The American Journal of Medicine published a “review article” without references or apparent peer review of any kind last year. It was written by an older doctor (I assume, given his claim of investing in the stock market for 50 years) by the name of William C. Roberts. It was brought to my attention by none other than Bill Bernstein.
“This is hilarious. I'm sure someone must have pointed this out to you, but just in case . . .I don't have the energy to respond to this in the AJM, but maybe you do!”
It turns out he actually does have the energy based on a follow-up email:
“Against my better judgment, I contacted the Journal's editor and offered to write a followup article, tactfully pointing out to him that the piece contained no references, which I'm guessing is close to a first for his August publication.”
I hope the editor takes him up on it. But in the meantime, this article deserves a response right here on The White Coat Investor blog.
Thank You
The first thing I want to do is to thank Dr. Roberts (a cardiac pathologist at Baylor) for writing the article and the American Journal of Medicine for publishing it. Doctors certainly need more financial information, not less. While there are plenty of nits to pick in this article, at least there is something to nit-pick!
The Importance of Acquiring Financial Security for Physicians
The article was titled The Importance of Acquiring Financial Security for Physicians (The American Journal of Medicine (2020) 133:1403−1405). Dr. Robert's motivation for writing it was exemplary: He wants doctors to be so financially secure that they can always do the right thing for their patients. I wholeheartedly agree. He then gives 37 tips of financial advice. I thought it would be a good idea to go through them one by one.
# 1 Save Money
Hard to disagree with this one. However, some of the specific tips may be a little extreme such as “don't hire a babysitter”. I think that's penny-wise and pound-foolish since date night is your greatest asset protection move. Score 1 for Dr. Roberts.
# 2 Invest in the Stock Market
Also hard to disagree with this one, although those who prefer real estate or entrepreneurship may disagree with his statement that “the stock market is the best place to increase one's monetary worth over a long period”. Personally, I do all three. It's a judgment call, but I'm going to give him another point for this one.
# 3 Build an Emergency Fund
I think this is a good idea. However, he then recommends you invest your emergency fund into a stock index fund. Say what? Then he launches into a crazy argument about stock picking.
“A low-fee Standard and Poor’s Stock Index Fund might be considered. This fund provides ready diversity, but it also includes purchasing the bad stocks as well as the good ones. It is also probably better than buying individual stocks for one not really interested in spending the time necessary to become relatively savvy with stocks. A preferable alternative might be Warren Buffett’s Berkshire Hathaway, a collection of about 80 companies plus shares in a variety of companies not managed by Berkshire Hathaway. In contrast to the Standard & Poor’s collection of stocks, Buffett has few bad stocks!”
You can't make this stuff up, but it kind of makes it difficult to take seriously anything else he says in the article.
- First, index funds based on S&P indexes, in general, are relatively inferior to other index makers.
- Second, he likely meant an S&P 500 index fund, which is generally inferior to a total stock market index fund.
- Third, even if you're interested in spending time picking stocks, you're still likely to do better with an index fund.
- Fourth, even the man with the record for “beating the stock market” (aka Warren Buffett) tells you to use index funds.
- Fifth, Warren Buffett is not outperforming the market in any recent time period. Sure, he's beaten “the market” (as measured by the S&P 500) in 37 of the last 55 years. But over the last 15? From 2006 through 2020, Berkshire Hathaway has posted a 15 year annualized return of just 9.59% per year. The Vanguard Total Stock Market Index Fund (you know, the one that buys all those bad stocks) had an annualized return of 10.08% over that same 15 years. The 5 and 10-year numbers are even worse (11.92% versus 15.42% and 11.21% versus 13.78% respectively).
- Sixth, Warren Buffett certainly has been known to pick a bad stock from time to time. Dexter Shoes, Conoco-Phillips, and US Airways. He also regrets not buying Amazon and Google.
- Finally, emergency funds belong in something far safer than stocks. Stocks are for money you don't need in the next 5 years, not money you may need next week.
At any rate, while I'm mostly a fan of emergency funds for the non-financially independent, this one was a miss for Dr. Roberts. Besides, talking about investing in individual stocks just makes you look dumb. Warren Buffett tells you not to do it for a reason.
# 4 Learn Patience
Again, who can argue against patience? However, this statement is problematic:
“Most stock owners buy stocks when they are too high and sell them when they are too low. Doing the opposite is the way to make money.”
No, the way to make money is to buy the whole market every month using a low-cost, broadly diversified index fund portfolio and quit trying to time it.
While I like the advice to not panic, I don't like the market-timing advice, so this one is a miss.
# 5 Diversify
Again, hard to argue with the title. It's the advice below the title that can lead investors to make mistakes:
“Try to buy stocks in the [sector] that is down for the moment.”
Do yourself a favor. Just buy them all. Then you're really diversified. Another miss.
# 6 Favor Stocks That Pay Dividends
Total miss here. It's hard to reconcile his advice under # 3:
“A preferable alternative might be Warren Buffett's Berkshire Hathaway”
with his advice here:
“Favor stocks that pay dividends.”
This is mostly bad, but perhaps just mistaken, advice. There are lots of reasons to avoid a dividend focus when buying stocks.
He also says here that “one potentially loses money only when the stock is sold”. No, while that justification may help someone avoid selling low, it isn't actually true. When stocks go down in value, you actually did lose money. It might not matter to your personal life, but you still lost it.
# 7 Recognize the Beauty of Compound Interest
Yes, knowing how compound interest works is a good thing and most investors should learn.
# 8 Limits
It's a little hard to tell what he is recommending here. He may just be recommending you use limit orders instead of market orders. Fine, no harm done there, but there is certainly little harm in using a market order on a typical day when you're buying stocks the right way, through a highly liquid ETF, much less a traditional mutual fund. But he also seems to be again recommending individual stocks, so we're going to call this another miss.
# 9 Goals
Hard to argue with the 8 words here. Yes, I think goals are good and yes, you'll need to stick to them. But a few more words about reasonable or SMART goals probably would have been helpful. It's only like the most important part of the whole process. Like # 7, he didn't actually say anything wrong, so I'll give a point here.
# 10 Beware of Stock Tips
Again, like the title, don't like the advice under it.
“Have a good reason for purchasing or selling a particular stock.”
Look folks, just having a reason isn't good enough. You either need to somehow magically know it will outperform the market, or you need to just buy the market. Another miss for advocating stock picking.
# 11 Avoid Mutual Funds and Annuities
“The fees are too high,” he says. I dunno, FZROX has an expense ration of 0.00% and no other fees. I'm not sure how much lower they can be. You can assemble an entire portfolio without any holding costing you more than 10 basis points a year. Unfortunately, it's like he learned to invest 50 years ago and never updated his knowledge. Total miss here.
# 12 Never Buy or Sell All at Once
More bizarre stock picking advice here.
“Start buying slowly. If the price falls, buy more; if the price rises, do not feel obligated to chase it.”
How'd that work out for you with Enron or Worldcom or Bethlehem Steel? I think you can still get Sears stock for $0.23 a share! Another miss.
# 13 Have a List of Stocks to Watch
“When the price falls sufficiently, jump on it.”
What he means is when a stock is about to go up, you should buy it. Sounds a lot like Will Roger's advice:
“Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.”
It doesn't sound any smarter when you read it in the American Journal of Medicine. The fact that this article got past an editorial staff of any kind is pretty remarkable. Obviously a miss. You don't need a list of stocks to watch. You don't need to watch stocks at all.
# 14 Avoid Shorting Stocks
I'll give him this one, but I wish he hadn't added the caveat “unless you become a knowledgeable pro” becomes it seems to suggest that if you would just learn enough that shorting stocks somehow becomes smart.
# 15 Never Borrow Money to Buy Stocks
I'll give him this one too, although it's not terribly different from carrying a mortgage or student loans while investing in stocks.
# 16 Survey Your Stocks Daily
This may be the worst advice in the entire article. Imagine someone like me who thinks a good time is to disappear into the wilderness for a week or two without cell coverage. It's hard enough for docs to get away from their work, the last thing they need is to not be able to get away from their investments. The best part is how he recommended you diversify back in # 5. Then he says this:
“The correct number of stocks to own varies with one’s interest in keeping up with them.”
Guess what? If that's the case, the correct number for most docs is zero. You certainly don't need to be a stock picker to be a successful investor. In fact, it's likely to hurt your efforts.
# 17 Be More Conservative as You Get Older
Okay, that seems like reasonable advice.
# 18 Beware of Bonds. They Are for Old People.
Uhhhh…..So were we supposed to be more conservative or not? I'm going to give two solid misses for #s 17 & 18 for squandering such a great opportunity to discuss asset allocation.
# 19 Beware of Trying to Time the Market
Wait a minute, back in # 4, # 12, # 13, and # 16 you told me to time the market and now you're telling me not to. Which is it? I would have given you a point for this one except you recommended the old “dry powder” strategy, so another miss.
# 20 Invest for the Long Term
Great advice.
# 21 Learn About a Stock Before Buying It
Again, what seems like reasonable advice on the surface actually turns out to be bad advice because even if you learn all kinds of things about the stock, you should still buy them all. Another miss.
# 22 Look Favorably at Stocks Warren Buffett Owns
I'll bet you a dollar Dr. Roberts has made at least one trip to the Berkshire-Hathaway annual meeting in Omaha. But the strategy he advocates here is pretty silly:
“Consider [purchasing] as soon as you learn what companies or stocks [Buffett] has recently purchased.”
Look, if you want to own what Warren owns, buy Berkshire Hathaway. It's really quite easy. But as we showed under # 3, that might not be such a great idea. Better to do what Buffett told you to do—buy an index fund.
# 23 Listen to Business Channels
There is almost nothing worthwhile on “business channels” whether on TV, the radio, or anywhere else that is going to increase your investing return. He doubles down on it though:
“Learn if your instincts are good and, if so, go with them.”
I love what is left unsaid. What if your instincts are bad? No advice for you.
# 24 Buy Stocks in Companies You Believe In
Look folks, the stock doesn't know you own it, much less understand your religious devotion to it. Listen, I believe Southwest is a better company than United Airlines, but if you give me a low enough price on United, I'll take it over Southwest. He also gets into an interesting ESG advocacy position:
“Refrain from buying stocks in companies that produce products not good for your health, tobacco companies or fast-food chains, for example.”
So arms manufacturers, casinos, and oil and gas are all fine, but don't you buy any stock in McDonald's. Another miss.
# 25 Subscribe to WSJ and Barron's
WSJ publishes a lot of entertaining articles, but if you think you're going to be able to identify a good stock by reading newspapers and magazines, I think you misunderstand the advice their columnists like Jonathan Clements and Jason Zwieg actually give. He also says you can “deduct their subscription costs from your taxes”. Really? Did you miss the Tax Cuts and Jobs Act? Those deductions (which were subject to a 2% floor anyway) disappeared in 2017. I bet Dr. Roberts was never legally able to deduct his WSJ subscription given his likely career income. Another miss obviously.
# 26 Do Not Ignore Recent Trends and Try to Get Out Early
All kinds of interesting stock picking and market timing advice here. Again, impossible to reconcile with # 19.
# 27 Stay Out of Debt
While I generally agree with this (and give him a point for it), his explanation of amortization is somewhat bewildering:
“Try to obtain a mortgage loan that allows the paying of next month’s principle with the present month’s principle plus interest. Then, the next month’s interest is nullified.”
First, it's principal. Second, yes, the interest on the additional principal paid is “nullified”. But not just for a month. If you pay extra, you never pay interest on that money again.
# 28 Try Not to Divorce
It's a good tip. I agree. The pre-nup recommendation and the recommendation to marry someone frugal are also not bad.
# 29 Beware of Sales
What he really meant to say was don't buy stuff you don't need or even want just because it is on sale. I agree with that.
# 30 Do Not Confuse Price with Value
After that quick break to discuss debt, divorce, and sales, we're back to the stock picking advice. Contradictions, market-timing advice, and bizarre advice (don't buy stocks with a price under $5.00 a share) abounds. Miss.
# 31 Have a Monthly Budget
I like that one. I wish he had recommended a 20% savings rate for his physician readers instead of 10%, but overall I'll give him a win for this one. My favorite line in the entire paper was here though:
“Call your credit card company at year’s end for a summary of your year’s spending.”
Or you could, you know, go online and look at it.
# 32 Avoid Retiring Early
The FIRE folks are going to love this one. You would think advice like that would be followed by some sort of explanation. But no. It just goes right on into other advice like:
“Start saving early for retirement. Do not procrastinate. Wasting less time usually leads to wasting less money.”
I don't get it. Why start early and avoid wasting money if you don't want to retire early? You can start pretty darn late if you are willing to work until 70. A miss here for leaving out any sort of argument against early retirement.
# 33 Calculate Stock Profits Annually
I think he's saying track your return. I agree. I wish he'd also told you to compare it to a reasonable index fund and see if you're beating it long term. He then spends a paragraph explaining how percentages work in case you missed that part of your 5th grade education (yes, a gain of 40% does not make up for a loss of 40%).
# 34 Don't Be Fooled by the Splitting of a Stock
Long paragraph here explaining how stock splits work. I'll go one better. Don't bother even knowing if your stocks ever split because it doesn't matter if you just buy them all. Random information, but not inaccurate, so I'll give him a point.
# 35 Study the 1929 US Stock Market Crash
I agree that understanding financial history makes you a better investor, so I'm giving a point for this one.
# 36 Own Some Gold
He recommends 5-10% of your portfolio be put into gold coins in a bank safety deposit box. If you really want to, knock yourself out. I'll give him a point for not recommending anything higher than 10%. The key with “investing” in speculative assets like gold or bitcoin as some sort of a hedge is to limit the investment. The bulk of your portfolio needs to be in productive assets.
# 37 Stay Healthy and Live Long
I was going to give a point for this one, but he added a P.S. advocating for more individual stock picking. So a miss.
Final score: 15/37. Pretty disappointing. I appreciate seeing a financial article in a medical journal but wish this one had gotten some peer review. If you're a medical journal editor considering publication of something like this, Dr. Bernstein and I would be more than willing to do a little pro-bono peer review for you.
What did you think of the article? Did you like it? Did it do more harm than good? Comment below!
Great run through and response.
This is a perfect example of the well intentioned but uninformed and potentially dangerous information that physicians all across the country are passively absorbing! It reminds me of the “operating room” advice that I sometimes got as a trainee that I now realize was not so sound.
Earlier this week, I spoke at a Grand Rounds where a resident asked me if he should pick up a whole life insurance policy that a “financial advisor” had recommended him. I emphatically explained why this was not a good idea. An older faculty member then countered that he had bought a whole life policy which turned into a great investment for him. Unfortunately, he couldn’t see why, despite the product now finally being in the positive for him in his older age, was a terrible investment given the alternatives.
Excellent response. I suppose the TLDR would be ‘Okay Boomer’
I just looked this guy up. He’s got a Wikipedia page https://en.wikipedia.org/wiki/William_C._Roberts He was born in 1932! He’s even too old to be a boomer. The reasoning behind some of this advice now makes more sense. Certainly a survivorship bias included in there. Looks like he is very well published and I suspect wanted to do something nice for his fellow physicians. Called up one of his editor buddies and submitted this antiquated advice. Just like practicing medicine, it’s good to refine how you do things as new information comes to light.
Roberts is the exact age of my father (retired orthodontist), and my father espouses the same investing philosophy and rituals. It is a generational thing, and old habits and ideas that have done well for you in the past are hard to break.
Enjoyed the article review. Although I appreciate the effort by the author, you demonstrated the importance of proper financial education. I wish we had your blog 30 years ago when I started.
It wasn’t until 2008 that I learned to have an investment plan. Currently work is optional.
Thanks for all you do Jim.
What?!?!? I cannot believe this was published. Clearly there was no review process at all. Did the editors even read it? I cannot reconcile someone having read this article with the advice to “Call your credit card company at the end of the year”!!! Thanks for taking time to go through and refute. I really hope they allow a follow up article from Dr. Bernstein.
Interesting. You are being hard on Dr Roberts. It would be interesting if he published his actual financial information. We have no way to evaluate how well his stock picking has done. I assume he has done well to publish this article. I assume I am closer to his age than you. The ease of investing in index funds simply did not exist when I got started. As I studied investments I realized that investing like he is suggesting is very hard and time consuming. I transitioned to being primarily an index investor around 50. I decided to keep one individual stock when I transitioned and that has really juiced my returns for the few years (Apple). Do I regret this? No. Do I understand the risk? Yes. Again we really cannot be overly critical of Dr Roberts without knowing his asset allocation, asset location, returns, and net worth.
I agree with Hatton that perhaps we are being a tad too critical. Dr. Roberts reminds me of my father who is now 95 and refuses to become computer literate. My father calls the recorded line of his individual stocks every day the market is open. Stocks, rental houses, and annuities are his investments of choice. He gleans his information from newspapers and monthly investment magazines.
These examples are like someone who drinks and smokes, but can run a 5 minute mile and has good blood pressure, writing an article in a fitness magazine espousing the benefits of their methods. If you want to invest based on principles (and tax laws and fee structures) from 50 years ago, be my guest. It is irresponsible at best, and reckless at worst, to throw that advice around to a generation that will be investing and working in a very different environment. A lot of “boomers” and even those older complain about the younger generations have no perspective. That street goes both ways, and this sort of obtuse thinking and offering advice on a subject in which you have not bothered educating yourself in decades is selfish and lazy.
Agree with all of Jim’s points – they should not have published this piece, no matter how well the author has done over the years. But with due respect to the author, he’s at the older age of the spectrum if you Google him (no disrespect – my father’s in his 90’s, and I hope to be there one day as well) and this is fairly “old school” outdated financial advice and perspectives. Thanks to Jim for updating to modern era.
Agreed, nice to see something in terms of financial information in a medical journal but he forgot the most import starting point –
“If you depend on your income to live, you need disability insurance. If anyone else depends upon your income to live, you need term life insurance.”
– Dr. Jim Dahle.
We also all know that “Offense sells tickets. Defense wins championships.”
-Paul “Bear” Bryant
This is why financial “CME” (?CFE) is so important. Obviously Dr. Roberts has good intentions but this is not unlike the financial equivalent of recommending bloodletting to treat illness. I’m also surprised this was published without any apparent scrutiny. The “Green Journal” is usually quite good.
The road to hell…Thanks to you and Dr. Bernstein for taking the time to respond. I’ll be tweeting this momentarily but wanted to comment this was the most important post this month by WCI. I trust it will have wide impact. JFL
I didn’t get the pleasure of reading the original article, however, it’s really shocking how poor and at times contradictory the information is presented. One thing I’ve learned after reading FIRE blogs for years is how simple the process is to obtain financial independence.
I almost feel sorry for bloggers like WCI, MMM, etc. to figure out new and inventive ways to say the same damn thing over and over. Though if you read the WCI facebook (which I unsubscribed) it’s pretty clear no matter how many times you repeat the simplistic methods of the FIRE movement the discussion always devolves to stock picking and Tesla stock.
Unfortunately so true about WCI Facebook. It’s an entirely different world there. Nonstop ‘hot tips’, had to unsubscribe.
Tim & Roger – I agree it was pretty Wild West in the Facebook group there for a while, but moderators have cracked down on a lot of the speculative talk. It’s much more rational these days.
We’ve tried to adjust moderation policies to address the “hot tip” and speculatory posts there.
How unfortunate some of our best WCI minds have left the Facebook group. Fortunately, as Michelle pointed out, moderators have laid the smack down on such nonsense. What you and Tim describe is few and far between nowadays and even those that pop up end up with the dreaded message: “Why your facebook group post was closed.”
https://www.whitecoatinvestor.com/why-your-facebook-group-post-was-closed/
The Facebook group is turning into something WCI and be proud of / not embarrassed to have its name attached to. Jim has actually polled the group at one point and 2/3rds of the group wanted to keep things without the regulation. Despite that Jim did the right thing here. Must have been hard annoying such a huge portion of the group. I admire Jim a lot for having the gumption to make the decision fall on the side of financial literacy despite the numbers against it.
Feel free to come back….
I don’t think your recollection of the poll is accurate. Support for the change was far higher in my recollection, but there were some vocal dissidents.
Thanks for your comments, great post.
Your response was great and far from being too harsh. If anything you graded the paper on the curve.
This is another reminder of how out of touch some of these institutions in medicine are. Another example is the AMA.
I also don’t think one’s personal performance should be a barometer of good advice. He’s still practicing at 88 so that covers up a wealth of mistakes. This may have been the best advice available to him during the years when his investment strategy was developed, but there is more current appropriate advice out there now. I wouldn’t be hard on him for sharing what he did, but I think the criticism for sharing it like it’s a best practice is warranted.
You provided an interesting, and I feel, very accurate response to each of Dr. Robert’s 37 tips. A colleague of mine from Baylor knows him and confirms he is a respected senior doctor and been around a very long time. Regardless, the information might have been more accurately included in an op-ed piece instead of what appears to be a peer-reviewed article. The same outdated information can be found throughout the dental literature by similar, well-meaning authors. I teach financial principles to dental students and find the widespread dissemination of inaccurate or simply opinionated financial/business information disappointing and often counterproductive. Thanks for your dedication to presenting such information accurately and in easy to understand terms. All my dental students have your White Coat Investor’s Guide to Students!
Nice to see someone educating professionals about personal finance/investing. The literature from Malkiel, Swedroe, Bogle and Bernstein is more than enough to know all there is to know about long term investing. In one sentence its owning a globally diversified portfolio of low cost index funds and rebalanced yearly. Financial illiteracy is the norm as I have spoken to many docs over my career. DENTALTOWN as well is a good resource and BOGLEHEAD.ORG is probably the most inclusive
keep up the good work as too many billions are wasted to Wall St
Astonishing this got published in what had been a reputable journal. Since when is this even a topic for a medical journal?
Wtf? I agree Seems like the green journal should just stick to medicine. It is disturbing that this was approved by the editors of the journal and reflects their lack of financial knowledge but also disturbing that this may teach improper financial principles to other docs.
Jim, seems like you still have a lot of work to do! But we here in the community will also try and help 🙂
This blog has become depressing Jim. When can we start talking about moderately aggressive growth, DIY get your hands dirty investing, and using healthy leverage to multiply life’s bounties. It feels like we really only ever focus on the drudgery of life where we sell our souls for 20 years and maybe, just maybe, with a boring bland life we can survive our retirement for a few years. Can’t we dream of better? I respect your work and you’ve taught me so much, but can we please light a fire under our asses and break some molds?
Your requests about aggressive growth, “hands dirty investing” (whatever that is), and “healthy” leverage are basically anathema to what WCI would advocate. I would think I picked the wrong career if living with a better standard than most of America, and almost all of the world, constitutes the drudgery of life. The way to increase your net worth many times over is to provide a service or product than many people want, even above and beyond a doctor’s salary, and you won’t necessarily find that tip or inspiration on a blog post.
I certainly have blogged a lot over the years about growth, DIY investing, entrepreneurship, and leverage. Not sure exactly what you’re reacting to here.
I’m actually not surprised this made it passed reviewers. With how poor the financial literacy is within our profession, I’m just imagining a bunch of ignorant reviewers asking this advice was golden and stated doing these things after reviewing it.
Amazingly, even if they did that very thing many would likely be better off than hiring a bad, high expense advisor who churns your investments or sells you whole life insurance. I personally give him extra credit for leaving out these things.
Great article!
I find irony in the call to parrot Buffett’s purchases…after he’s put tens of millions into the shares and bid the price up dramatically.
Regarding dividend stocks though…
I am curious about possibly having a small dividend tilt to my portfolio. Given that the traditional wisdom has it that reinvested dividends within a company spur further growth, and that dividends paid out in a taxable brokerage are…taxable, many investors have been warned away from dividend-paying stocks outside of qualified accounts. I wonder if there isn’t a small premium which might be attributable to dividend stocks due to their lower efficiency in taxable accounts. I believe it was Ben Graham in “The Intelligent Investor” (or maybe in the commentary by Zweig) who doubted the effectiveness of retained earnings within a company, especially in light of highly inefficient uses of capital within that company like stock buy-backs in order to keep executives flush with options bonuses, diminishing returns on acquisitions and reinvestments, and general lack of frugality within the company due to the extra cash in the coffers. I hypothesize that, within a qualified account, dividend stocks might provide a small premium to the general market.
https://www.tandfonline.com/doi/abs/10.2469/faj.v72.n6.1?journalCode=ufaj20
If anyone has access to the CFA journal above, I’d love a summary of their methods suggesting high-dividend paying stocks outperform.
I wouldn’t avoid dividend stocks but I wouldn’t buy them individually. A dividend tilt is really a value tilt, and I’ve got one of those in my portfolio due to at least some data that suggests higher long term returns there than the overall market. So I’m not against a dividend tilt at all.
Are you familiar with the data about the value stock premium?
Absolutely, value and dividend stocks overlap quite a bit, and yes I’m a believer in the Fama/French small and value tilts (about 10% of each in the stock/RE portion of my portfolio).
I read a journal article abstract in the CFA journal, and it mentioned that the “growthier” companies who paid a dividend outperformed their more value-oriented dividend counterparts. I can’t see over what time period they evaluated the data, which would be very instructive, but it is a curious phenomenon.
When you say you wouldn’t “buy them (dividend stocks) individually,” do you mean you wouldn’t stock pick (a patently bad choice) or that you wouldn’t buy a dividend-based index fund like VHYAX or VYM? Granted Pearson’s r between the two funds over the last decade is 0.98 lol
I wouldn’t stock pick. If you want to have a dividend tilt using a fund or ETF I don’t think that’s crazy. I just don’t think you’re adding much beyond a value tilt. But if you’re convinced otherwise, knock yourself out.