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home [2023/01/16 14:51]
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home [2024/02/09 17:43] (current)
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| | * CNR’s dividend at the turn of the century was 12¢. In January of 2024 CN’s dividend was $3.38. That’s 14.9% a year. Dividends are a big deal. As dividends go, so does the stocks’s price. CNR’s price went from $7 to $78. Our income doubles every decade of so. So does our capital. |
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| {{why_dg_oct_2016.pdf|}} Dividend Growth Investing | {{why_dg_oct_2016.pdf|}} Dividend Growth Investing |
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| * 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's dividend in 2019, for instance, increased from 18¢ to 20¢. That's up 11%. Do you believe that MRU's price will rise by 11% also? It will. The proof, developed over decades, is inside. Another: BMO's dividend went from $3.78 to $4 in 2019: up ♠♠7.3%. As a result, BMO's price will rise too. Year after year wealth/capital builds, driven by the growing income. | * 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's dividend in 2019, for instance, increased from 18¢ to 20¢. That's up 11%. Do you believe that MRU's price will rise by 11% also? It will. The proof, developed over decades, is inside. Another: BMO's dividend went from $3.78 to $4 in 2019: up ♠♠7.3%. As a result, BMO's price will rise too. Year after year wealth/capital builds, driven by the growing income. |
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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. My questions to ask your adviser 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. An advisor should tell you that return has twoparts: the investment return and the speculative return. The investment return is fairly stable, predictive, in fact. The speculative return fluctuates with human emotion. ♣ 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. | 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. | ♦ 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, over the last decade is inside this site. And the summaries go back decades, each overlapping each other. This is the real way to measure your return, your portfolio’s progesss. |
| ♥ Most likely 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, it’s more in the price you pay. Return, in the long run, tracks the sum of your initial yield and dividend growth. Price gains are dividend by this increasing cash flow. Never buy a stock without knowing its ten year record of year over year earnings and dividends. | |
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| **January 2021 blog** inside this site (five pages): 20 year, year-by-year, dividend data which is updated for splits; you can take $7,000 per year from a $100,000 portfolio; our updated Streaker (at least decade long dividend growth record) List; my own 2020 RRIF withdrawal was 80% dividends (we eat less capital). | **January 2021 blog** inside this site (five pages): 20 year, year-by-year, dividend data which is updated for splits; you can take $7,000 per year from a $100,000 portfolio; our updated Streaker (at least decade long dividend growth record) List; my own 2020 RRIF withdrawal was 80% dividends (we eat less capital). |
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| | “Facing uncertainty, investors opt for security and attractive yields.” was a headline I saw in Investment Executive the other day. I smiled. I did not read the item. Is it not nice that we (growing income investors) do not need to worry about these matters? Our yields from good companies bought years ago are more than attractive now and these yields are still growing. This provide security: a stock providing an increasing cash flow become more valuable regardless of what the market is doing. |
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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", Warren Buffett says, "equities become progressively less risky than bonds." (2018 Letter, page 6) or this by Mr Buffett on February 27, 2021 "bonds are not the place to be these days" Tragically, more employers are defaulting to target date funds for pension plans. Absolute stupidity! And when bonds are in a fund, they lose their guarantee of your money back. ♣ I do not own bonds, never did, never will. Why not? The dividend on one stock in our portfolio was 32¢ when I retired in 1996. Now that dividend is $3.60 a share...up 10% a year. Why would I want to shift to fixed income? * bungle is informal for: mis-manage, work badly, damage or malfunction | * **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", Warren Buffett says, "equities become progressively less risky than bonds." (2018 Letter, page 6) or this by Mr Buffett on February 27, 2021 "bonds are not the place to be these days" Tragically, more employers are defaulting to target date funds for pension plans. Absolute stupidity! And when bonds are in a fund, they lose their guarantee of your money back. ♣ I do not own bonds, never did, never will. Why not? The dividend on one stock in our portfolio was 32¢ when I retired in 1996. Now that dividend is $3.60 a share...up 10% a year. Why would I want to shift to fixed income? * bungle is informal for: mis-manage, work badly, damage or malfunction |
| * 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, read //Building Wealth with Dividend Stocks// by Joseph Tigue or ♣ Your Growing Income by Henry Mah. You'll be tens of thousands of dollars ahead. We are hundreds of thousands ahead having started at the turn of the century. If you are not disciplined and patient, forget it and index with an over-diversified ETF full of mediocre issues. Quality does it, holding does it. Facts about dividend, as the dividend goes so does the price, say, do not cease to exist because one ignores them. | * 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, read //Building Wealth with Dividend Stocks// by Joseph Tigue or ♣ Your Growing Income by Henry Mah. You'll be tens of thousands of dollars ahead. We are hundreds of thousands ahead having started at the turn of the century. If you are not disciplined and patient, forget it and index with an over-diversified ETF full of mediocre issues. Quality does it, holding does it. Facts about dividend, as the dividend goes so does the price, say, do not cease to exist because one ignores them. |
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| EXAMPLE: **August 2019 Connolly Report Blog summary**: 2019 dividend growth update ♣ Berkshire's prime goal is ... ♣ portfolio selections . . . ♣ two stocks mentioned . . ♣ Is refuge in bonds needed now? ♣ Keynes on portfolio construction ♣ What did Buffett says to concentrate on in his 2019 Letter? What's his prime goal in deploying Berkshire's capital? ♣ What the average rate of dividend growth since the war? ♣ With our yield growing each year, what kind of yield can you expect after a decade? And our capital grows at the same rate, right (no question mark) Why?♣ Why the 4% Rule is bunk for us? What's wealth? ♣ Portfolio Spending Rate (four paragraphs of comment on AAII Journal). | |
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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, according to Ned Davis Research is over 80% after a decade or so. It's truly amazing! For instance, Empire's dividend was 4¢ a share in 1997. Now the dividend is 46¢, up 11.7% a year. This drove the price from $3.05 to $37 a share, up 12% CAGR. Do your saving grow at 12% a year? | * 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, according to Ned Davis Research is over 80% after a decade or so. It's truly amazing! For instance, Empire's dividend was 4¢ a share in 1997. Now the dividend is 46¢, up 11.7% a year. This drove the price from $3.05 to $37 a share, up 12% CAGR. Do your saving grow at 12% a year? |
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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, beta and market efficency. | * 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, beta and market efficency. |
| * 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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| | * you'd never believe why most pros can't beat the index. It's why I do not buy ETFs. |
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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. |
| http://www.theglobeandmail.com/globe-investor/investment-ideas/retiree-prefers-blue-chip-dividend-stocks-over-bonds-and-gics/article24348328/ | http://www.theglobeandmail.com/globe-investor/investment-ideas/retiree-prefers-blue-chip-dividend-stocks-over-bonds-and-gics/article24348328/ |
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| Martin Mittelstaedt's June 15 2012 column in the Report on Business discussed the cost of a dollar's worth of dividends. "Behind rising dividend yields, a hidden warning for [the] economy". | * |
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| http://www.theglobeandmail.com/globe-investor/investment-ideas/blue-chip-yields-flashing-red/article4264857/ | |
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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), it's more valuable. Inside this site I prove this in many ways. Here is just one example from Burton Crane's 1959 book (The Sopisticated Investor, page 13) If an investor had put $10,000 into each of the various 101 NYSE stocks in 1913, by 1953 the dividend received would have been $10,140,258. What had the price of the stock grown to? $10,141,731. As the dividends grow, so does the price of the shares! | 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), it's more valuable. Inside this site I prove this in many ways. Here is just one example from Burton Crane's 1959 book (The Sopisticated Investor, page 13) If an investor had put $10,000 into each of the various 101 NYSE stocks in 1913, by 1953 the dividend received would have been $10,140,258. What had the price of the stock grown to? $10,141,731. As the dividends grow, so does the price of the shares! |
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| * ETFs allow so-called 'wealth managers', who know nothing about proper investing, to build a portfolio with a click or two. Ludicrous! I hold individual companies with a long record of increasing dividends. ♣ Here's another reason I never buy an ETF: AIMCo. It seems one of Alberta's pension traders lost some $2.1 billion in trades linked to volatility. AIMCo executives have been fired. Money manages toe the line. Portfolios are all too similar. If the managers don't conform and lose, they're out. We, as a result, with individual portfolios can win by selecting a few the best dividend growth companies and not adding scores of poor quality stocks. | * ETFs allow so-called 'wealth managers', who know nothing about proper investing, to build a portfolio with a click or two. Ludicrous! I hold individual companies with a long record of increasing dividends. ♣ Here's another reason I never buy an ETF: AIMCo. It seems one of Alberta's pension traders lost some $2.1 billion in trades linked to volatility. AIMCo executives have been fired. Money manages toe the line. Portfolios are all too similar. If the managers don't conform and lose, they're out. We, as a result, with individual portfolios can win by selecting a few the best dividend growth companies and not adding scores of poor quality stocks. |
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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: |
| http://seekingalpha.com/article/271326-9-real-world-reasons-to-own-dividend-growth-stocks?source=from_friend | http://seekingalpha.com/article/271326-9-real-world-reasons-to-own-dividend-growth-stocks?source=from_friend |
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| * [[Fourth Quarter 2017]] Rob Carrick on dividend growth boosting a stocks's price. | |
| * [[First Quarter 2016]] Connolly Report since 1981...thirty five years | |
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| * [[Fourth Quarter 2015]] Why dividend growth investors do better. | |
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| * [[First Quarter 2015]] - "[Bonds] are not intrinsically safe." James Grant | |
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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 | |
| http://www.economist.com/news/finance-and-economics/21606894-many-retired-people-dont-have-proper-pensions-any-more-financial-services | |
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| * [[First Quarter 2014]] - the essence of dividend growth investing | |
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| * [[Third Quarter 2013]] What do dividend growth investors do that is different? | |
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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 '13]] | |
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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 | ——— |
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| * Living from dividends in retirement [[WSJ_May10]] | * Living from dividends in retirement [[WSJ_May10]] |
