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- | The Connolly Report (since 1981) is no longer printed. It's a blog. Four or so pages a month with scores of ideas, links, yield and dividend data (going back decades) about dividend growth investing. Summaries of printed reports over the last decade are here [[report summaries]] | + | The Connolly Report (since 1981) is no longer printed. It's a blog for subscribers inside this site. The blog is four or so pages a month with scores of ideas, links, yield and dividend data (going back decades) about dividend growth investing. Summaries of printed reports over the last decade |
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+ | **zero point eight percent** (0.8%) was the return on equity funds (omitting Shopify) run by professionals in 2020. The TSX was double that at 1.6% in 2020. Oh my! Eighty eight percent of professional wealth mangers lagged the index (88%). This is why you must learn to invest in a few fine individual companies. The dividends on stocks followed inside this site rose 8% last year. This rising income made the companies more valuable: prices were up by 6.1%. | ||
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+ | [[About Us]] | ||
{{why_dg_oct_2016.pdf|}} Dividend Growth Investing | {{why_dg_oct_2016.pdf|}} Dividend Growth Investing | ||
- | * How can it be? How can a dividend increase affect the price of a stock? Especially if it's only a cent or two. It's unbelievably simple: an investment that produces more income becomes more valuable. Metro' | + | * How can it be? How can a dividend increase affect the price of a stock? Especially if it's only a cent or two. It's unbelievably simple: an investment that produces more income becomes more valuable. Metro' |
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+ | January 2023- **Ask Your Adviser** - A Rob Carrick’s column in early January 2023 had the headline “Five things to talk with your investment adviser about after the sad returns of 2022”. I’ve been thinking about what Rob said. Is a one year period enough to judge returns? Certainly not. Although total return was mentioned, Rob is mainly talking price returns. Most investors do. Over time, however, return on equities will track the sum of yield plus dividend growth. In the last decade, the CAGR (compound annual growth rate) of the 28 stocks I follow has been 8.79%. This is what really matters. ♦ My questions to ask your adviser, because of this, are quite different. First of all, I would not, and do not have an advisor. Advisors don’t have the answers. They are paid to peddle product and have no skin in your game. Most are not fiduciaries. An advisor should tell you that return has two parts: the investment return and the speculative return. The investment return, yield plus growth) is fairly stable, predictive, in fact. The speculative return fluctuates with human emotion. It is the speculative return that is falling. ♣ We could ask the adviser why they did not call in 2021 when the market was very high? Actually, I do not invest in the market. The market is a giant distraction for the business of investing. In the last major bear market, starting in 1964, the Dow was 874: in 1981;_— the Dow was 875. I do not buy index funds. | ||
+ | ♦ Did the advisor inform you inflation was about to increase and suggest you cut back on bonds (fixed income) and move more into equity with its growing income. A growing income makes a company more valuable and drives up its price. Actually, returns from equities, over time, make stocks safer. Safer than bonds, in fact. ♦ My retirement __income__ doubles every decade, on average: This means my capital will double also. ♠ In my view, advisor’s biggest error is not apprehending yield growth. As a result, an advisor does not know how to protect a portfolio. They are infected by modern portfolio theory. It’s just a theory and it’s wrong. Return, for instance, is not really related to risk. Return is more in the price you pay. Return, is the long run, tracks the sum of your initial yield and dividend growth. Price gains are driven by this increasing cash flow. Never buy a stock without knowing its ten year record of year-over-year earnings and dividends. The Connolly Report 2022 summary of dividend growth, year-by-year, | ||
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{{divup_priceup_77_87.pdf|}} ← Evidence that as the dividend rises, the price will too (Aug 2020). | {{divup_priceup_77_87.pdf|}} ← Evidence that as the dividend rises, the price will too (Aug 2020). | ||
* Dividend growth investors focus on the income their assets produce. Over the years, in aggregate, our dividends grow. From January 2008, the 24 Connolly Report dividend growth stocks grew 8.6% a year. The 2008 yield was 3.2%, so our return was 11.8%. Very few income funds grow their distributions. Dividend growth investors do not have to depend upon the size of the pot to fund our retirement. And here's the real bounty: our pot keeps growing as retirement progresses driven by dividend increases. A company that provides more income is more valuable: so, it's price rises too. It's not only true, but common sense. You can still join our group. | * Dividend growth investors focus on the income their assets produce. Over the years, in aggregate, our dividends grow. From January 2008, the 24 Connolly Report dividend growth stocks grew 8.6% a year. The 2008 yield was 3.2%, so our return was 11.8%. Very few income funds grow their distributions. Dividend growth investors do not have to depend upon the size of the pot to fund our retirement. And here's the real bounty: our pot keeps growing as retirement progresses driven by dividend increases. A company that provides more income is more valuable: so, it's price rises too. It's not only true, but common sense. You can still join our group. | ||
- | * The December 2019 blog inside this site - At the top of the December blog page is the annual summary spreadsheet | + | ♦ Here’s proof that the dividend growth strategy works. (As you read this, ask yourself if this is believable.) A decade ago, in 2012, BCE’s yield was 5.8%. As I key this in mid-September 2022, BCE’s yield is 5.8%. No big deal, eh. Ah.h.h but it is! In 2012 BCE’s dividend was $2.17 a share. Now (2022) |
- | * **The wealth management** industry has no skin in their game. And it really is a game for them (with your money). And in most cases, 'the middle people' | + | {{ : |
- | * **Risk Profile Questionnaire** (new Aug 2020) - When you open an account, ' | + | |
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+ | [[advisers err]] some examples of bad advice → **September 2022** | ||
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+ | * Do not consult a wealth manager. Wealth managers are a class of middle-person unknown our forefathers. Their only source of wealth is other people’s money. They have no skin in your game. Invest directly in businesses yourself. | ||
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+ | * How many stocks? (Dec 2020) John Maynard Keynes said “A careful selection of a few investments . . .” . In contrast, VEQT, the big Vanguard ETF, has 12,532 stocks. Which would you rather hold, a few quality companies or thousands of mediocre stocks? Do thousands of stocks make things safer? Most of the companies in the Connolly Report list doubled their income in the last decade. Does your retirement income double every ten years? It’s the cash flow that counts. | ||
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+ | * May 10 2022 - Price disruptions, | ||
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+ | * **Portfolio Selection** is my main March 2021 topic . . . starting from scratch. Which will be the first purchase right now for her new $75,500 TFSA. How does one decide. After 40 years of experience, it's well worth the $50 folks to get access. Also, in March, the revised Graham formula valuation sheet. Which of 30 dividend growth stocks are expensive using Ben Graham' | ||
+ | * Why would you allow/trust a third party (advisor, so-called wealth manager), who has no interest in your welfare/no skin in your plan, to come between (sell) you and your company? Learn how to do it yourself. | ||
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+ | * Nov 2021 An **index fund **is a product created by ‘the street people’. It is flawed. Fatally flawed, actually. You can’t win with an index fund. It’s an average. Certainly an index contains good stocks but mostly the holdings are sub-par. But this is not the fatal flaw. Valuation is. The average long-term return of the market is some 9%. Folks are lead to believe that they can obtain the return regardless of when they invest. This is not true. Valuation matters: when you invest is critical. As I write this in late November 2021, the market (index) at 21,700, is way overvalued. Returns from here will be negative. | ||
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+ | * Wealth Simple’s site writes “Diversify your investments means you can minimize risk and maximize rewards.” That’s not true. If you own bonds, the equity portion of your portfolio must do double duty to achieve normal returns. | ||
+ | * Feb 2022 - “If you are planning to retire in ten to 15 years, we think you should consider buying stocks that have long histories of dividend increases. While investors tend to look at the current yield (indicated dividend divided by share price) of a stocks, we believe yield on cost (the indicated dividend divided by the per share purchase price) may be a more accurate measure of the long term value of a dividend.” Standard and Poor’s Outlook Sept 8. | ||
+ | * May 1 2021 - Why do ' | ||
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+ | * In 1990 I spent $2,450 for 200 shares of a bank stock. I registered it in our son's name. In 1998 the stock split 2:1. They mailed him another 200 share certificate. In 2004, the stock split again 2:1. This time they mailed another stock certificate for 400 shares. He has 800 shares now. You can multiply 800 by the current price of the stock to find the total value. For me though, what is interesting and profitable in retirement is the dividend cash flow. With the dividend now up to $3.60 a share, these 800 shares pay $2,880 a year. That's more than I paid for the stock. My I love dividend growth investing. Inside this site there' | ||
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+ | **January 2021 blog** inside this site (five pages): 20 year, year-by-year, | ||
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+ | * **Target date funds** bungle* up your retirement finances. How? Just as your equities become safer, before retirement via the build up of intrinsic value, target date funds automatically sell your stocks and buy more bonds. Just say no to target date funds. "As an investors time horizon lengthens", | ||
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+ | //Salary for Life// by Henry Mah published Jan 2022. Henry answers questions about dividend income investing. I have just finished reading this book//. It’s excellent. If you wish to learn about dividend growth investing, Henry' | ||
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+ | Henry Mah’s previous book: | ||
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+ | Think of a leading company’s common stock (never preferred) as a perpetual bond with a rising coupon/ yield. The more it rises, the safer your holding becomes. Eventually (after a decade or so), you’ll beat the market with yield alone and your capital will rise at much the same rate. Proof/data is inside dividendgrowth.ca | ||
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+ | * The December 2020 blog is inside this site. The 2020 data summary is there at the top of the December blog page: 28 companies showing year-by-year dividends for a decade across the page. And, on the left side is the average 2010 price, on the right side, the late 2020 price. This allows us to show CAGR for dividends over the ten years and CAGR for price for the same ten years. This data exposes the secret of dividend growth investing. It is there in plain sight with an 80% correlation: | ||
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+ | * I put numbers to my statements so you can verify their veracity. An example: return is dividend yield plus its growth, plus or minus a wee bit for change in p/e | ||
+ | Actually, I use cyclically adjusted p/e (cape). CAPE is much more accurate valuation measure as it’s ten years of earnings, averaged; not the volatile and often manipulated quarterly data used by the industry. | ||
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+ | * **The wealth management** industry has no skin in their game. And it really is a game for them (with your money). And in most cases, 'the middle people' | ||
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+ | * Sept 2020 - Does the ETF the predator is trying to sell you provide an increasing income? Ask. Insist on seeing the last ten years of distributions for the ETF. Why this question? It's the increasing income that drives things*. Growing income is what you want during retirement. The more your income grows, the less of your savings you'll have to withdraw. Ten years ago our largest portfolio provided $26,367 a year in dividends: now it's over $40,000. * price in particular. | ||
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+ | - ETFs - Nov 2021 - Remember/ | ||
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Advisors pay no price for being wrong. Your interests and the person trying to sell you the ETF are not aligned. Don't let advisors ' | Advisors pay no price for being wrong. Your interests and the person trying to sell you the ETF are not aligned. Don't let advisors ' | ||
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- | I would suggest that you do not want or need an advisor (certainly not a robo advisor) to set up a portfolio for you. Advisors, knowing little about investing, will put you into ETFs (a lot of mediocre securities providing little income). People who flog ETFs aren't social workers: most have no fiduciary duty to put your interests first. To build wealth, you must learn to set up a portfolio yourself. It is easy. There are close to a thousand ETFs. There are only a few score of good dividend growing companies. I use TULF to select a Telecom stock (with recurring income); a Utility that has decades of consecutive dividend increase (your retirement income); a Lower yield stable, food retail stock and a Financial (any big bank). Rob Carrick wrote about TULF in November of 2016: | + | I would suggest that you do not want or need an advisor (certainly not a robo advisor) to set up a portfolio for you. Advisors, knowing little about investing, will put you into ETFs (a lot of mediocre securities providing little income). People who flog ETFs aren't social workers: most have no fiduciary duty to put your interests first. To build wealth, you must learn to set up a portfolio yourself. It is easy. There are close to a thousand ETFs. There are only a few score of good dividend growing companies. I use the acronym |
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+ | * **portfolio protection** - It's not the bonds that protect, it’s the growing income. May 2022 - Don’t believe it. The proof is inside dividendgrowth.ca There is a list of a dozen different way to prove this. I’ve been working on this for over forty years. | ||
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* Learn to invest directly in companies yourself, not through middlemen (the so called wealth managers) whose income is from other people' | * Learn to invest directly in companies yourself, not through middlemen (the so called wealth managers) whose income is from other people' | ||
- | * 25% more - July 24 2020 - How you can increase the cash flow from your retirement capital by 25%? Connolly Report June 2020 blog. SWR - You can raise you sustainable withdrawal rate from the 4% promoted by Wm Bengen to 5%. I have in hand a five page paper about this topic by Jan Blakeley Holman at an investment firm in the States. She's correct. | + | * 25% more - July 24 2020 - How you can increase the cash flow from your retirement capital by 25%? Connolly Report June 2020 blog. SWR - You can raise you sustainable withdrawal rate from the 4% promoted by Wm Bengen to 5%. I have in hand a five page paper on this topic by Jan Blakeley Holman at an investment firm in the States. She's correct. Actually, you can raise your safe withdrawal rate to 7% a year with dividend growth according to Peter Lynch. I link the ‘Worth’ column in our January 2021 blob inside this site and comment on it and the criticism of Lynch’s column. |
♦ Feb 5 2020 * **Wealth Management** - When you hold * individual stocks in a discount brokerage account, there are no on-going annual charges. The banks and other financial intermediaries do not make money on your money. For the financial institutions, | ♦ Feb 5 2020 * **Wealth Management** - When you hold * individual stocks in a discount brokerage account, there are no on-going annual charges. The banks and other financial intermediaries do not make money on your money. For the financial institutions, | ||
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* **Retirement Planning** - "If you are planning to retire in 10 to 15 years, we think you should consider buying stocks that have long histories of dividend increases. While investors tend to look at the current yield (the indicated dividend divided by the share price) of a stock, we believe yield of cost)the indicated dividend dividend by the share purchase price) may be a more accurate measure of the long term value of a dividend." | * **Retirement Planning** - "If you are planning to retire in 10 to 15 years, we think you should consider buying stocks that have long histories of dividend increases. While investors tend to look at the current yield (the indicated dividend divided by the share price) of a stock, we believe yield of cost)the indicated dividend dividend by the share purchase price) may be a more accurate measure of the long term value of a dividend." | ||
- | | + | Retirement income up from 25¢ a share to $3.60 on one of the companies I bought in 1990. Two hundred shares were purchased for $3.64 each. Two 2:1 splits since then mean we now have 800 shares paying $3.60 a year. Details going back the 30 years are inside for subscribers (Oct 2020 blog page). And notice, we are getting 100 percent of our money back each year now ($3.64 price vs $3.60 dividend). |
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+ | * “If bonds are supposedly safe”, a reader asked Rob Carrick for his August 24 2021 column, “ why are my bond ETFs losing money?” Rob’s answer was fine, here’s mine. People ‘think’ bonds are safe. Bonds are not safe. Bonds are a risk asset just like stocks. I do not buy bonds, never have, never will. My income from quality common stocks grows, year after year. Good stocks become safer as their cash flow grows. Bonds don’t. | ||
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* After a decade or so, quality dividend growth stocks provide __yields__ which outpace the TSX and that's without factoring in appreciation in the stock price. Learn about this inside. The entry fee is $50. Alternatively, | * After a decade or so, quality dividend growth stocks provide __yields__ which outpace the TSX and that's without factoring in appreciation in the stock price. Learn about this inside. The entry fee is $50. Alternatively, | ||
- | EXAMPLE: **August 2019 Connolly Report Blog summary**: 2019 dividend growth update ♣ Berkshire' | ||
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Inside dividendgrowth.ca you will learn: | Inside dividendgrowth.ca you will learn: | ||
* that as the dividend grows, so will the price of your quality rising dividend company. We constantly compare dividend growth and price growth. The correlation, | * that as the dividend grows, so will the price of your quality rising dividend company. We constantly compare dividend growth and price growth. The correlation, | ||
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* Discover that ETFs allow advisors, who know little about investing, to play with the hard-earned money of savers using the faulty concepts of modern portfolio theory: over–diversification, | * Discover that ETFs allow advisors, who know little about investing, to play with the hard-earned money of savers using the faulty concepts of modern portfolio theory: over–diversification, | ||
* Inside you will learn how to scrap just about the entire methodology of modern portfolio theory and return to the timeless principles of investing. Take your sacred savings out of the hands of middlemen who have no skin in your game. | * Inside you will learn how to scrap just about the entire methodology of modern portfolio theory and return to the timeless principles of investing. Take your sacred savings out of the hands of middlemen who have no skin in your game. | ||
- | * Oct 1st 2019 - a short essay on the inferior performance of professionals . . . you'd never believe why most pros can't beat the index. It's why I do not buy ETFs. | + | * Oct 1st 2019 - a short essay on the inferior performance of professionals . . . |
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* how to select the few quality companies you need to build wealth. | * how to select the few quality companies you need to build wealth. | ||
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**WARNING about ETFs**: | **WARNING about ETFs**: | ||
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- | Martin Mittelstaedt' | + | * |
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Most investors do not know, let alone believe, that as the dividend rises the price of the stock will also rise. Think. If a company is throwing off more cash each year (dividends), | Most investors do not know, let alone believe, that as the dividend rises the price of the stock will also rise. Think. If a company is throwing off more cash each year (dividends), | ||
* ETFs allow so-called ' | * ETFs allow so-called ' | ||
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Linked just below is a rather good item (May 23 2011) about reasons to buy and hold dividend growth stocks: | Linked just below is a rather good item (May 23 2011) about reasons to buy and hold dividend growth stocks: | ||
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- | * [[Fourth Quarter 2017]] Rob Carrick on dividend growth boosting a stocks' | ||
- | * [[First Quarter 2016]] Connolly Report since 1981...thirty five years | ||
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- | * [[Fourth Quarter 2015]] Why dividend growth investors do better. | ||
- | * [[First Quarter 2015]] - " | ||
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- | * [[Fourth Quarter 2014]] - You must construct an individual dividend growth portfolio | + | |
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- | * [[Third Quarter 2014]] Link to a retirement investing column in The Economist | + | |
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- | * [[First Quarter 2014]] - the essence of dividend growth investing | + | |
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- | * [[Third Quarter 2013]] | + | |
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- | * [[Second Quarter 2013]] - PBS Frontline - The Retirement Gamble - Dump your funds! | + | |
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- | * [[First Quarter 2013]] - dividends provide most of the return | + | |
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- | * [[Fourth Quarter 2012]] - a growing income, up 9.6% in 2012 | + | |
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- | * [[First Quarter 2012]] - //Probable Outcomes// | + | |
- | * [[Thoughts from 2011, '12 and ' | + | |
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- | * [[Third Quarter 2011]] - observe comment titles below | + | |
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- | * [[DGDPG2013]] - An example of how dividend growth drives price growth... | + | |
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- | * [[Falling Market]] - some thoughts in June 2012 | + | |
* Living from dividends in retirement [[WSJ_May10]] | * Living from dividends in retirement [[WSJ_May10]] | ||
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- | * **Yield on Cost**: If you bought 1000 shares of Toromont in 2005, your yield on the cost then would now be 2.9%. No big deal, eh! However, if you purchased 1000 shares of Toromont __ten__ years ago for $8,130 your yield on cost would now be 7.4%. That's not bad. Now, if you had bought the 1000 shares of Toromont back in 1990 for $750 your would have received close to $4000 in dividends over the 20 years, be earning 80% on your original investment and had 536% of your original investment paid back with the dividends. Twenty years is a long time, but WOW look what your $750 would be earning now. In addition, you'd have a capital gain of...well work it out. What is the price of a share of TIH now. Multiply by 1000. And you bought 1,000 shares for $750. Maybe you had better investigate dividend growth investing. Data courtesy of MacDougall, MacDougall and MacTier | + | == Subscribers |
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- | * under No-No financial products [[Target date]] funds/ | + | |
- | * under Investment Topics [[Yield + Dividend Growth]] | + | |
- | * [[fund-based_income_plans]]; | + | |
- | * [[Which stock?]] ; [[value priced]] ; | + | |
- | * [[When to buy]]? under Potpourri | + | |
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- | <box 50% red|**What I do, in a sentence: | + | |
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- | When they are [[value priced]], I buy common* shares of companies with a good record of dividend growth and hold them for the rising income. In 2008 our dividend income rose in spite of the turmoil by 9.9%. Did your income rise by 10% last year. Our income will be up again in 2010 too. Our retirement plan is working. It's not the value of the capital that's so important, it's the income it generates...tax advantaged income...secure income. Except for Telus in 2002, the last time there was a dividend reduction in a stock in my list, other than Manulife in early August 2009, was during the last century (TRP Dec '99). Before that: NA and RYL in 1992. Dividend reductions from good dividend growers are rare events. | + | |
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- | **Since [[About Us|1981]]**...every two months for 30 years . . . | + | |
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- | * I've never bought [[preferred shares]], or [[bonds]] or mutual funds. | + | |
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- | The Connolly Report, about dividend growth stocks, by Tom Connolly (B. Comm, 1964) was published continuously every two months since 1981. Now the actual printed report is over. The on-line blog and dividend growth data, inside this site, should continue into 2020 for a bit at least. That would begin our 40th year. | + | |
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- | [[Wisdom]]: "" | + | |
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- | [[The Investment Zoo]] by Stephen Jarislowsky - the best Canadian general investment book ever. Unfortunately, | + | |
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- | Lowell Miller' | + | |
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- | //Building Wealth with Dividend Stocks// by Joseph Tigue (he worked for S&P for years...they have the data) is also a great book on dividend investing, but again it's American data. Nine of Tigue' | + | |
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- | * New to investing? [[Starting to Invest|Some basic ideas to get you started...]] | + | |
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- | * Gu[[el]]ph - our daughter was born here in 1968 - a photo | + | |
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- | h3. Subscribers | + | |
* [[subscribers: | * [[subscribers: |