My son has a portfolio of 20 stocks. Among his stocks he had both Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF) and TransAlta Corp (TSX-TA, NYSE-TAC). Reitmans cut their dividend around 75% in 2014 and TransAlta also cut their dividends around 86% between 2014 and 2016.
My son is in the process of building a portfolio of dividend growth stocks. What the above did to his portfolio was to make it pause in terms of dividend growth a couple of times in 2014 and 2016. Why I point this out is that making a mistake or having a stock cut its dividends is not a disaster.
The thing is that if you invest in stocks, no matter how well you do your homework, some are at least going to go through hard times. Some will cut their dividends. Then you have to decide if the stock is worthwhile holding on to.
For example, TransCanada Corp (TSX-TRP, NYSE-TRP) which is currently thought of as a great stock cut their dividends in 1999 by almost 38%. Bottom of the dividend were reached in 2000 and dividends started to increase again in 2001. It took almost 7 years for the dividends to get back to their old level.
On my other blog I wrote yesterday about Johnson and Johnson (NYSE-JNJ)... learn more. Tomorrow, I will write about IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more on Wednesday, November 23, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Memory Illusion by Dr. Julia Shaw learn more...
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.