Monday, August 13, 2012

Picking A Dividend Payer In Sideways Market

One of the things I do every weekend is to watch the TD Waterhouse investment video. This is the link to look at their videos. They are short at just around 10 - 15 minutes. The interviewees often have something interesting to say.

This past week was entitled "Picking a Dividend Payer in Sideways Market:. This weeks interviewee was Cynthia Caskey who is Vice President, Portfolio Manager and Sales Manager for TD Waterhouse Private Investment Advice. She felt that we are currently in a sideways market and that the best choice for investing was in dividend paying stock. She particularly liked dividend stocks that were growing their dividends.

She also talked about quality of management being an important in picking stocks. One of the things she mentioned was a recent study that said that company boards that have women outperform ones that do not.

She, as most people interviewed here, gives a couple of stock picks. Hers were Canadian Utilities (TSX-CU) and PepsiCo Inc. (NYSE-PEP).

I must admit that this is my current strategy. That is I am investing in dividend paying stock in order to make money in the market. I have bought a few things for capital gain, but they were all short term investments. The world economy is in deep trouble and I do not see things changing anytime soon. No one is willing to make the tough decision until they have to.

She is not the only one to think that we are in a sideways market. A lot of commentators on the market are saying the same thing.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.


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  2. I'm doing the same think, been slowly working my way through my stock picks (inheritance from my Dad means I can do more the usual quarterly cheques for my DRIP stocks) I have about 15 stocks in mind and what I noticed is outside of BCE and Endbridge most have more or less gone sideways.

    There are no real capital gains to be made.
    When re-investing your dividends do automatically reinvest them or do you save them and put them into stocks that are cheaper (ie 52 week low)?

    Thanks Rob

    PS you got a lot of material here, will take me a while to get through everything.

    1. BTW only looking at Canadian stocks right at the moment

    2. I mainly only have Canadian stocks. I have in the past tried out mutual funds and ETFs, bonds, DRIPs and foreign stocks, but I have very little of any this now. One reason I stopped DRIPs was there was a lot of record keeping involved. However, I have not done DRIPs since 1989, so I do not know how this has changed.

      I am also living off my dividends, so I am not investing much. The main thing I have is a TFSA for investing at the moment.

  3. I'm getting rid of my DRIP stocks same reason, too much hassle, especially as I don't live in Canada anymore. I also remember my Dad getting rid of this US stocks for the same reason.

    Two questions, one do you ever sell stocks based on the fear of dividend cut? There are worries both on Manulife and Bell Aliant about the sustainability of the dividend.

    Secondly with the market going sideways do you sell when the price is up and re-buy when the price is down.

    In this case I thinking three stocks Power Corp, Manulife and Royal Bank. All had swings that made penny stocks look good and ended up at the same price at the end as at the beginning

    Of course the problem is you don't know if you have BCE up $8 and still trending up or a Bank of Nova Soctia up alot and then down about $3 (excluding dividends)after a year

    Again thanks for your thoughts

  4. I do not buy and sell much, I mainly just hold. The market can move awfully quickly sometimes.

    However I have bought non-dividend payers, especially tech stocks to get capital gain. I had RIM when it was an up and coming company and make quite a bit of money on it.

    I have Manulife and Power Financial. The insurances companies will not recover until interest rates go up and who knows when that will be.

  5. Thanks, I'm just working on a post regarding Manulife, there is a risk of a dividend cut but The market has already priced that in. What I'm looking at it is coming off support and could slowly over the next few months go back up to 15. If it does that than I'll sell it. If not I'll reinvest dividends