The Metamorphosis From Mutual Fund Investor to Dividend Investor

Personal Finance blogger Moolanomy has a contest going to win a book by writing a post about our own investing story. I was intrigued by some of the posts that I have been reading in reference to this contest so I wanted to participate. My entry is about my metamorphosis from being a mutual fund investor to a dividend investor.

My interest in investing started when I was about 12 years old while spending summers at my grandparent’s cottage. Everyday few days my Granddad would go to the store to pick up a newspaper and he would sit down and read the stock tables. Being the curious 12 year old that I was, I asked him what he was doing. It was at that point, and during the rest of that summer, that I began my education in how the stock market worked.

Fast forward 6 years and I was now an 18 year old going into University and working part time at a hotel making good money in tips and hourly wage (but mostly tips). I also read the book, The Wealthy Barber and knew I needed to become an investor and start investing on a monthly basis. I just so happened to come across an advertisement in the newspaper for an investment company called Altamira. Altamira’s business was no-load mutual funds that allowed investors to invest monthly with as little as $25 per month. I signed up and bought a Canadian equity fund every month with $25. I have been investing every month since then, except for the year and a half period I was busy getting and paying for my MBA.

Over time I kept reading investing books and started reading that mutual funds were perhaps not the be-all-end-all their marketing materials were telling me. Specifically, I discovered the The Motley Fool and realized that I was smart enough to start investing in index funds and perhaps individual stocks (p.s. – you don’t need to be super smart to invest on your own). I started reading as much as I could on stock selection and began buying stocks. My investing focus changed from investing in mutual funds, which I was now convinced were not a good choice because of fees and poor performance relative to the market, to investing in index funds and individual stocks. I had not starting focusing on dividend stocks yet.

You will notice a theme here in my investing education through the years – books had a big part in my strategies and invest philosophy. My dividend focus began by seeing compound growth charts for companies that consistently increase their dividends in books like The Single Best Investment and The Dividend Growth Investment Strategy. Slowly but surely I began researching and investing in dividend growth companies such as Royal Bank and Wal-Mart.

This leads me up to today as an independent dividend investor who is skeptical of investment marketing and mutual funds and trying to build up a retirement fund on my own using high quality, dividend growth stocks. I know am not done learning yet but I beleive I have a strategy that I will be comfortable with over the long haul and look forward to seeing where it takes me.

(Photo Credit: Erika Thorpe)