Closed

You'd think after all these years, subscribers to the Connolly Report would stop renewing. In fact, the opposite is true. My renewal rate is higher than ever. Subscribers are beginning to reap the real benefit of dividend growth investing. After a decade or so, their yields are double digits and capital is appreciating at an unbelievable clip. This is happening, not with just a few common stocks, but across their portfolios. Quite by chance, we've had a perfect storm. We bought when our stocks had higher yields, before investors wanted income from the investments, before investors wanted safe stocks after the dotcom meltdown and before the dividend tax credit was enhanced again.

Here's just one example. We bought our Fortis in 1995 for $24.62. With the 4:1 Fortis split in 2005...a decade later, our cost price is now $6.15. So, when the current dividend of .64 is divided by the cost price of $6.15, the yield becomes 10.4%. As I key this in early 2006, Fortis' price is some $23 and change...just about back, post split, to what we paid for the shares in 1995. But, with the 4:1 stock split, we now own 2000 shares...up from our original 500 shares. (The kind people with the A1 postal code in Newfoundland, sent us a new stock certificate for 1,500 shares.)
P.S. I would not consider Fortis at current (March 21 2007) prices. FTS' current yield is below it's own average yield by 80 basis (if that's .8%) points in early November 2007

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My subscribers, kindly, think I have something to do with the increase in their wealth. It's not me: it's the strategy. My function is to keep them on the dividend growth investing track and help them with a few stock purchase ideas now and then (good buying opportunities are rare). We know which stocks to buy, it's only a question of when to buy them. And really, when you come to think of it, that does not really matter very much. Take the Fortis example again. Back in 1995 would it matter much now if we paid $28 or $30 for Fortis instead of our $24.62. I think not. If you buy a quality company with good dividend growth and hold on to it for years, it will all work out. Just do it. You do not need me. Be patient. Be disciplined. Read Jarislowsky's book The Investment Zoo over and over to keep you on track.

If you are reading this page, frustrated because The Connolly Report is closed, I suggest you do some research. Dig out the great dividend growth achievers (Mergent's for instance), buy them at a reasonable price, hold on for years and discover the magic. In a way it's rather simple. You don't need me. Send for a sample copy of my report if you think it might help. It will get you the list I use and my summary of the dividend growth investment strategy. The ten dollar investment will reap thousands of dollars in benefits over the years. Don't bother doing dividend investing on your own if you are not a patient person and are not disciplined. If you miss paying your credit card bills on time...forget it. You're not the type who would succeed at do-it-yourself investing. If you'll be tempted by growth stock stories...forget it too.

2. I'm supposed to be retired. I've been teaching this stuff since 1964...writing the report since 1981.

3. I'd rather be at the cottage.

4. There more money in following the dividend growth strategy than in writing about it.

5. If I expand, I lose the personal touch I have developed with so many subscribers over the years. I reply to each renewal with a handwritten note.

6. I'd rather keep the Connolly Report price reasonable than distinguish on price.

7. I do not plan an internet edition...I'm not very good with software. Sorry. Someday...maybe.

8. My wife, who looks after the data base and stamps and stuffs envelopes, does not want any more to process. We thought of 'farming out' the work, but Louise's efforts are flawless and together we can get a report stuffed in envelopes and in the mail within three hours of coming back from the printer. The report goes to the printer Monday morning. We get it backWednesday around noon and work to get it in the mail by 5:00 p.m.. Postal codes 'N' and 'E' are done first. For some reason, they are the slowest to arrive. After they are all done, we leave for the cottage where there's no phone, no internet, no running water.

9. I don't have to spend my time with new clients. Instead, I can think and do research. A bit selfish, but I enjoy the research. I even keep a pencil and a scrap of paper on the roof at the cottage to jot down ideas as they come to mind. I hope to be finished the cedar roof this year. "About time", Louise says, "You've been at it 23 years." She wants the scaffolding down.

10. There must be another reason... Oh yes, the spots of those who do not renew are mostly taken up by childen of current subscribers.

Checked again November 8 2007