The June 2010 Connolly Report, Volume XXX #3, about dividend growth common stock was uploaded June 14 2010. report summaries
SELL Feb 1 2010: The market has risen a lot since March 2009. If I owned any mutual funds which did not pay much income, I'd be thinking of selling, of getting out while the getting is better than it will be. I don't, so I'm not. I'm holding the dividend growth stocks purchased year ago…for the income. Because of dividend growth, we're now getting, for instance, a 12.6% yield on the Canadian Utilities that we bought in 1992. There's no way I'd sell. There is another yield on cost example just below.
What I do, in a sentence:
When they are value priced, I buy dividend-growing common stock and hold them for the income.
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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.
Since 1981.
* I've never bought preferred shares, or bonds or mutual funds.
The Connolly Report, about dividend growth stocks, by Tom Connolly (B. Comm, 1964) has been published continuously every two months since 1981…now from downtown Kingston, Ontario. The print edition of The Connolly Report has been closed since 2001. I doubt this on-line edition will be open to new subscribers…most have renewed for 2010.
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Wisdom: ”“The single factor that drives investor success is not picking winning firms, but rather the entry point at which the firms are purchased.”
The Investment Zoo by Stephen Jarislowsky - the best Canadian general investment book ever. Lowell Miller's The Single Best Investment - Creating Wealth with Dividend Growth is the best book on dividend growth investing…though with American examples. A book report was in December 2006 issue and will be inside this site.
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's pages are worth the price of the book. Chapter 5 is the best. The essence of dividend growth investing is outlined in the middle of page 66 of Building wealth with Dividend Stocks. I prepared a book report for subscribers: it will be inside soon