DIY Investor Profile 2018 Update – Susan Brunner
Susan Brunner is a successful do-it-yourself (DIY) investor who has been investing in dividend paying stocks for decades. Thanks to her investments, she hasn’t had a mainstream job since 1999! (She still doesn’t.)
Many years have passed since that investor profile and I figured it was time to get an update – she kindly obliged. Here was our conversation about why she’s still very fond of dividend paying stocks, what she thinks about investment clubs, and her take on Exchange Traded Funds (ETFs) even though she’s not an indexer.
Susan, welcome back to the site!
Thanks for having me again.
Last time we talked, geez, 2012 (time flies), you shared your journey into owning dividend paying stocks for the long haul. Why are you still fond of dividend paying stocks? What are your top-10 holdings?
You’re right Mark. I have not lost my fondness for dividend growth stocks. In the following table I am showing my top 10 stocks. Note to your readers OTC means Over-The-Counter market.
|Canadian National Railway||TSX||CNR||NYSE||CNI|
|Computer Modelling Group Ltd||TSX||CMG||OTC||CMDXF|
|Pembina Pipelines Corp||TSX||PPL||NYSE||PBA|
|Richelieu Hardware Ltd.||TSX||RCH||OTC||RHUHF|
|WSP Global Inc.||TSX||WSP||OTC||WSPOF|
Interesting holdings. I own some of those. Any new stocks you have your eye on? Why or why not?
I’m trying out a couple of new stocks of:
|Alaris Royalty Corp||TSX||AD||OTC||ALARF|
|Atrium Mortgage Investment Corp||TSX||AI||OTC||AMIVF|
Alaris Royalty Corp provides money for private corporations. So far, I have lost some 17.9% on this investment.
Atrium Mortgage Investment Corp is a non-banking finance company providing residential and commercial mortgages that lends in major urban centres in Canada where the stability and liquidity of real estate are high. I just bought this a few months ago and I have up 4.4%.
So, in our last interview you told me “I tend to try out new stocks with a smallish investment and see how things go. If they go well, I might invest more. If an investment does not do well over the next 3 to 5 years, I might sell.” I see you continue to do that. Why?
I feel some big gains could be had given the core of my portfolio is very stable. Then again, you can lose money – see Alaris! I am mostly using my TFSA to try out the new stocks. I bought Alaris Royalty for the TFSA, but actually Atrium Mortgage was for my LIF account.
As part of this recent update on my site – Financial Freedom Target: Age 50 – I shared some details about our financial path and what we hope to accomplish in the coming give or so years. What are your thoughts on my approach and what benefits or flaws do you see in my thinking?
I can only speak from my experiences Mark. I am sure that in different time periods and different focus, things would be different.
First, I think dividends are great. If you invest in dividend growth companies you let compounding work for you. My dividend yield is relatively low since I have a variety of dividend growth stocks. My yields run between 1% and 6% for those companies. There tends to be a trade-off between yield and growth for dividends – I’m sure you know this as well. My portfolio yield runs between 3 and 3.5%, so on a $1,000,000 portfolio that works out to $30,000 to $35,000 per year.
Second, I wish there was the TFSA when I was saving for retirement. I had half my money in a trading account/taxable account and half in an RRSP when I stopped working. Taking money from the RIF and LIF means paying a lot in tax and I get no Old Age Security (OAS). If I was doing it over I would have had more in the trading account and less invested inside my RRSPs. I put money into my RRSP at a lower tax rate than what I am now taking it out.
I was lucky in that I was doing my saving and investing in the great bull market running from 1982 to 2000. In dreaming big when I started investing, I looked for returns of 10% a year but knew little about investing at that time. However, I was lucky as I reached my goals and in fact exceeded it.
I probably did well because of that big bull market. I focused on financials (especially banks) and utilities and stayed away from resources (oil and gas and mining) that are more cyclical.
Maybe a question for you Mark: you have a good financial plan for retirement, but have you thought of what you are going to do in retirement?
I suspect that a lot of people will work past retirement age just to have something to do. The statistics health wise are awful for inactive retired people. You need things to do, you need exercise and socializing to keep your mind and body healthy.
The other thing I will tell you is – life happens. There are always unexpected things that happen to change your plan. Some are good and some are not. I have met a number of people through Meetup and other social clubs that have lost their spouse or best friend or did a gray divorce or just moved to Toronto because their kids are here. They are looking for things to do and also to meet people.
I’m staying engaged by doing my stock research and blogging. I also walk at least an hour a day (getting to 10,000 steps). I have a walking buddy to walk through the parks and ravines of Toronto, I go out to lunch (a lot), I socialize via my clubs; I do Tae Bo (just Google Billy Blanks via YouTube) daily and I am starting into weights.
An active body and mind will be factors in living a long-life Mark. Make those changes now so you can enjoy things as you get older.
Thanks Susan. I’m getting more serious about my exercise actually. In your email to me, you told me you’ve joined 3 investment clubs recently. What was the trigger for that?
Yes, since our last interview I have joined 3 investment clubs. One is by Ellen Roseman and is a share club. Share clubs are promoted by Money Sense Magazine – I recall you’ve been quoted in that publication a few times. Another club is sponsored by StockTwits through Meetup. A third is run by my friend Peter. I got involved with some investment clubs because I had two lady friends I used to talk to about stocks. Unfortunately, they both died so I had no one left to talk to about investing. With one friend we used to go to have lunch in a really nice restaurant to discuss stocks. I still miss this.
I read a book called You Could Live a Long Time: Are You Ready? by Lyndsay Green. In the book the author talked about the importance of being open to new friendships as you age. The problem with aging is that you are going to lose friends. They are going to move away to retire or they are going to die. Sad, I know but true. Because of this book I joined some investment clubs and Meetup.
Some of the members of Peter’s group are worried about the next bear market and about putting enough of their money into cash. I have never done this. I just ride out bear markets. I have a diversified portfolio of stocks. I must admit that some stocks I have do get into trouble in bear markets. There are always stocks in bear markets that cut or cancel dividends. However most keep them flat or increase them. I have noticed that my dividend growth slows down in bear markets. This is something you need to be mindful of Mark if your approach is with 100% dividend stocks (although I know you own a few ETFs).
The investment club run by Peter is the most interesting. One of the members is mostly into options and another is involved with building small condos. We visited one of the condos in Lindsay, Ontario. In that club we had presentations about hedge funds and Bitcoin. Interesting I’ll say!
To be honest, I’m not impressed with Exchange Traded Funds (ETFs) or index funds. A number of articles I’ve read, by economists, seem worried about the liquidity with ETFs in the next bear market. They worry about what might happen in the next (big) bear market because we have never had a bear market with so much passive investing. The next bear market is coming, I just don’t know when.
Any big plans for the future Susan?
Just keep doing what I’m doing – trying to stay active and lead a full day every day. I still blog at Investment Talk and I don’t see that changing. I enjoy it. It’s always nice to interact with investors.
Keep up the good work Mark!
Thanks again to Susan Brunner for making the time to share her updates on my site. What do you make of Susan’s choice to avoid ETFs, to avoid indexed funds? What do you make of her dividend stock holdings? What do you make of her advice to keep an active body and mind in retirement?