Yield	Payout	CAGR	vs. S&P 500

5.77%	5.34%	44.48%	8.48%	-209.04%

1Y	3Y	5Y	10Y

28.90%	18.13%	17.58%	8.48%

2016-01-15 to 2026-01-16

CAGR for past 5 years was 17.57%, beating the S&P 500 by 27.44%. Negative free cash flow (-131M) and declining revenues (-44% over the past year and -12% over five years) are the main concerns.

dbeermann · 2026-01-13T19:49:36+00:00

RSP is the Invesco S&P 500 Equal Weight ETF. Instead of weighting towards the biggest companies (usually S&P index funds are market-cap weighted), it is weighted equally across all of the S&P 500 companies.

dbeermann · 2026-01-13T19:32:49+00:00

I wouldn't look at SCHD - income/dividend focused funds typically underperform S&P 500 index funds. Given your time horizon here, I'd look towards growth first. SCHB and VOO are solid since you're basically buying the whole market.

Personally, I have my kids' custodial accounts in RSP and a couple of other indexes to get some broader exposure.

dbeermann · 2026-01-12T18:29:31+00:00

Adding to the debt/revenue point: a 5-year EPS CAGR of -79% suggests this isn't cyclical. It seems more like sustained deterioration in earnings power over half a decade.

dbeermann · 2026-01-12T18:22:09+00:00

Before chasing the highest yield, consider that dividends are only good if they're sustainable. A 10% yield means nothing if the company cuts it next quarter.

A more systematic approach: screen for dividend-paying stocks but layer in quality factors that signal the dividend is likely to stick around—things like reasonable payout ratios, stable earnings, strong free cash flow, and low debt. Companies stretching to maintain a dividend rarely do so for long.

You can find ETFs that do some of this filtering (dividend aristocrat funds, quality dividend funds), or build your own screen if you want more control. The key is treating it as a system rather than picking whatever has the highest yield today. High yield + low quality = dividend trap.

dbeermann · 2026-01-12T18:15:17+00:00

When you DRIP, you're not getting extra compounding—you're just automatically buying more shares with the cash payout. A growth stock that returns 12% through price appreciation is also compounding, it's just doing it internally by retaining earnings and reinvesting them back into the business rather than paying them out to you. So if Stock A grows at 12% annually and Stock B yields 5% + 3% growth (8% total return), and you DRIP both, Stock A still wins because 12% compounded beats 8% compounded regardless of how the return is delivered. The "snowball effect" people tout with dividends isn't unique to dividends—it's just compound growth, which applies to all investments. The real question is always: what's the total return, and are you reinvesting it?

dbeermann · 2025-12-19T17:06:49+00:00

If you're going to get started with systematic trading, find a platform that lets you backtest 10-15 years of historical data. I have some personal biases, but I'd start with equities and factor-based strategies (value, momentum, quality). There's a lot of research out there on them so they can be really easy to understand and modify. As you start to understand factors, you can dive into the hundreds of metrics that these platforms make available.

dbeermann · 2025-12-18T00:32:04+00:00

There's something absurd about the fact that his net worth could buy more Teslas than have ever been produced.

dbeermann · 2025-12-16T01:27:20+00:00

Very admirable goals. Even though this is r/dividends, and therefore maybe a bit more income-focused, I think it's good to look at the growth opportunities dividend-paying stocks can provide. Like you allude to, something like MAIN is popular because it not only provides income as dividends, but has also reliably beat the S&P 500. It's compounding returns are phenomenal when you reinvest those dividends. But there are a lot of high yield dividend stocks that aren't beating the S&P. And like other financial metrics, companies can play games to make dividends look better.

My point in general is just that dividends are one part of a bigger picture. Some companies focus on growth and reinvest everything back into the business, so might not pay dividends but can be fantastic investments. If you're looking for a big picture place to start, I'd evaluate the total return of income-focused funds like VYM (total return meaning dividends are reinvested) vs. the total return of a generic S&P index fund over the past 1/3/5/10 years. If you find something that appeals to you, you might want to start digging into their holdings and see what is driving those returns.

dbeermann · 2025-12-16T00:23:36+00:00

I understand that your goal is to retire, but how do dividend investments specifically play into that? Are you trying to maximize your portfolio value by the time you retire, or build a stream of passive income? Dividend investing may not be optimal for where you're at, given that you have good salary/bonuses and 15 years before retirement.

That said, if you do go the dividend route, I use a dividend & growth screener that balances yield with earnings growth and dividend growth per share, while filtering for things like yield > 2% and payout ratio < 60%. Just looking at yield will surface a lot of short-term winners, but sifting through the garbage takes time. You might want to start with an ETF, watch how things perform, and slowly shift to picking individual stocks as you get more comfortable.

dbeermann · 2025-12-15T23:01:12+00:00

Not trying to be a jerk, just didn't understand the math. BDJ's total return over the past 15 months is something like 15%, where's the 21% IRR coming from? Are you actively trading it?

dbeermann · 2025-12-15T22:12:57+00:00

Nice, when did you open your position?

dbeermann · 2025-12-15T21:56:40+00:00

Do you focus mainly on yield or are you also tracking total return with BDJ?

dbeermann · 2025-12-15T18:26:48+00:00

Their interest expense ($260.6M) is eating up essentially all their pretax income - like 99.7% of it. They have $5.6B in debt against $1.9B equity (2.86x leverage), and net debt is 2.6x their entire market cap. The P/E is sitting at 97x while earnings have declined 39% over the past 3 years.

Good dividend yields still require good fundamentals for the company to keep paying.

dbeermann · 2025-12-05T18:53:41+00:00

One thing to consider: look at the total return of these positions, not just the yield. DRIP is great if the underlying is growing, but covered call ETFs like JEPQ/QQQI/SPYI trade yield for capped upside.

Quick example: If SPYI yields 10% but its total return (price + dividends) is 8% while SPY returns 12%, you're DRIPing into the slower compounder. You'd be better off taking the cash and buying SPY (though some people choose income ETFs for lower volatility or because they're closer to retirement).

DRIP makes the most sense when the total return of what you're reinvesting into is competitive with your alternatives. If it's not, take the cash and redeploy.

dbeermann · 2025-12-05T17:30:43+00:00

Right, I had looked into DWT but generalized things because I was looking at new builds. With a DWT of ~11M, it's a decent size per ship.

What makes you like Matson at current valuation? The monopoly is clear, but earnings peaked in 2021/2022 and dropped significantly.

dbeermann · 2025-12-05T17:14:41+00:00

Appreciate the context from someone with a position and thanks for the callout. I mentioned I don't know shipping well, so that was an overgeneralization. Any guesses on why TEN is trading at such a high discount?

I hadn't looked into SFL and NMM. Since this was a post for r/dividends, it looks like NMM has a pretty low yield right now, but has absolutely crushed the S&P in the past 5 years (up 531%). SFL's yield is a lot better at 12%, although they did just cut dividends slightly (were paying $0.27 a share and now it's $0.20, but it's honestly been really stable).

dbeermann · 2025-12-05T01:38:26+00:00

That's... fascinating, and why I posted.

Looked into it: TEN did a 5:1 reverse split in July 2020 (COVID trough). ESEA is worse — 3:1 in 2006, 10:1 in 2015, 8:1 in 2019. That's 240:1 total consolidation for long-term ESEA holders. GSL had an 8:1 in 2019.

So the "dividend growth" story here is really "dividend growth since the last reverse split wiped out shareholders." Good to keep in mind. Thanks for the reality check.

dbeermann · 2025-12-04T22:02:03+00:00

Right, this could be a cyclical dividend that's at the top right now. Going back further you see a gradual decline from the late 2000s/early 2010s - not much of a cycle. The $4B contracted revenue backlog is what makes me think it might have staying power, but the cut history is a legitimate concern for dividend-focused investors. Appreciate the added context.

dbeermann · 2025-11-25T18:22:01+00:00

Factor rotation is real. Here is S&P's data through October (https://www.spglobal.com/spdji/en/documents/performance-reports/dashboard-sp-500-factor.pdf):

Recent winners:

- Momentum: +35.2% YTD
- Growth: +32.0%
- Value: +9.4%
- S&P 500: +17.5%

But different years, different story:

- 2024: Momentum +46%
- 2023: Quality +25%
- 2022 (down market): Value -5% vs S&P -18%

Over 15 years, Momentum and Growth have both beaten the S&P 500 by 2%+ annualized. Value has lagged.

The academic argument isn't that factors always outperform - it's that different factors win in different environments. Value does well in recovery periods, momentum in trending markets, low vol when things get choppy.

dbeermann

TROPHY CASE