Dividend Investing Resources

  • 10 September 2019
  • Posted by admin

If you want to be and investor you have to get your information from somewhere. So many people want to invest but say it’s too complicated and are happy to hand over their savings to be managed by someone else. But in most cases this results in very inferior returns and doesn’t make for a happy investor.

With a little self education this investor can do so much better. And it isn’t as hard as they may think. These would be investors have good careers and have all the smarts to get through life, so why throw up your hands when it comes to learning about investing? By doing your own investing you can save all the fees you would pay to an advisor and invest so much more.

Yes, so much that is written is too technical and makes your eyes glaze over with numbers that are meaningless to you. That is how it is for me. But you don’t need that much information. I just need a little to get started. What business is this company in, do I understand this business, how safe is the long term viability of its products, what is the dividend amount, how long has this company paid dividends, how often do they increase dividends? That’s about it.

If I’m a shareholder in this company I’d like to get paid regularly. That’s why dividends are important.

But where do you get this information?
I look for headlines in newspapers, read blogs of other people that are investing similarly, then follow up if I see something interesting. If you google financial blogs you can find many that invest for dividends and pick some companies that you recognize and like. I have also listed companies that we have in our portfolio in my previous post. You can google anything and get more info on these specific companies. For example, Emera utility, click on investors, shareholder information, and dividend payment history. There it is.

Here is an article I saw last week in The Globe and Mail by Rob Carrick. He writes a lot of informative finance columns.
This article re-enforces quite a few of my theories and how I invest.
But no matter where you get your information you must verify its source and motivation, and see how it fits with your investment plan.

REITs and utilities are the champion asset classes of the past 20 years

Through all the stock market ups and downs of the past 20 years, the best-performing asset classes for Canadian investors have been real estate investment trusts and the utility sector.
It’s almost shocking how much better these two sectors have done in comparison with much riskier corners of the market.
REITs produced average annual total returns of 11.8 per cent for the 20 years to July 31, according to data published by PWL Capital (the firm’s monthly data tables are a great online resource). Utilities gained an annualized 9.4 per cent. The only other asset class with comparable 20-year gains was the U.S. REIT market, at 10.2 per cent on an annualized basis.
Falling interest rates are a big part of the story here – they have created an ideal environment for income-paying stocks that offer higher yields than bonds. The broader stock market has also benefited from falling rates, but not so dramatically as REITs and utilities.
Both of these sectors are consistent winners – their 20-year dominance isn’t based on a couple of blowout years. Canadian REITs had one- and five-year gains of 14.6 per cent and 8.8 per cent, respectively. Utilities made 20 and 8.8 per cent over those same periods, while the S&P/TSX Composite Index made 3.1 and 4.4 per cent. The annualized 20-year gain for the S&P/TSX was 6.9 per cent, while the S&P 500 in U.S. dollars made 6.2 per cent.
The strong results from REITs and utilities are particularly interesting in light of the results from asset classes that supposedly offer the potential for high returns in exchange for high risk. Emerging markets have a 20-year annualized return of just under 7 per cent. Small-cap stocks in the Canadian market have a 20-year return of 4.4 per cent, while U.S. small caps delivered gains of 7.2 per cent.
REITs and utilities have been leaders yet again on a year-to-date basis, which isn’t a surprise when you look at how bond yields have been falling. Both sectors are vulnerable to rising rates, but that doesn’t seem to be a problem right now.

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