I’m sure Mr Zuckerberg will be happy to know that you are willing to invest additional funds in FB for no dividend income. . Any monetary gain will have to come from a sale of FB and I am sure the IRS and the STATE will be glad to accept 30% or 40% or more of the gains you had. In addition you had to make the correct decisions as to when to buy and then when to sell. And if you did all those things at the right time, you have to now find another investment to do as well or better. Where does the portfolio growth come from for your retirement. By leaning towards income I have to make less decisions (less chance of making mistakes) less trading (lower transaction fees and taxes to pay) leaves more capital working for me. As the income rises prices will tend to rise (But it isn’t necessary) and the portfolio will grow.
Glad your portfolio has done well for you but I still there is some a potential for misleading conclusions. For one, income is taxed at full rates and capital gains are not if held a year. For another capital gains if unrealized are just that - unrealized. You can put off any capital gains for years as your investment compounds. But the bigger objection to consider is that income payments are, in essence, just one form of capital allocation and should evaluated exclusively that way.
In the end, the ONLY thing that actually counts in investing is earnings (and close cousin free cash flow), and that is determined by how well a business does, not how the earnings are distributed. You have to MAKE earnings to PAY dividends, so you evaluate them exclusively in that order. Granted, often times paying a dividend is by far the best capital allocation imaginable and sticking with dividend payers is a mighty fine strategy for many, but in the end it is precisely earnings that determine how prosperous that dividend payment will be in the future. Thus, excluding companies just because they don’t pay a dividend is ultimately irrational.
Warren Buffett put it this way:
The businesses is wonderful if it gives you more and more money every year without putting up anything - or by putting up very little. And we have some businesses like that. A business is also wonderful if it takes money, but where the rate at which you reinvest the money is very satisfactory.
The problem with a ‘dividend or else’ approach is that you often exclude companies early in their growth cycles - and they will eventually turn into big dividend payers anyway as they mature. Here’s another way to put it - if you buy a stock for an IRA, do you care if it pays a dividend or not? Probably not - unless you think the company is wiser cause they pay a dividend. In the end though, you just want the selection that produces the highest total return…