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As a dividend growth investor, I am not necessarily after the highest yields. I tend to look for dividend growth as opposed to just yield. That being said, high dividend stock investing has proven to be a positive strategy. Jeremy Siegel, who is famous for his book, The Future for Investors, studied the S&P 500 from 1957 to 2002 by breaking stocks into 3 groups: highest dividend stocks, lowest dividend stocks, and the entire S&P 500. His results are presented in the chart below: Click …

Continue Reading about Day 3: The Dividend Key – High Dividend Stocks

In yesterday's post on The Dividend Key, the importance and value of reinvested dividends was presented. Today, I am going to present the findings of a study by Robert D. Arnott that broke down investment returns into their individual components. The study looked at three sources of returns for investors: 1. Inflation - the amount a stock grows just through inflationary trends 2. Valuation expansion - the company becomes more valuable and therefore so does the stock price 3. …

Continue Reading about Day 2: The Dividend Key – Real Return Comes from Dividends

I thought I would kick the new year off with series of posts on why I have focused on investing in dividend paying stocks. There is scads of research out there that speaks to the benefits of a dividend based approach, and Tweedy, Browne Fund Inc. has put together a summary of these benefits and posted a pdf document which every investor should read. I think it is so important that I am doing a series of 6 posts that will present what I think are the most interesting findings from this summary. …

Continue Reading about Day 1: The Dividend Key – Reinvested Dividends

Can your stomach tolerate a 30% drop in portfolio value rather quickly? Determining your investment risk profile is one of the first steps any investor should take when thinking about designing a portfolio and an asset allocation. It really will tell you what level of risk you will be comfortable with in your portfolio. It all comes down to what level of risk, or standard deviation, an investor is willing to put up with in the pursuit of investment goals (link to Excel chart creation). In …

Continue Reading about Investment Risk Profiles

I am a visual type of guy and like to see things in either hard print or digital data right in front of me. I have two portfolio goals I have set for myself - one is a short-term goal (link) and the other is a long-term (link) goal. To see how I am tracking to these goals I have created a nifty little Microsoft Excel chart that shows presents me with a cool vidual representation of where I am at in relation to each goal. It was very easy to set up and have outlined the steps below to do this …

Continue Reading about Creating a Goal Tracking Chart in Excel

It has become very clear to me over the past few weeks that the biggest benefit of a tax deferred account such as a RRSP (Canada), pension plan or a 401K (U.S.) is NOT the tax benefits. It is also not the employer match programs that sometimes comes with them nor the flexible investment options within the plans. These are all great benefits, but in my mind they are not the most important. The most important benefit of these tax deferred accounts is that they lock up your money for a long time …

Continue Reading about The Real Benefit of Tax Deferred Accounts