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Monday's
Dividend Cafe

Daily Recap

Monday - October 6
DJIA
-63 (-0.14%)
S&P
+0.36%
Nasdaq
+0.71%
2 Year Treasury Yield
3.60% (+3 basis points)
10 Year Treasury Yield
4.16% (+5 basis points)
Top-performing Sector
Consumer Discretionary (+1.04%)
Bottom-performing Sector
Real Estate (-0.99%)
WTI Crude Oil
$61.75/barrel (+1.43%)

Podcast

Video

Dividend Cafe History

In September of 2008 the world’s financial markets were brought to their knees by a debt bubble, the likes of which we had never previously seen. The turmoil in financial markets was severe and Wall Street banks were falling by the wayside daily. In this time period, David Bahnsen was working as a Managing Director at Morgan Stanley, responsible for the well-being of his clients. As their anxiety of clients intensified, David began writing a periodic bulletin to them. One bulletin became another, and then another, and all of a sudden, a weekly bulletin was organically born! Well after markets pulled out of the abyss of 2008, the weekly edition continued, evolving into something far more positive than its September of 2008 origins. This commentary distributed by simple email with an ever-growing following morphed into the Dividend Cafe when David and his team launched their own practice in early 2015.

Today, Dividend Cafe is still attempting to do what it was doing in the fall of 2008 – offering truthful perspective that may not be easily found elsewhere. The topics will vary from our dividend growth philosophy, to bedrock investing principles, to the challenges of interventionist monetary policy, to anything else that inspires David in a given week. The underlying objective is the same now as it was when we began – to build trust by telling the truth, not what people want to hear.

History
SUBMIT YOUR QUESTIONS

Get Smart

Dividend Cafe Library
Browse and search for past editions.
Thoughts On Money

Abnormal Returns

Trevor Cummings
Alt Blend

Brush. Rinse? Repeat. – Part 4

Steve Tresnan

A Philosophy of Investing

TBG Founder David L. Bahnsen

About

Dividend Cafe provides market perspective rooted in first principles, not the fads of the day. Authored by our Managing Partner, David Bahnsen, it covers a wide array of topics, it doesn’t try to do what it cannot do, and it strives to offer needed perspective not readily available in most financial commentary.

The MONDAY Dividend Cafe covers all going on in the present tense in public policy, housing, energy, markets, the Fed, and more.

The DAILY RECAP is rather self-explanatory.

And ASK TBG gives you a chance for daily interaction with our people on any issue important to you.

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  • Dividend Cafe
Some Invigorating Takeaways from our Week with the Greatest Minds on Wall Street – October 3, 2025
October 3
Some Invigorating Takeaways from our Week with the Greatest Minds on Wall Street

Today, we provide a high-level overview of some of the major themes, takeaways, and debates from our week with Wall Street money managers....

More>
LAST WEEK'S
DIVIDEND CAFE

Ask TBG

Question:

“What are your thoughts on a dividend portfolio company where there are fundamental challenges that bring the stock price down, but the dividend continues to be paid?”
~ Pete M.

Answer:

If a well-run company with exquisite management and strategy runs into cyclical headwinds that last a long time, pressuring the stock price for a long time, but with no dividend cut, I would be elated. I love long slogs where the high yield is sustained (large income to withdrawers; huge reinvestment to accumulators). The problem with long slogs is where the dividend is threatened. We have to look to the fundamentals and capital structure to assess dividend sustainability, which can be a fallible process. But no, a declining stock price is not a bad thing for a company whose dividend will be grown and sustained; it is a blessing.

Question:

“What are your thoughts on a dividend portfolio company where there are fundamental challenges that bring the stock price down, but the dividend continues to be paid?”
~ Pete M.

Answer:

If a well-run company with exquisite management and strategy runs into cyclical headwinds that last a long time, pressuring the stock price for a long time, but with no dividend cut, I would be elated. I love long slogs where the high yield is sustained (large income to withdrawers; huge reinvestment to accumulators). The problem with long slogs is where the dividend is threatened. We have to look to the fundamentals and capital structure to assess dividend sustainability, which can be a fallible process. But no, a declining stock price is not a bad thing for a company whose dividend will be grown and sustained; it is a blessing.

~ David L. Bahnsen
, October 6, 2025

Question:

"With Treasury Yields already lower and after accounting for both taxes and inflation, does it still make sense to include them in portfolios, or is it better to avoid them altogether for higher-returning investments?"
~ Bob S.

Answer:

Assuming an asset allocation targeting a moderate level of risk rather than an all-equity portfolio, fixed income can still make a lot of sense in balancing volatility and income needs for most portfolios.  Also, as the Fed lowers interest rates, an allocation to the mid to longer end of the yield curve can not only lock in today’s otherwise higher interest rates, but there is some price appreciation potential with duration as well.  On the after-tax comment, Treasuries are more efficient than most money markets in avoiding state income tax (if you are subject to it) – but if you’re in a higher Federal bracket than an equivalent Municipal would give you a better taxable equivalent yield.  My answer will always depend on the goals and risk tolerance we are targeting, but I see plenty of value in today’s bond market if that is what you’re asking.  Asset-backed credit, longer-duration Municipals, Senior Secured bank loans in particular, as there is an appetite for some level of credit risk.

Question:

"With Treasury Yields already lower and after accounting for both taxes and inflation, does it still make sense to include them in portfolios, or is it better to avoid them altogether for higher-returning investments?"
~ Bob S.

Answer:

Assuming an asset allocation targeting a moderate level of risk rather than an all-equity portfolio, fixed income can still make a lot of sense in balancing volatility and income needs for most portfolios.  Also, as the Fed lowers interest rates, an allocation to the mid to longer end of the yield curve can not only lock in today’s otherwise higher interest rates, but there is some price appreciation potential with duration as well.  On the after-tax comment, Treasuries are more efficient than most money markets in avoiding state income tax (if you are subject to it) – but if you’re in a higher Federal bracket than an equivalent Municipal would give you a better taxable equivalent yield.  My answer will always depend on the goals and risk tolerance we are targeting, but I see plenty of value in today’s bond market if that is what you’re asking.  Asset-backed credit, longer-duration Municipals, Senior Secured bank loans in particular, as there is an appetite for some level of credit risk.
~ Brian T. Szytel
, October 2, 2025

Question:

"What do you think of the possible change from quarterly to twice-yearly financial reporting by public companies? Apparently, the SEC is prioritizing its review of this as requested by President Trump. Will the benefits to companies outweigh investor demand for timely information? Reducing both reporting costs and short-sighted juggling by management to hit their quarterly numbers seems like a worthwhile pursuit, allowing companies to better focus on longer-term goals, thereby maximizing shareholder value. Twice-yearly reporting is the practice in the UK and several EU countries, and they seem to operate just fine."
~ Jack S.

Answer:

To the extent it reduces some cost involved in offering updates every three months instead of six months, and that it may drive a more long-term focus on guidance and results, I can find some positive things in a potential change. That said, it isn’t something that we find immensely impactful for our Investment Committee to continue to provide everything we are doing at the same high level. I agree with your comment on how things function fine in other global markets and jurisdictions with a twice-yearly reporting cadence, although I am also not looking to follow a lead anywhere else for the sake of it either. This will be a process, and we will see where it goes, with pros and cons in either direction. There will still be companies that continue to report quarterly regardless of what the SEC comes up with, and there will still be plenty of intra-quarter commentary and data available as well.

Question:

"What do you think of the possible change from quarterly to twice-yearly financial reporting by public companies? Apparently, the SEC is prioritizing its review of this as requested by President Trump. Will the benefits to companies outweigh investor demand for timely information? Reducing both reporting costs and short-sighted juggling by management to hit their quarterly numbers seems like a worthwhile pursuit, allowing companies to better focus on longer-term goals, thereby maximizing shareholder value. Twice-yearly reporting is the practice in the UK and several EU countries, and they seem to operate just fine."
~ Jack S.

Answer:

To the extent it reduces some cost involved in offering updates every three months instead of six months, and that it may drive a more long-term focus on guidance and results, I can find some positive things in a potential change. That said, it isn’t something that we find immensely impactful for our Investment Committee to continue to provide everything we are doing at the same high level. I agree with your comment on how things function fine in other global markets and jurisdictions with a twice-yearly reporting cadence, although I am also not looking to follow a lead anywhere else for the sake of it either. This will be a process, and we will see where it goes, with pros and cons in either direction. There will still be companies that continue to report quarterly regardless of what the SEC comes up with, and there will still be plenty of intra-quarter commentary and data available as well.
~ Brian T. Szytel
, October 1, 2025

Question:

"Question on the index subject. If one owns this or that index, who (holding company or investment manager) votes for the shares? Is it the law that requires the entity to publish how they voted, or is it accepted as private? I guess the same can be said for a money management firm; do the clients have a right to know how their shares are being voted?"
~ Scott S.

Answer:

The fund company that manages the index that you own would be responsible for proxy voting. As the investor, you own shares in the index, but the actual shares of common stock with voting rights are owned by the investment manager. They vote on their index investors’ behalf, and most do publish how they vote (although they are not required to). Aside from how one feels about the potential for certain social agendas being advanced (ESG/DEI, etc.), proxy voting from very large index providers like BlackRock has been neglected by most index investors for too long. We have selected our own independent proxy voting firm that we believe represents our client’s interest, not to advance any certain social agenda, but to ask companies not to advance one that is damaging to investors. I can't speak for other investment managers, but we take a proactive approach and actually engage in conversation and correspondence with investor relations departments surrounding questionable decisions. It’s not something I have seen commonplace amongst peers, and frankly, regardless of whatever competing interest could arise with that ever-changing, I would take it over complacency any day.

Question:

"Question on the index subject. If one owns this or that index, who (holding company or investment manager) votes for the shares? Is it the law that requires the entity to publish how they voted, or is it accepted as private? I guess the same can be said for a money management firm; do the clients have a right to know how their shares are being voted?"
~ Scott S.

Answer:

The fund company that manages the index that you own would be responsible for proxy voting. As the investor, you own shares in the index, but the actual shares of common stock with voting rights are owned by the investment manager. They vote on their index investors’ behalf, and most do publish how they vote (although they are not required to). Aside from how one feels about the potential for certain social agendas being advanced (ESG/DEI, etc.), proxy voting from very large index providers like BlackRock has been neglected by most index investors for too long. We have selected our own independent proxy voting firm that we believe represents our client’s interest, not to advance any certain social agenda, but to ask companies not to advance one that is damaging to investors. I can't speak for other investment managers, but we take a proactive approach and actually engage in conversation and correspondence with investor relations departments surrounding questionable decisions. It’s not something I have seen commonplace amongst peers, and frankly, regardless of whatever competing interest could arise with that ever-changing, I would take it over complacency any day.
~ Brian T. Szytel
, September 30, 2025

Looking For Something Specific?

Monday's
Dividend Cafe

Daily Recap

Monday - October 6
DJIA
-63 (-0.14%)
S&P
+0.36%
Nasdaq
+0.71%
2 Year Treasury Yield
3.60% (+3 basis points)
10 Year Treasury Yield
4.16% (+5 basis points)
Top-performing Sector
Consumer Discretionary (+1.04%)
Bottom-performing Sector
Real Estate (-0.99%)
WTI Crude Oil
$61.75/barrel (+1.43%)

Podcast

Video

Dividend Cafe History

In September of 2008 the world’s financial markets were brought to their knees by a debt bubble, the likes of which we had never previously seen. The turmoil in financial markets was severe and Wall Street banks were falling by the wayside daily. In this time period, David Bahnsen was working as a Managing Director at Morgan Stanley, responsible for the well-being of his clients. As their anxiety of clients intensified, David began writing a periodic bulletin to them. One bulletin became another, and then another, and all of a sudden, a weekly bulletin was organically born! Well after markets pulled out of the abyss of 2008, the weekly edition continued, evolving into something far more positive than its September of 2008 origins. This commentary distributed by simple email with an ever-growing following morphed into the Dividend Cafe when David and his team launched their own practice in early 2015.

Today, Dividend Cafe is still attempting to do what it was doing in the fall of 2008 – offering truthful perspective that may not be easily found elsewhere. The topics will vary from our dividend growth philosophy, to bedrock investing principles, to the challenges of interventionist monetary policy, to anything else that inspires David in a given week. The underlying objective is the same now as it was when we began – to build trust by telling the truth, not what people want to hear.

History
SUBMIT YOUR QUESTIONS

Get Smart

Dividend Cafe Library
Browse and search for past editions.
Thoughts On Money

Abnormal Returns

Trevor Cummings
Alt Blend

Brush. Rinse? Repeat. – Part 4

Steve Tresnan

Write Off the Sunset: Planning Around the OBBBA

TBG Director Matthew Gregory

About

Dividend Cafe provides market perspective rooted in first principles, not the fads of the day. Authored by our Managing Partner, David Bahnsen, it covers a wide array of topics, it doesn’t try to do what it cannot do, and it strives to offer needed perspective not readily available in most financial commentary.

The MONDAY Dividend Cafe covers all going on in the present tense in public policy, housing, energy, markets, the Fed, and more.

The DAILY RECAP is rather self-explanatory.

And ASK TBG gives you a chance for daily interaction with our people on any issue important to you.

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