this post was submitted on 28 Dec 2023
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Sorry, but value is overwhelmingly better than growth-weighted equities. It's not even close. We are talking about value doing 4.4% a year better on average for the past 98 years. Nobody should weight in growth for their retirement portfolio.
And value doesn't have anything to do with dividends. Plenty of growth stocks hand those out like candy. It's about fundamental value versus the market value of the stock. Value weighted funds are about catching value premiums from undervalued equities. Dimensional and Avantis make their bread and butter doing that.
Dividends are frankly, a total waste of time. They come from the value of the equity. It's not free money. The stock price is reduced to give it to you. Just sell what you need to meet your goals or go with retirement income funds which actually pay interest and still hold equities (and maybe add ultra short bond funds in if you want). That way you can control it your disbursements better.
Most TDFs are designed for those kinds of use cases for a reason.
Good info, thanks!