Over the past 112 years, from 1900 to 2011, Canadian Equities have had a real return of 5.7% per year. The real return on Canadian Bonds was 2.2%. This is the real return which excludes inflation. In any event, this return is similar to the US. See page 40 of Credit Suisse Global Investment Returns Yearbook 2012.
The nominal rate of return for Canada was 8.9% per year for equities and 5.3% per year for bonds. The nominal rate of return is before inflation is factored in.
The real winner over that 112 period was Australia which had a real return of 7.2% per year in equities. Australian bonds had a real return of just 1.6% per year. Their nominal rate of return was 11.3% for Equities and 5.5% for bonds. For this information, see page 38 of the above report.
There is also an article about the study three British economists did when they examined the historical returns of stocks and bonds in 19 countries from 1900 through 2012. The economists were Elroy Dimson, Paul Marsh and Mike Staunton. The article is at the Investment Reporter
On my other blog I am today writing about Savaria Corporation (TSX-SIS, OTC- SISXF) ... continue...
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. Follow me on Twitter.
Monday, August 11, 2014
Wednesday, August 6, 2014
Something to Buy August 2014
There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
Of the consumer discretionary stocks, Canadian Tire is looking cheap. A number of Consumer Staple stocks seem to be still cheap. Examples would be Dorel Industries (TSX-DII.B A) and Metro Inc. (TSX-MRU).
On the Real Estate stock Granite Real Estate (TSX-GRT.UN) still looks cheap. However, the MPL Communications via their Report of Daily Buy and Sell Advisor recently said that H&R (TSX-HR.UN) is a buy.
A couple of the banks still seem to be cheap. These would be National Bank (TSX-NA), and TD Bank (TSX-TD). There are some in finance that deserve to be cheap, like AGF Management (TSX-AGF). For CI Financial (TSX-CIX) my list shows that on a historical average basis it is cheap. The stock of IGM Financial (TSX-IGM) and Power Corp (TSX-POW) are still showing as cheap.
There are a few cheap Industrial stocks like Finning International Inc. (TSX-TFF), PFB Corp. (TSX-PFB) and SNC-Lavalin (TSX-SNC).
There are not many companies cheap in the Tech sector except for small companies like Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
A number of energy stocks also seem cheap. Examples are Canadian Natural Resources (TSX-CNQ); Cenovus Energy Inc. (TSX-CVE) and Suncor Energy (TSX-SU).
The infrastructure type utility companies are not cheap. What utility companies that are cheap, seem to be cheap for a good reason. Examples are Algonquin Power & Utilities Corp (TSX-AQN) and Just Energy Group Inc. (TSX-JE). I have also noticed that MPL Communications via their Daily Buy and Sell Advisor has just recommended selling TransAlta (TSX TA) because it earnings and dividends are in decline.
Of the Telecom Stocks BCE (TSX-BCE) and Shaw Communications Inc. (TSX-SJR.B) seem on the cheap side. I think that Manitoba Telecom (TSX-MBT) is cheap for a good reason. Note that MPL Communications via their Daily Buy and Sell Advisor has just put out a Buy recommendation for Shaw Communications.
On my other blog I am today writing about DirectCash Payments Inc. (TSX-DCI, OTC-DCTFF)...continue...
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. Follow me on Twitter.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
Of the consumer discretionary stocks, Canadian Tire is looking cheap. A number of Consumer Staple stocks seem to be still cheap. Examples would be Dorel Industries (TSX-DII.B A) and Metro Inc. (TSX-MRU).
On the Real Estate stock Granite Real Estate (TSX-GRT.UN) still looks cheap. However, the MPL Communications via their Report of Daily Buy and Sell Advisor recently said that H&R (TSX-HR.UN) is a buy.
A couple of the banks still seem to be cheap. These would be National Bank (TSX-NA), and TD Bank (TSX-TD). There are some in finance that deserve to be cheap, like AGF Management (TSX-AGF). For CI Financial (TSX-CIX) my list shows that on a historical average basis it is cheap. The stock of IGM Financial (TSX-IGM) and Power Corp (TSX-POW) are still showing as cheap.
There are a few cheap Industrial stocks like Finning International Inc. (TSX-TFF), PFB Corp. (TSX-PFB) and SNC-Lavalin (TSX-SNC).
There are not many companies cheap in the Tech sector except for small companies like Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
A number of energy stocks also seem cheap. Examples are Canadian Natural Resources (TSX-CNQ); Cenovus Energy Inc. (TSX-CVE) and Suncor Energy (TSX-SU).
The infrastructure type utility companies are not cheap. What utility companies that are cheap, seem to be cheap for a good reason. Examples are Algonquin Power & Utilities Corp (TSX-AQN) and Just Energy Group Inc. (TSX-JE). I have also noticed that MPL Communications via their Daily Buy and Sell Advisor has just recommended selling TransAlta (TSX TA) because it earnings and dividends are in decline.
Of the Telecom Stocks BCE (TSX-BCE) and Shaw Communications Inc. (TSX-SJR.B) seem on the cheap side. I think that Manitoba Telecom (TSX-MBT) is cheap for a good reason. Note that MPL Communications via their Daily Buy and Sell Advisor has just put out a Buy recommendation for Shaw Communications.
On my other blog I am today writing about DirectCash Payments Inc. (TSX-DCI, OTC-DCTFF)...continue...
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. Follow me on Twitter.
Tuesday, August 5, 2014
Dividend Stocks August 2014
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield. See my spreadsheet at dividend growth stocks that I just updated for August 2014.
On this list,
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical average dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
However, you should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth Stocks . You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies .
On my other blog I am today writing about BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY) ...continue...
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. Follow me on Twitter.
On this list,
- I have 7 stocks with a dividend yield higher than the historical high dividend yield,
- I have 40 stocks with a dividend yield higher than the historical average dividend yield and
- 42 stocks with a dividend yield higher than the 5 year average dividend yield.
- I had 6 stocks with a dividend yield higher than the historical high dividend yield,
- I had 36 stocks with a dividend yield higher than the historical average dividend yield and
- 42 stocks with a dividend yield higher than the 5 year average dividend yield.
- I had 9 stocks with a dividend yield higher than the historical high dividend yield,
- I had 45 stocks with a dividend yield higher than the historical average dividend yield and
- 39 stocks with a dividend yield higher than the 5 year average dividend yield.
- Progressive Waste Solutions (TSX-BIN)
- TECSYS Inc (TSX-TCS)
- Alimentation Couche-Tard (TSX-ATD.B)
- CCL Industries (TSX-CCL.B)
- Home Capital Group (TSX-HCG)
- Methanex Corp. (TSX-MX)
- Suncor Energy (TSX-SU) and
- Wi-Lan (TSX-WIN)
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical average dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
However, you should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth Stocks . You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies .
On my other blog I am today writing about BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY) ...continue...
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. Follow me on Twitter.
Wednesday, July 30, 2014
Ballard and Blackberry
When I was at a party in 2006 a lady there had invested in Ballard (TSX-BLD) in the same time frame I did, but she had made a profit. I was very interested to know how she did that. What she had done was when the stock surged more than 4 times her purchase price she sold half her stock to lock in a profit.
That is if you invest $1 and the stock is worth now $4 and if you sell half you lock in a profit of $2 which is a 100% profit. Whatever you sell the remaining stock for, it will just add to your profit. Say the stock once worth $2 after your sale declines and you sell the remaining at $0.50. That means you have earned $1.50 for on $1 or 150%.
Another reason it was interesting was that I had invested in BlackBerry (TSX-BB) which was then called Research in Motion (TSX-RIM). It had taken off. I sold some in 2006 and 2007 to lock in a profit and then sold the rest in 2010. By 2010 the stock was on it a decline. The result was that I made a return of just over 480% on RIM. I earned far more on this stock that I had lost on Ballard.
It sometimes pays to talk about your losses. You never know what you will gain from that. No investment is a real loss if you learn from it. Never ever beat yourself up over an investment loss. It happens to everyone. Try to learn from it, but whatever you do you need to move on.
On my other blog I am today writing about Lassonde Industries Inc. (TSX-LAS.A, OTC-LSDAF) ... continue...
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. Follow me on Twitter.
That is if you invest $1 and the stock is worth now $4 and if you sell half you lock in a profit of $2 which is a 100% profit. Whatever you sell the remaining stock for, it will just add to your profit. Say the stock once worth $2 after your sale declines and you sell the remaining at $0.50. That means you have earned $1.50 for on $1 or 150%.
Another reason it was interesting was that I had invested in BlackBerry (TSX-BB) which was then called Research in Motion (TSX-RIM). It had taken off. I sold some in 2006 and 2007 to lock in a profit and then sold the rest in 2010. By 2010 the stock was on it a decline. The result was that I made a return of just over 480% on RIM. I earned far more on this stock that I had lost on Ballard.
It sometimes pays to talk about your losses. You never know what you will gain from that. No investment is a real loss if you learn from it. Never ever beat yourself up over an investment loss. It happens to everyone. Try to learn from it, but whatever you do you need to move on.
On my other blog I am today writing about Lassonde Industries Inc. (TSX-LAS.A, OTC-LSDAF) ... continue...
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. Follow me on Twitter.
Monday, July 28, 2014
There is Nothing Like a Negative Report
There is nothing like a negative report to generate comments. Unfortunately, most comments express anger about a negative report or a report that has some negative points about a stock. But you should read negative reports with a questioning mind. Look to see if the writer makes s any valid points.
A negative report might just bring up some aspect of the stock you have never considered before. If so, you have to figure out how important that negative aspect is to the long term profitability of a stock. If you are in a stock for the short term, that is a different thing altogether.
I think that to be a good investor you have to read not only favorable reports, but also negative reports on stocks you have invested in. This applies especially to your favorite stocks. There are always positive and negative aspects to any stock. Hopefully, the positive aspects of a stock outweigh the negative aspects of a stock.
On my other blog I am today writing about Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF) ... continue...
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. Follow me on Twitter.
A negative report might just bring up some aspect of the stock you have never considered before. If so, you have to figure out how important that negative aspect is to the long term profitability of a stock. If you are in a stock for the short term, that is a different thing altogether.
I think that to be a good investor you have to read not only favorable reports, but also negative reports on stocks you have invested in. This applies especially to your favorite stocks. There are always positive and negative aspects to any stock. Hopefully, the positive aspects of a stock outweigh the negative aspects of a stock.
On my other blog I am today writing about Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF) ... continue...
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. Follow me on Twitter.
Wednesday, July 23, 2014
Dividend Portfolio 2
Below are some other questions that should probably be asked of Dividend portfolio investing:
Question: So, a dividend portfolio can give a steady dividend income, but is there any downside in such a portfolio?
Answer: The dividend income may be steady, but the value of such a portfolio can fluctuate is my experience.
Question: So, how volatile is a dividend portfolio?
Answer: In the last two bear markets my portfolio value fell 30% each time. It did recover in between the bear markets.
Question: How did you handle this?
Answer: I basically stopped looking at my portfolio (except monthly) until the bear markets stopped. (I think that this is called an avoidance method. I am quite serious here. I felt that there was no point in getting upset about my portfolio value. I concentrated on what my dividend income was doing.)
Question: What about a recovery from a bear market?
Answer: My dividend portfolio recovered quite well. The recovery of a portfolio of dividend stocks recovers quicker than Mutual Funds or ETFs. (However, this is a whole other story of why this should be.)
On my other blog I am today writing Canam Group Inc. (TSX-CAM, OTC- CNMGA) ... continue...
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. Follow me on Twitter.
Question: So, a dividend portfolio can give a steady dividend income, but is there any downside in such a portfolio?
Answer: The dividend income may be steady, but the value of such a portfolio can fluctuate is my experience.
Question: So, how volatile is a dividend portfolio?
Answer: In the last two bear markets my portfolio value fell 30% each time. It did recover in between the bear markets.
Question: How did you handle this?
Answer: I basically stopped looking at my portfolio (except monthly) until the bear markets stopped. (I think that this is called an avoidance method. I am quite serious here. I felt that there was no point in getting upset about my portfolio value. I concentrated on what my dividend income was doing.)
Question: What about a recovery from a bear market?
Answer: My dividend portfolio recovered quite well. The recovery of a portfolio of dividend stocks recovers quicker than Mutual Funds or ETFs. (However, this is a whole other story of why this should be.)
On my other blog I am today writing Canam Group Inc. (TSX-CAM, OTC- CNMGA) ... continue...
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. Follow me on Twitter.
Monday, July 21, 2014
Dividend Portfolio
Below are my answers to questions I was recently asked:
Question: Do you have a fixed income component as well to 'cushion' equity crashes?
Answer: I have not had any fixed income components since I sold my last bond in 2007. (However since I live off my dividends and take money from my RRPS, RRIF, I have some 3.7% of my portfolio in cash and MMF.)
Question: How did you fare in the 2008-9 crash when more than half of companies paying dividends either reduced them or cut them completely? I know things recovered but how would you fare if the recovery had been very slow? I'm asking because I'm not sure whether to invest using total return and all cap equities or dividend stocks only in retirement as I don't have any pension except CCP & OAS.
Answer: I have been heavily into dividends since the early 1980's and I have never had a year of dividend income decline. Dividend increases slowdown in bear markets, but not right away. When there is a bear market, my overall dividend increases at a lower rate. This is because at such times, some companies stop dividend increases and some cut or cancel dividends. However, there are always some that continue to raise their dividends. For example, my dividends increased in 2008, 2009 and 2010 were 11%, 15% and 5.3%, respectively. In January of this year I wrote a blog entry on how I did in the last two bear markets of 2000 and 2008.
Question: It must be that you have a large capital cushion such that you could live off your capital for your life duration and don't need to live off of dividend income. That could not work for me or others who have no pension yet not enough savings to whether a black swan event.
Answer: I have had individual companies cut dividends, like TransAlta and companies discontinue dividends, like Bombardier and companies like Sun Life and the banks stop dividend increases. It is just the overall dividend income has not decreased. I have a variety of dividend stocks, some give low dividends, but increase them well like Saputo (but these dividend increases have slowed) and REITs which give good dividends but increase at the rate of inflation and others in between.
Question: There is risk of decreasing dividends and even companies suspending dividends given a black swan event which we in Canada have not seen since 1929. How do you plan to deal with that possible event?
Answer: I am of course betting that there will not be an event in Canada in the future that will destroy my dividend income to such an extent that I cannot live off my dividends.
Question: How many companies do you feel is optimal for a portfolio which will give good diversification yet easy to manage such a portfolio?
Answer: I have 32 stocks in my Trading Account which provides most of my income. However, of these I have little invested in a few stocks. For example I bought Barrick Gold Corp for fun because it crashed. I also like tech stocks and have small investments in TECSYS and Evertz Technologies because it is fun. So I really only have 29 stocks I am serious about getting dividends from.
Question: How many companies per sector do you believe is optimal?
Answer: I must admit I made most of my dividends in Utilities and Bank. However, I have branched out into other financials, industrials and REITs. I have focused on dividend growth stocks rather than different sector stocks. However, I have kept an eye on what sectors I have investments in to ensure I have some balance.
Question: Since many companies today are in fact international rather than domestic is it really necessary to add US dividend companies?
Answer: I have gone into Canadian companies doing business worldwide rather than into the US or European market. I tried American and European companies in the past, but did not make much money in them. There was also the complication of the currency exchange rate and getting financial information. I only have one foreign company left which is Barclays Bank.
I have probably broken all sorts of investment rules. I am too concentrated in Canadian Stocks and in Banks and Utilities. I am not evenly invested in the stock I hold with some investments around 10% of my portfolio and some under 1%.
On my other blog I am today writing about Artis REIT (TSX-AX.UN, OTC-ARESF) ... continue...
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. Follow me on Twitter.
Question: Do you have a fixed income component as well to 'cushion' equity crashes?
Answer: I have not had any fixed income components since I sold my last bond in 2007. (However since I live off my dividends and take money from my RRPS, RRIF, I have some 3.7% of my portfolio in cash and MMF.)
Question: How did you fare in the 2008-9 crash when more than half of companies paying dividends either reduced them or cut them completely? I know things recovered but how would you fare if the recovery had been very slow? I'm asking because I'm not sure whether to invest using total return and all cap equities or dividend stocks only in retirement as I don't have any pension except CCP & OAS.
Answer: I have been heavily into dividends since the early 1980's and I have never had a year of dividend income decline. Dividend increases slowdown in bear markets, but not right away. When there is a bear market, my overall dividend increases at a lower rate. This is because at such times, some companies stop dividend increases and some cut or cancel dividends. However, there are always some that continue to raise their dividends. For example, my dividends increased in 2008, 2009 and 2010 were 11%, 15% and 5.3%, respectively. In January of this year I wrote a blog entry on how I did in the last two bear markets of 2000 and 2008.
Question: It must be that you have a large capital cushion such that you could live off your capital for your life duration and don't need to live off of dividend income. That could not work for me or others who have no pension yet not enough savings to whether a black swan event.
Answer: I have had individual companies cut dividends, like TransAlta and companies discontinue dividends, like Bombardier and companies like Sun Life and the banks stop dividend increases. It is just the overall dividend income has not decreased. I have a variety of dividend stocks, some give low dividends, but increase them well like Saputo (but these dividend increases have slowed) and REITs which give good dividends but increase at the rate of inflation and others in between.
Question: There is risk of decreasing dividends and even companies suspending dividends given a black swan event which we in Canada have not seen since 1929. How do you plan to deal with that possible event?
Answer: I am of course betting that there will not be an event in Canada in the future that will destroy my dividend income to such an extent that I cannot live off my dividends.
Question: How many companies do you feel is optimal for a portfolio which will give good diversification yet easy to manage such a portfolio?
Answer: I have 32 stocks in my Trading Account which provides most of my income. However, of these I have little invested in a few stocks. For example I bought Barrick Gold Corp for fun because it crashed. I also like tech stocks and have small investments in TECSYS and Evertz Technologies because it is fun. So I really only have 29 stocks I am serious about getting dividends from.
Question: How many companies per sector do you believe is optimal?
Answer: I must admit I made most of my dividends in Utilities and Bank. However, I have branched out into other financials, industrials and REITs. I have focused on dividend growth stocks rather than different sector stocks. However, I have kept an eye on what sectors I have investments in to ensure I have some balance.
Question: Since many companies today are in fact international rather than domestic is it really necessary to add US dividend companies?
Answer: I have gone into Canadian companies doing business worldwide rather than into the US or European market. I tried American and European companies in the past, but did not make much money in them. There was also the complication of the currency exchange rate and getting financial information. I only have one foreign company left which is Barclays Bank.
I have probably broken all sorts of investment rules. I am too concentrated in Canadian Stocks and in Banks and Utilities. I am not evenly invested in the stock I hold with some investments around 10% of my portfolio and some under 1%.
On my other blog I am today writing about Artis REIT (TSX-AX.UN, OTC-ARESF) ... continue...
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. Follow me on Twitter.
Subscribe to:
Posts (Atom)