The Connolly Report (about dividend growth common stocks) has been published since 1981 by Thomas. P. Connolly, B.Com. ('64) toward the end of March, June, September and December. It's mostly on-line now inside this site…some eight pages a month.
$50 cheques for new on-line access subscriptions which will continue until December 2017, should be made payable to our daughter Denise Emanuel (in an envelope marked *NEW*) should be sent to Denise at
475 Scarborough Road
Toronto, ON M4E 3N3
To set up access, Denise needs
- a postal code for your password and
- an email address for an automatic notification when the account is set up.
Tom Connolly's address:
- T. P. Connolly
- Unit #607 - 185 Ontario Street,
- Kingston ON K7L 2Y7
Tom (temporary) e-mail: email@example.com
475 Scarborough Road
Toronto, ON M4E 3N3
E-transfers can be arranged by e-mail with Denise also.
Please mark your request “NEW” and include your e-mail address and a postal code. When Denise enters you as a new subscriber, there is an automated e-mail sent to let you know you now have access. If you do not mark “new” your letter will end up in the renewal pile (ten or 15 a day at this time of year and your request will not be processed as quickly.
Current Connolly Report issue (September 2016) is available for a $10 bill from our daughter Denise.
Some Mentions in the Press since 1981 (other than Rob Carrick's Report on Business October 31 2015 and 2016 columns)
The information and opinions on this site must not be considered investment advice. The information is intended to be for educational purposes. I used to teach Business. I never was, nor ever will be, an investment advisor. No particular security or investment product is recommended or has ever been recommended. I supply some data, you blend this with information from other trusted sources, then you make the decisions. Opinions can change without notice. Opinions offered here can never be a substitution for independent analysis and due diligence. This site may contain forward-looking statements. Your guess as the future value of any security is as good as mine. Forecasting is dangerous enterprise. There are risks involved with investing. As Peter L. Bernstein says in Against the Gods, “Investors must expect to lose occasionally on the risk they take. Any other assumption would be foolish.” p. 284
Copies of the Connolly Report are available at the Cobourg Public Library, the main North York Public Library on Yonge Street (way up in what I used to call Willowdale, before highway 401 went in…I grew up in Lawrence Park (north Toronto) and started my education at Blythwood Public School, the West Vancouver library on Marine Drive, the Guelph library and The National Library of Canada
My retirement plan is very simple. When they are reasonably priced, I buy common stocks of companies which have a good record of increasing dividend payments and hold them and hold them for the rising income. Here's an example: We bought our BC Gas (now Terasen and sold to Americans in fall 2005 forcing us to sell our shares: Damn Yankees…some of it is now back in Canadian hands as part of Fortis) in April of 1995 for $6.85. The dividend grew from .45 to $.84 a share¹. Our yield on those shares was12.3% (.84/6.85). The price of Terasen had quadrupled too. And, after the collapse of the stock market in the spring of 2000, Terasen rose over 90%. (In times of market turmoil, investors like dividend-paying stocks.) But we had to sell to the Americans…Duke Enegery wanted this great Canadian company and the BC Liberal government changed the law to allow them to buy it. Walter Gordon would be turning over in his grave! Can you think of a better retirement asset? Growing income. And no MER. And no maintenance or maturity date. I don't understand why people switch to bonds in retirement. Have you ever known a bond to increase its interest rate? I don't buy bonds, or G.I.C.s. I seek to produce consistent returns from safer dividend-paying common stocks rather than risk the chance of stellar gains that might come with go-go stocks. ¹ That right. As interest rates have been falling over the last decade or so, my income has been going up. You might have the thought, after reading about Terasen (formerly BC Gas), that I was cherry picking the data. I'm not. I can supply fifty different examples of dividend growth stocks with similar results. You have to wait a few years for your common stock dividends to really grow, but once the dividend growth kicks in…WOW…the yields are terrific. Here's one more example I just computed as the Bank of Montreal announced a second dividend increase for 2004 as I key this in early September 2004. Our BMO dividend goes up to .44 a quarter in November 2004 ($1.86 a year). In February 2004 our payment was .35 That is a 25% increase in one year. The yield on our $5.78 price in 1985 is now 30% (1.76/5.78). The price of BMO has more than quadrupled too. We paid $9,250 for 400 shares in 1985: with two, two for one, stock splits in 1993 and again in 2001, we now have 1600 shares valued at $86,400. We are not selling: we are holding for the 30% yield and future dividend increases. Here's another example. In 2005, Fortis shares split 4:1. We originally bought our first 500 Fortis shares in March of 1995 at $24.62 a share…some $12,300 in total. In the fall of 2005, ten years later (you have to be patient with this strategy), Fortis mailed us our new 1,500 share certificate (the 4:1 split). In total we now have 2,000 shares of Fortis. As I key this the price of FTS is close to $25…about what we paid for our 500 shares originally. Now our 2,000 shares are worth $25 times 2000 = $50,000. That's not all. In early 1996, I thought Fortis was still a good buy, so we added to our position with another 500 shares. They too are valued at $50,000. So, we have $100,000 in Fortis…just one stock in a portfolio of some 10 stocks. All, but one, have done the much same thing. We're not selling. This investment yields 9.4%. Work it out. Fortis' dividend after the split is 64¢ a share. We have 4000 shares now. Our annual income from the Fortis shares is 4000 times .64 = $ 2,560. That's about what we paid for our original 500 shares. In 2006, if Fortis increases its dividend again, and I expect it will (in 2005 the dividend increase was 12.5%) our income will go up too. Can you think of a better retirement asset?
Financial planners (now calling themselves wealth managers) because they know little about stocks, sell most people mutual funds or ETFs. Then, when retirement comes, they recommend withdraws from the funds of 4% or 5% each year. Mutual funds are not noted for providing growing income, so retirees often begin eating into capital right away. When the market collapses, as it did in 2008, retirees worry they will not have sufficient capital to fund retirement. I have no such worry. The dividend growth strategy does not depend upon capital appreciation. It counts on dividend growth. The common stocks I own begin with higher yields and, with annual dividend increases, as the examples above illustrate, the yields grow. When it comes to retirement, I live from the income. I don't need to count on the capital gains. Appreciation of the stock price, however, will occur, eventually, as the dividends increase. These gains are my retirement bonus…the extra trip each year or helping the kids with their mortgage payments. How dependable are the dividends, you ask? Well, I only buy stocks of companies which have solid earnings, electrical utilities, pipelines, banks, and food retailers mostly. And further, I want companies which have paid dividends for a least a decade, preferably more: 20 years is a good standard. Dividends are surer than capital gains. The idea of growing income is so simple. I don't understand why more folks don't do it. Think about these ideas.
Increasing income is the key. Say you are 50. Assume further that you buy a common stock with a 5% yield and that over the next few decades the dividend grows at 4% a year. By the time you are 69, you could be getting over 12% on your money. Consider this too: if the common stock with the growing income is in your RRIF, you might not ever have to touch the original capital in your RRIF. Whether the market goes up or down in the short term is irrelevant. The growing dividends can supply a good portion of your retirement income and, in most cases, your capital grows along with the dividend. I've been retired twenty years and withdrawing from my RRIF for five years. Not only is my original capital still intact, it has more doubled. The 4% maximum withdrawal rule, often touted by planners, does not apply provided you set up your dividend growth strategy well before retirement Some sixty Canadian companies increase their dividends each year: learn which companies, understand dividends, discover the ramifications of dividend increases. Dividend-paying common stocks are safer. Some companies have had double digit dividend growth for years. You'll be delighted when you discover the essence of the dividend growth investing strategy. Some more information on this retirement strategy will be available at dividendgrowth.ca from time to time. Here's why you have to get out of mutual funds, not be put into ETFs and learn to invest on your own. “Between 1984 and 2002, the stock market index made returns of 12.2 per cent a year. The average mutual fund investor made 2.6 per cent.” Hard to believe, eh! Margaret Wente, Globe and Mail p.A23 December 11, 2003