I think you are making part of my point. I would rather reallocate excess cash than giving management the opportunity to do so. Management is notoriously bad an reinvesting their own cash (there are always exceptions). There’s no downside to dividends in a tax deferred account.
And selling equities is easy to do in a bull market with healthy gains, not sure it will be as easy in a deep bear market - and if management does not feel comfortable making distributions because they need the cash, then they’ll keep it - otherwise I’ll take that cash dividend and buy whatever is cheapest within my portfolio (i.e., rebalance).
bull or bear market , the same dollars as the dividend from a portfolio of non div payers will leave you with the same cash flow and balance as the dividend payer as long as total returns are the same or greater .
here is a down market scenario
if you have 1000 shares of a 100 dollar stock, that is 100k invested
if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left which equals 81k for markets to act upon .
if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share or the same exact 90k you had .
on the other hand a portfolio of non div payers with 100k invested can drop the same 10% which is 90k ,,,sell off 9k to create the dividend and guess what , you got the same 81k left for markets to compound on .
if you put the 9k back in and decided not to take it you have the same 90k left
it just consists of less shares at a higher price since there is no mandatory roll back like with the div payer . the div payer ends up with more shares at a lower price but they equal the same dollars being acted on by the markets .
in both cases if markets double the investment your balances are identical .
people get all confused because they see the share balance increase , but they fail to realize it increases on a lower share price then had the dividend not been paid out .
ALL GROWTH COMES FROM SHARE APPRECIATION IN BOTH CASES . how you draw some out is irrelevant