The are currently 2 Monitored Dividend Strategies:
Monitored Dividend Captured Strategy – Cash Value (MDCS-CV)
Monitored Dividend Captured Strategy – Fund Price (MDCS-FP)
The Monitored Dividend Capture Strategies require daily monitoring which are a lot more complicated in terms of deployment compared to Scheduled Dividend Capture Strategies.
In addition, when using Monitored Dividend Capture Strategy, “self funding” of a regular investment plan will be more challenging as the dividends to be captured are less predictable than that of Scheduled Dividend Capture Strategy.
The above is the typical flow chart of a Monitored Dividend Capture Strategy
Let us take a look at the performances of the investment using MDCS-CV and MDCS-FP for the past 11 months. Then, you be your own judge if MDCS-CV or MDCS-FP are better. The examples below are based on $10,000 investment on a regular investment plan.
Dividend Captured using MDCS-CV for the last 11 months ($1499.12) projected at 15% Annual Dividend Payout Rate
Dividend captured using MDCS-FP for the last 11 months ($1498.13) projected at 15% Annual Dividend Payout Rate
Cash Value of MDCS-CV for the last 11 months ($16315.18 + $10,000 Year 2 Investment) Projected Cash Value in this case refers to the fund invested.
Cash Value of MDCS-FP for the last 11 months ($16130.98 + $10,000 Year 2 Investment) Projected Cash Value in this case refers to the fund invested.
Cash Value & Dividend of MDCS-FP for the last 11 months ($17814.30 + $10,000 Year 2 Investment) Projected Value in this case refers to the fund invested.
Cash Value & Dividend of MDCS-FP for the last 11 months ($17629.11 + $10,000 Year 2 Investment) Projected Value in this case refers to the fund invested.
Frequency of dividend payment of MDCS-CV: 8 out of 11 month
Frequency of dividend payment of MDCS-FP: 8 out of 11 month
Table of Comparisons for MDCS-CV vs MDCS-FP
For the past 11 months, based on an investment of $10,000, MDCS-CV has a better performance than MDCS-FP in areas of “Dividend Captured”, “Cash Value” and “Cash Value + Dividend”. As for the frequency of dividend distributions, both MDCS-CV and MDCS-FP are the same.
The actual performance of both the Monitored Dividend Capture Strategies, MDCS-CV and MDCS-FP have outperform the range of potential dividend payout rate (8% – 14%) at 14.9% (for 11 months) mentioned in the earlier article “Different (DCS) Dividend Capture Strategies” on 15 Aug 2023.
https://articles.dividendcapturestrategy.com/2023/08
Disclaimer:
Do note the above is for educational and sharing purposes only. They are not meant to be investment advice. For any investment or financial planning advice, please approach your financial planner or investment specialist.