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+ | * CNR’s dividend at the turn of the century was 12¢. In January of 2024 CN’s dividend was $3.38. That’s 14.9% a year. Dividends are a big deal. As dividends go, so does the stocks’s price. CNR’s price went from $7 to $78. Our income doubles every decade of so. So does our capital. | ||
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{{why_dg_oct_2016.pdf|}} Dividend Growth Investing | {{why_dg_oct_2016.pdf|}} Dividend Growth Investing | ||
- | * How can it be? How can a dividend increase affect the price of a stock? Especially if it's only a cent or two. It's unbelievably simple: an investment that produces more income becomes more valuable. Metro' | + | * How can it be? How can a dividend increase affect the price of a stock? Especially if it's only a cent or two. It's unbelievably simple: an investment that produces more income becomes more valuable. Metro' |
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+ | January 2023- **Ask Your Adviser** - A Rob Carrick’s column in early January 2023 had the headline “Five things to talk with your investment adviser about after the sad returns of 2022”. I’ve been thinking about what Rob said. Is a one year period enough to judge returns? Certainly not. Although total return was mentioned, Rob is mainly talking price returns. Most investors do. Over time, however, return on equities will track the sum of yield plus dividend growth. In the last decade, the CAGR (compound annual growth rate) of the 28 stocks I follow has been 8.79%. This is what really matters. ♦ My questions to ask your adviser, because of this, are quite different. First of all, I would not, and do not have an advisor. Advisors don’t have the answers. They are paid to peddle product and have no skin in your game. Most are not fiduciaries. An advisor should tell you that return has two parts: the investment return and the speculative return. The investment return, yield plus growth) is fairly stable, predictive, in fact. The speculative return fluctuates with human emotion. It is the speculative return that is falling. ♣ We could ask the adviser why they did not call in 2021 when the market was very high? Actually, I do not invest in the market. The market is a giant distraction for the business of investing. In the last major bear market, starting in 1964, the Dow was 874: in 1981;_— the Dow was 875. I do not buy index funds. | ||
+ | ♦ Did the advisor inform you inflation was about to increase and suggest you cut back on bonds (fixed income) and move more into equity with its growing income. A growing income makes a company more valuable and drives up its price. Actually, returns from equities, over time, make stocks safer. Safer than bonds, in fact. ♦ My retirement __income__ doubles every decade, on average: This means my capital will double also. ♠ In my view, advisor’s biggest error is not apprehending yield growth. As a result, an advisor does not know how to protect a portfolio. They are infected by modern portfolio theory. It’s just a theory and it’s wrong. Return, for instance, is not really related to risk. Return is more in the price you pay. Return, is the long run, tracks the sum of your initial yield and dividend growth. Price gains are driven by this increasing cash flow. Never buy a stock without knowing its ten year record of year-over-year earnings and dividends. The Connolly Report 2022 summary of dividend growth, year-by-year, | ||
- | Ask Your Adviser - A Rob Carrick’s column in early January 2023 had the headline “Five thinks to talk with your investment adviser after the sad returns of 2022”. I’ve been thinking about what Rob said. My questions to ask your adviser are quite different. First of all, I would not, and do not have an advisor. Advisors don’t have the answers. They are paid to peddle product and have no skin in the game. For instance, we could ask the adviser why they did not call in 2021 when the market was very high? Actually, I do not invest in the market. It is a giant distraction for the business of investing. | + | * |
- | Did the advisor inform you inflation was on the increase and suggest you cut back on bonds (fixed income) and move more into equity with its growing income. A growing income makes a company more valuable and drives up its price. Actually, returns from equities, over time, make stocks safer. Safer than bonds, in fact. | + | |
{{divup_priceup_77_87.pdf|}} ← Evidence that as the dividend rises, the price will too (Aug 2020). | {{divup_priceup_77_87.pdf|}} ← Evidence that as the dividend rises, the price will too (Aug 2020). | ||
- | * Dividend growth investors focus on the income their assets produce. Over the years, in aggregate, our dividends | + | * Dividend growth investors focus on the income their assets produce. Over the years, in aggregate, our dividends grow. From January 2008, the 24 Connolly Report dividend growth stocks grew 8.6% a year. The 2008 yield was 3.2%, so our return was 11.8%. Very few income funds grow their distributions. Dividend growth investors do not have to depend upon the size of the pot to fund our retirement. And here's the real bounty: our pot keeps growing as retirement progresses driven by dividend increases. A company that provides more income is more valuable: so, it's price rises too. It's not only true, but common sense. You can still join our group. |
♦ Here’s proof that the dividend growth strategy works. (As you read this, ask yourself if this is believable.) A decade ago, in 2012, BCE’s yield was 5.8%. As I key this in mid-September 2022, BCE’s yield is 5.8%. No big deal, eh. Ah.h.h but it is! In 2012 BCE’s dividend was $2.17 a share. Now (2022) the dividend is $3.64 per share, per year. From $2.17 to $3.64 is an average 5.3% increase every year (CAGR). Now here’s the wealth building kicker. **As the dividend goes, so does the price**. In 2012 BCE’s price was $42 a share. I’ve been studying dividend growth for over 40 years and know/ | ♦ Here’s proof that the dividend growth strategy works. (As you read this, ask yourself if this is believable.) A decade ago, in 2012, BCE’s yield was 5.8%. As I key this in mid-September 2022, BCE’s yield is 5.8%. No big deal, eh. Ah.h.h but it is! In 2012 BCE’s dividend was $2.17 a share. Now (2022) the dividend is $3.64 per share, per year. From $2.17 to $3.64 is an average 5.3% increase every year (CAGR). Now here’s the wealth building kicker. **As the dividend goes, so does the price**. In 2012 BCE’s price was $42 a share. I’ve been studying dividend growth for over 40 years and know/ | ||
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**January 2021 blog** inside this site (five pages): 20 year, year-by-year, | **January 2021 blog** inside this site (five pages): 20 year, year-by-year, | ||
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+ | “Facing uncertainty, | ||
* **Target date funds** bungle* up your retirement finances. How? Just as your equities become safer, before retirement via the build up of intrinsic value, target date funds automatically sell your stocks and buy more bonds. Just say no to target date funds. "As an investors time horizon lengthens", | * **Target date funds** bungle* up your retirement finances. How? Just as your equities become safer, before retirement via the build up of intrinsic value, target date funds automatically sell your stocks and buy more bonds. Just say no to target date funds. "As an investors time horizon lengthens", | ||
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* After a decade or so, quality dividend growth stocks provide __yields__ which outpace the TSX and that's without factoring in appreciation in the stock price. Learn about this inside. The entry fee is $50. Alternatively, | * After a decade or so, quality dividend growth stocks provide __yields__ which outpace the TSX and that's without factoring in appreciation in the stock price. Learn about this inside. The entry fee is $50. Alternatively, | ||
- | EXAMPLE: **August 2019 Connolly Report Blog summary**: 2019 dividend growth update ♣ Berkshire' | ||
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Inside dividendgrowth.ca you will learn: | Inside dividendgrowth.ca you will learn: | ||
* that as the dividend grows, so will the price of your quality rising dividend company. We constantly compare dividend growth and price growth. The correlation, | * that as the dividend grows, so will the price of your quality rising dividend company. We constantly compare dividend growth and price growth. The correlation, | ||
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* Discover that ETFs allow advisors, who know little about investing, to play with the hard-earned money of savers using the faulty concepts of modern portfolio theory: over–diversification, | * Discover that ETFs allow advisors, who know little about investing, to play with the hard-earned money of savers using the faulty concepts of modern portfolio theory: over–diversification, | ||
* Inside you will learn how to scrap just about the entire methodology of modern portfolio theory and return to the timeless principles of investing. Take your sacred savings out of the hands of middlemen who have no skin in your game. | * Inside you will learn how to scrap just about the entire methodology of modern portfolio theory and return to the timeless principles of investing. Take your sacred savings out of the hands of middlemen who have no skin in your game. | ||
- | * Oct 1st 2019 - a short essay on the inferior performance of professionals . . . you'd never believe why most pros can't beat the index. It's why I do not buy ETFs. | + | * Oct 1st 2019 - a short essay on the inferior performance of professionals . . . |
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* how to select the few quality companies you need to build wealth. | * how to select the few quality companies you need to build wealth. | ||
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http:// | http:// | ||
- | Martin Mittelstaedt' | + | * |
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Most investors do not know, let alone believe, that as the dividend rises the price of the stock will also rise. Think. If a company is throwing off more cash each year (dividends), | Most investors do not know, let alone believe, that as the dividend rises the price of the stock will also rise. Think. If a company is throwing off more cash each year (dividends), | ||
* ETFs allow so-called ' | * ETFs allow so-called ' | ||
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Linked just below is a rather good item (May 23 2011) about reasons to buy and hold dividend growth stocks: | Linked just below is a rather good item (May 23 2011) about reasons to buy and hold dividend growth stocks: | ||
http:// | http:// | ||
- | * [[Fourth Quarter 2017]] Rob Carrick on dividend growth boosting a stocks' | ||
- | * [[First Quarter 2016]] Connolly Report since 1981...thirty five years | ||
- | * [[Fourth Quarter 2015]] Why dividend growth investors do better. | ||
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- | * [[First Quarter 2015]] - " | ||
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- | * [[Fourth Quarter 2014]] - You must construct an individual dividend growth portfolio | ||
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- | * [[Third Quarter 2014]] Link to a retirement investing column in The Economist | ||
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- | * [[First Quarter 2014]] - the essence of dividend growth investing | ||
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- | * [[Third Quarter 2013]] | ||
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- | * [[Second Quarter 2013]] - PBS Frontline - The Retirement Gamble - Dump your funds! | ||
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- | * [[First Quarter 2013]] - dividends provide most of the return | ||
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- | * [[Fourth Quarter 2012]] - a growing income, up 9.6% in 2012 | ||
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- | * [[First Quarter 2012]] - //Probable Outcomes// | ||
- | * [[Thoughts from 2011, '12 and '13]] | ||
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- | * [[Third Quarter 2011]] - observe comment titles below | ||
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- | * [[DGDPG2013]] - An example of how dividend growth drives price growth... | ||
- | * [[Falling Market]] - some thoughts in June 2012 | + | ——— |
* Living from dividends in retirement [[WSJ_May10]] | * Living from dividends in retirement [[WSJ_May10]] |