What if everything you believed about dividend investing… was only half true?
For the past three weeks, I went deep down the rabbit hole.
I cross-checked verified data, analyzed real returns, compared ETFs vs hand-picked dividend stocks, and pulled numbers from official indexes, financial reports, and investor relations.
No opinions.
No hype.
Just cold, brutal data.
And what I found completely flipped my perspective on dividend investing.
If you’re chasing passive income, long-term wealth, or financial freedom, this might change how you invest forever.
The Great Divide: Stock Pickers vs ETF Investors
The dividend world is split into two loud camps:
Camp #1: The Stock Pickers
They hand-pick companies like Coca-Cola, Altria, Kinder Morgan, and build tight portfolios of 10–20 stocks.
They believe skill beats the market.
Camp #2: The ETF Investors
They buy dividend ETFs like SCHD, VYM, SPYD and let diversification do the heavy lifting.
They want simplicity, stability, and market returns.
Both sides are convinced they’re right.
So… who actually makes more money?
2024 Was Wild: Individual Stocks Dominated 🚀
Let’s start with the year that fooled almost everyone.
In 2024, individual dividend stocks absolutely crushed it.
Some jaw-dropping numbers:
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Kinder Morgan: +64.4%
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Energy utilities: +55.9%
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Kellanova: +49.8%
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Other top dividend names: 40%+ gains
When you average the top 8 dividend stocks, the total return was 41.1% in one year.
Sounds unbeatable, right?
Now compare that to dividend ETFs:
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SCHD: 11.66%
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SPYD: 15.34%
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VYM: 12.85%
Still solid… but nowhere near 41%.
A simple example:
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RM10,000 in a top stock → ~RM16,400
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RM10,000 in SCHD → ~RM11,166
That’s a massive gap.
So case closed?
Stock pickers win?
Not even close.
Zoom Out: The Long-Term Data Changes Everything 📉➡️📈
Here’s where the illusion breaks.
Over 10 years:
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SCHD: ~12.24% annual return
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VYM: ~8.96%
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S&P 500: ~13%
RM10,000 invested long term:
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SCHD → ~RM31,700
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VYM → ~RM23,500
Even more shocking?
Dividend Aristocrats (companies raising dividends for 25+ years) matched the S&P 500’s long-term returns with much lower volatility.
During market downturns, dividend aristocrats outperformed the S&P 500 nearly 67% of the time.
Less stress.
Less panic selling.
More consistency.
The Forgotten Truth: Dividends Save You in Bad Markets
Here’s a stat nobody talks about 👇
Over the last 95 years, dividends contributed:
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31% of total S&P 500 returns
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68% during the 2000s
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50%+ during the 1940s & 1970s
When markets crash or go sideways, dividends become your lifeline.
Growth slows.
Capital gains disappear.
Dividends keep paying.
The Silent Killer: Concentration Risk ⚠️
This is where individual stock investors get hurt.
Holding 10–20 stocks means:
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Each stock = 5–15% of your portfolio
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One dividend cut = massive damage
Real examples:
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GE cut dividends by 96%
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AT&T slashed payouts nearly 50%
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Major oil giants cut dividends during COVID
ETF investors?
They barely felt it.
Why?
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SCHD holds 100+ companies
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VYM holds 500+
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No single stock can destroy your income
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ETFs rebalance automatically
You don’t need to react.
The fund does it for you.
High Yield vs Dividend Growth (This Matters)
Two strategies:
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High yield: 5–10% now, little growth
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Dividend growth: 2–4% now, strong annual increases
Here’s the math that shocks people:
A 2.5% yield growing at 8% annually beats a flat 5% yield in about 9 years — and keeps pulling ahead forever.
Historically, dividend growth wins.
That’s why ETFs like SCHD outperform high-yield funds long term.
The Final Verdict (Read This Twice)
Yes — individual dividend stocks destroyed ETFs in 2024.
But 2024 was an anomaly, not a rule.
Over decades:
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Diversification wins
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Emotions lose
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Low-cost ETFs outperform most investors
For 80–90% of people, dividend ETFs are the smarter choice:
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Instant diversification
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Lower risk
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Automatic rebalancing
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Minimal fees
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Less stress, better sleep
For advanced investors?
A hybrid approach works:
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60–80% ETFs
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20–40% high-conviction stocks
But discipline is non-negotiable.
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Don’t chase last year’s winners.
Build wealth that survives decades.
Which camp are you in — stock picker or ETF investor?
Drop a comment, share this article, and start the conversation 👇
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#LongTermInvesting #MoneyMindset
