Welcome to my latest dividend income update, my Christmas-is-approaching-very-fast-edition. For those of you new to these posts on my site, every month I discuss my approach to investing using dividend paying stocks and how reinvesting the dividends paid from the Canadian companies I own are helping me reach financial freedom.
For the last few months, I’ve hinted about focusing more on low-cost Exchange Traded Funds (ETFs) to diversify my portfolio in 2014. Those plans are still intact but I’m not going to leave dividend investing behind in favour of just indexing anytime soon, not by a long shot. I’m convinced my plan to buy and hold many of Canada’s largest companies (along with indexing using ETFs) will pay off long-term and even in the short-term, it will serve me well.
Let’s look at two examples, recently, where the following companies I own announced dividend increases and 2-for-1 stock splits:
- National Bank
- TD Bank
This other company I own hiked its dividend by 11% as well.
While ETFs provide investors with low cost products to invest in, market-like returns, low effort and broad diversification, it still feels great to get a raise now and then. I’m currently on the hunt to buy some new stocks for my portfolio in 2014 and looking to find ways to fund our Tax Free Savings Accounts (TFSAs) early in the year. When I make those transactions, I’ll share them with you. In the meantime, as 2013 draws to a close, thanks to Canadian companies that pay regular dividends we’re on pace to earn about $7,480 this calendar year in dividends from our investments. November was a particularly popular month for stocks that pay dividends, about $700 was paid out into our accounts with most of that money reinvested into buying more stocks using DRIPs. Hopefully we’ll see a few more dividend increases occur before December is done but if not, I’m convinced more are coming in 2014.
What’s your take on my two-pronged approach to investing – using ETFs and dividend paying stocks?
Got a question about dividend investing? Ask away!