Dividend Growth and Why it Matters

“Stocks go up because dividends go up” - Daniel Peris, The Strategic Dividend 

Here is another great stat about what dividend growth and hanging on for the long term can do;

Over the last 42 years the dividend from Canadian Utilities (CU) has grown 7.4% annually and it's price has gained 7.9%. That's a 15.3% annual growth rate from this one stock. Who do you know on the financial news that recommends stocks like this?

"The crux of your success will be selecting leading companies stocks and holding on to them for many years" - Stephen Jarislowsky, The Investment Zoo pg.98

I invest mine and my wife's retirement money for the FUTURE cash flow it will bring. To do this we hold and hold and hold. By the time these retirement accounts have to be converted into RRIFs they should be generating capital growth and a good steady stream of dividend income.

Our Retirement Holdings Can Be Viewed Here


You have to think and act differently than all the investment noise out there to win at the long term investing game. What does that mean? You invest so that one day all the stocks will return to you in dividends what you initially paid for the stock. This is the crux of long term thinking. Embrace it and ignore the SELL people on TV. You and I ignore the market. Buy quality companies and don't worry about what your friends and co-workers are saying.

Buffett Buffet Tidbits

I use what the master has tried to teach us when it comes to being successful at investing;

• acquire a business at a sensible price with excellent, able and honest management
• never invest on the beta value of a stock. It is a useless measure
• think of your holding period for a company as indefinitely. The ROE should be at least 20-25% is what I shoot for and the market does not overvalue the business
• if you buy into the market as it is overheated (like today) then realize it might take longer to catch up to the price you paid

It is impossible to beat everybody else if you think the same way as everybody else. We win at this game if you commit and stick to long term thinking and avoid all who believe in Modern Portfolio Theory. It proposes that BETA can be diversified away. We don't believe in diversification. We believe in a concentrated portfolio of DG stocks bought at a reasonable price and held indefinitely.

MPT is also code for efficient markets. That the market return is what you receive less cost if you invest in the whole market. Why would I want to? There are so many bad businesses in the market I don't want to own. This is what id used by financial planners and advisors to sell you funds, ETFs and to charge fees. Why bother when 80% can't beat that same market they are telling you your return will be. Stop lapping up this insane mainstream garbage. You and I can and will do better buying quality companies and knowing what you're invested in and holding.

"As an investor's time horizon lengthens, a diversified portfolio of equities become progressively less risky than bonds, assuming that the stocks are purchased at a sensible multiple of earnings to then prevailing interest rates."
- Warren Buffett, May 2018 letter to shareholders

I don't own any bonds or preferred shares in any portfolio. Sold all of them when I adopted the DG strategy of investing.

Buffett goes on to say in his letter that "it would be a terrible mistake for long term investor's to measure risk by the ratio of bonds to stocks in their portfolio."
"The return is almost exclusively driven by dividends. Growth + Yield = Total Return" - James Montier

The fact is the market is NOT always efficient. This allows us to just go ahead and do our simple stuff like buy a bank, utility, telecom, railroad and maybe some food retailer = TULF . Most now have bought a pharmacy. These will be great long term companies to hold. I use TULF as taught by Tom @ dividendgrowth.ca and who I follow.

This is how we are slowly growing retirement income from the cash flow of big stable companies and with it WEALTH!

I will continue to monitor that cash flow in retirement even though I will treat the portfolio with benign neglect.

Do you believe in MPT or an all equity portfolio invested for the growing cash flow?

Looking for Saving Ideas so You Can Invest? 

If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.


All 3 of these books written for Canadians by Canadians.