How I built my dividend portfolio

How I built my dividend portfolio

Over the years subscribers have asked about my step-by-step approach to building (and maintaining) my dividend income portfolio. Well, today’s post is an update on that approach including how I built my dividend portfolio. 

How do I/we invest?

Long-time subscribers of this site will know I take a “hybrid approach” to investing.

What is that???

  • Approach #1 – we own a number of Canadian dividend paying stocks for income and growth. At last check, we own about 30 different Canadian stocks across our portfolio (Non-Registered, TFSAs, RRSPs). We own these stocks because we believe buying and holding our DIY bundle of Canadian dividend-paying stocks will, over time, provide some steady monthly income for future wants and needs in retirement.
  • Approach #2 – we own a few low-cost Exchange Traded Funds (ETFs) in our portfolio. While dividend paying stocks are great, including some in Canada, we believe in passive investing for lazy market-like returns. We also believe in investing beyond Canada’s borders. In doing so, we’ll add growth and diversification to our portfolio. 

As we approach semi-retirement we will update this post below.

You can read more why in this lessons learned in diversification post here. 

Lessons learned in diversification – reducing my Canadian home bias

Hybrid investing applies to our personal portfolio.

My wife will have a small defined contribution pension plan to drawdown as she gets older. I will have a small defined benefit pension plan to take in my 60s. 

The sum of our personal portfolio and smallish workplace pension plans will be part of our bucket approach to generating retirement income.

Our bucket approach to earning income in retirement

Why dividend investing?

Not everyone loves dividends like I do but that’s OK. Personal finance is personal.  

There are many reasons why I love dividend investing, as part of total investing return.

Here are just a few of them:

1. Dividends are easy to understand.

I invest, I stay invested, and I get paid for doing so. Pretty simple. Dividends paid is cold-hard-cash I see flowing into my account every month. It’s money that grows over time thanks to reinvested dividends and/or new dividend increases without buying any shares.

Dividend income will be real money we will use for living expenses, and it might continue to grow over time too. 

Look at this chart, a thing of beauty right?! 🙂

My Dividends March 2024

Reference: https://www.myownadvisor.ca/dividends/

2. Dividends can help fight inflation.

I believe as consumer prices rise, as the cost of living rises, the companies that deliver our products and services rise along with them. Many of companies I own have a habit of increasing their dividends over time given they are making more cash every year. Some companies are making so much cash they can afford to raise their dividend every year. Those are the companies I try to remain invested in.

3. Canadian dividend paying stocks are tax-efficient, to a point.

I tend to keep many of our lower-yielding, higher-growth Canadian dividend paying stocks inside our non-registered accounts. In a taxable account Canadian dividend paying stocks are eligible for a dividend tax credit from our government. This means taxation on dividends are favourable, it is a lower form of tax; lower than employment income and interest income.

Learn about the Canadian Dividend Tax Credit 101 here.

If the love of dividends is so strong, why index investing?

As much as I love dividends I know the financial future is always cloudy. 

Dividends while expected are never guaranteed. 

Nobody can predict the financial future with any accuracy. Besides, dividends are just part of an investor’s total return. A nice source:

Honest Math - Dividends

Source: HonestMath.

This is why for extra investing security and in hopes of long-term growth I use index funds in our portfolio.

There are a few reasons why indexing is a great way to invest, these key ones are important to me and they might apply to you as well:

1. With indexing I don’t have to worry about any dividend stock selection. Via indexing I can own hundreds or thousands of stocks from around the world for a few bucks per month in fees. That brings me to point #2.

2. Owning thousands of stocks via low-cost ETFs costs very little for the diversification and growth benefits they can provide.

3. Transparency rules. With a few clicks of a mouse, I can look up the holdings, cost structure, distribution information, tax information and long-term performance of my ETFs.

4. I ride market returns. Yup. Passive investing is a winner for long-term growth. History proves that!

For the foreseeable future, I/we will continue to use this two-pronged approach in our personal portfolio. So far, so good. 

Dividend investing, if executed well, has the potential to deliver meaningful, growing income.

Index investing delivers market-like returns. 

If you want to consider owning some dividend paying stocks for part of your portfolio like I do, here’s how I’ve gone about building my dividend portfolio over the years, key step-by-step, and how you can too…

Step #1 – Consider using dividend metrics

Passive dividend income is great but rising dividend income over time is even better. This means I don’t just blindly buy companies that pay dividends. I have used key screens and metrics to determine my portfolio holdings.  

Here are some popular ones:

1. Consider dividend growth and dividend history. I like companies that tend to grow their dividends every year. I also like companies that have paid dividends for decades or generations.

What stocks have paid dividends for generations?

You can also start your screen from Canadian and U.S. dividend champions or aristocrats.

iShares CDZ is a Canadian Dividend Aristocrats Index ETF. It holds Canadian companies that have increased their ordinary cash dividend every year for the last five years.

Typically, U.S. dividend aristocrats have increased their payouts to shareholders for the last 25 consecutive years. Give or take, there are usually 51 or 52 such U.S. companies in that list – which is updated every year. You can check out the U.S. ETF NOBL for the current list. 

2. Consider dividend payout ratio. I like companies that aren’t sacrificing all their cash to reward shareholders. I mean, share buybacks are good for shareholders too! There are lots of ways to create shareholder value. Therefore, for screening, companies that have a modest payout ratio are companies I tend to focus on.

3. Consider rising cash flow. I have an affinity to companies that grow their earnings and cash more over time. So, look for higher EPS and rising cash flow over time. 

4. Consider modest yield. I think this is one of the easiest metrics to use. This metric is a measure how much a company pays out in dividends as a percentage of its share price.

Calculation: Annual dividends / price per share = yield

Example: BCE annual dividends = $2.40 / $60 = 4%.

I think you want to own companies that have a low-to-modest yield.  

We prefer owning companies that yield between 3-5%.  

When it comes to higher yields – higher yields (anything over 6%) could be warning sign for trouble – they are a concern for me anyhow that the dividend is not sustainable.

Step #2 – Consider owning what the big fish own!

Beyond the screening metrics above, here’s the obvious: consider owning what the big mutual funds and ETFs own. 

Use some low-cost ETFs as a index skimmer. Meaning, if these stocks have been good enough for a multi-billion-dollar fund money manager for the last decade or more they might be suitable for you. This is essentially what I mean by skimming the index.

To skim the index, I use ETFs like XIU in particular for Canada although others will do!

Canadian dividend stock selection still made easy

Step #3 – Consider diversifying by sector

Again, the financial future is always unknown. So consider diversifying amongst your dividend paying stocks across various industry sectors, including Canada. 

Here is the sector breakdown of the TSX using iShares ETF XIC as an example – a proxy for the broad Canadian market – an image from the original post to align with what you might experience and see today form XIC:

XIC May 28, 2021

Image courtesy of iShares.

This means your Canadian DIY stock portfolio may include a few companies in each sector such as:

  • Financials – own banks (examples: Royal Bank, TD Bank) and life insurance companies (examples: Manulife, Sun Life) and more. 
  • Energy – consider owning companies like Suncor (SU) and Canadian Natural Resources (CNQ); energy distribution companies such as Enbridge (ENB) or TransCanada (TRP).
  • Materials – companies like Teck Resources might be consideration.
  • Industrials – hard to go wrong with railroads like Canadian Pacific Railway (CP), Canadian National Railway (CNR), and waste management with Waste Connections (WCN).
  • Consumer – think grocery chains by owning Empire (EMP.A), Loblaws (L), or go with Canadian Tire (CTC) or Dollarama (DOL) for growth. 
  • Telecom – consider owning some of the big 3 telcos: BCE (BCE), Telus (T), Rogers (RCI.B)
  • Utilities – I own Fortis (FTS), Emera (EMA) and Brookfield Renewable Partners (BEP.UN/BEPC).
  • Health Care – Canada is weak in this sector in terms of dividend stocks. So own low-cost ETFs for those. 
  • Technology – Canada is also weak in this sector so consider owning a low-cost ETF for that, like I own QQQ.
  • Real Estate – Consider CAR.UN (Canadian Apartment REIT) among others. 

You get the idea, consider owning the market leaders!

Full-on disclaimer alert! Such a list above could be your starting point for your investment research and portfolio considerations.  Even though I may own some of these companies above this list is not a recommendation for any purchase.  Your mileage may vary!

Here is the then-sector breakdown of the biggest 500 companies in the U.S. market, again, you can see how tech growth has really spiked from 2021 to today approaching 30%!

IVV ETF

Image courtesy of BlackRock.

The same principles to Canada can also apply to your U.S. stocks. You can consider owning the top holdings in each sector as part of the U.S. market (e.g., information technology, health care, consumer discretionary).

Although I own a handful of U.S. stocks at the time of this post (such as BlackRock (BLK)) I have a bias to owning more indexed ETFs over time for the U.S. market and international markets. 

In fact, years ago I am free to admit, I dabbled in and out of various ETFs including dividend ETFs but I have since calmed down and moved some money into tech-growth ETF QQQ. 

Then and Now – QQQ

Beyond QQQ, my main ETF is now XAW = a low-cost global ETF that invests specifically beyond Canada for lazy returns. 

Then and Now – XAW

I own my basket of Canadian stocks because I personally feel our Canadian market is very concentrated and dominated by a few companies – so it’s easier to own those stocks directly for income and growth. 

The U.S. market let alone the international markets are far more difficult to select stocks accordingly so you’re probably better off using low-cost ETFs for that. 

Why don’t you just own dividend ETFs?

With all this talk about individual stock selection and holding some indexed ETF products, then why don’t I just own dividend ETFs?  

Great question and I’ve answered this a few times on my site, most notably in this post.

To summarize here are the key reasons why I don’t own Canadian dividend ETFs at this time:

  • Some Canadian dividend ETFs have criteria I don’t fully agree with.
  • Most Canadian dividend ETFs have a modest fee, I prefer not to pay it.
  • I cannot control the stock weightings using a dividend ETF.

If you still want to consider some dividend ETFs, including those for the U.S. market, you can read about the top U.S. dividend ETFs for your portfolio here.

How do I/we rebalance my dividend portfolio?

Good question!

On the Canadian-side, I try and rebalance my portfolio by buying new Canadian assets that have been beaten up in price to realign with the sector breakdown of the TSX 60 or whatever iShares ETF XIU holds in various sector weights.

Mind you, I do this with a few caveats:

  1. While the TSX Index has had a long-term sector breakdown of many financials and energy stocks, I try and ensure no one sector has more than 30% weight. 
  2. I believe it’s best to own more telcos and utilities in my portfolio (than currently weighted in the ETF XIU) given the long-term / juicy dividend histories of those companies. Investing this way, I believe, will deliver some steady income in semi-retirement.

Looking at XIU as a proxy then to start your Canadian dividend portfolio guidance:

  • Consider owning <30-35% financials (think banks and life insurance companies).
    • I try and keep Canadian banks to < 30% of my overall portfolio actually, in the name of diversification.
  • Consider owning <20% energy (think Enbridge, Suncor, Canadian Natural Resources and a few more).
    • I do not own that much, including pipelines – energy makes up <20% of my portfolio. Again, striving for more diversification.

I also have a bias to low-volatility stocks in my portfolio so I tend to own more telecommunications and utilities than the TSX would weigh near the top right now. So, for those companies, I tend to own BCE, Telus, Emera, Fortis and a few other companies in greater weights than the current ETF XIU would as part of its top holdings. Again, I do that for juicy dividends AND lower-volatility. 

On the U.S.-accounts we have, I don’t worry about rebalancing my U.S. assets at all. Over time, I am simply buying more low-cost ETF units in the form of QQQ and XAW ETFs in our RRSPs specifically.

Finally, when it comes to portfolio management and rebalancing, I’ve learned to celebrate falling prices. I think you should too although I can appreciate this is unconventional thinking.

How I built my dividend portfolio summary

Before The Great Financial Crisis, I decided to ditch the mutual fund industry and begin my DIY investing journey including starting this blog.

I did this to keep more of my money and give less money away to any money manager.

Years ago, I switched from mutual funds to owning stocks and ETFs.

Our investing plan is rather simple:

  1. We own some dividend paying companies from Canada and a handful from the U.S., companies that reward investors through consistent dividend payments every month and quarter, most of them increase their dividends every year, and
  2. We own a few low-cost Exchange Traded Funds (ETFs) that provide meaningful growth and extra diversification.

In the end, I believe investors will be financially successful if they can do these things:

  1. keep a modest and consistent savings rate for decades,
  2. keep their money management fees low, and
  3. diversify their portfolio across sectors, companies and countries.

If you use indexed investing exclusively, awesome. 

If you want to own a few stocks along with indexed ETFs like I do for your investing success, this post should have helped you out. 🙂

Thanks for reading and I look forward to your comments as we continue our journey.

Got any questions about our long-term goals or investing approach?

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

55 Responses to "How I built my dividend portfolio"

  1. Great article, with lots of info.

    I would like to know more about the process of removing/replacing of a dividend investment holding that is in your portfolio. Or once it is in you hold forever waiting out a cycle from market conditions to improve?

    I think we touched on this before about there not being a magic formula and each company would be unique and require analysis to make a determination. Is there a rule of thumb about when to do that extra analysis? Maybe after each dividend payment, after company reports or news is released, drop in dividend payout etc….?

    Reply
    1. I appreciate that question. Let me ponder and consider a post about that. 🙂

      Generally speaking, I’ve sold a bit of stock when there has been a dividend cut (e.g., AQN) or I’ve sold out an entire holding because I felt there were better opportunities.

      See some examples and context but happy to consider more over time to make a fulsome post.

      https://www.myownadvisor.ca/when-should-you-sell-your-stocks/

      https://www.myownadvisor.ca/weekend-reading-dividends-can-get-cut-edition/

      https://www.myownadvisor.ca/then-and-now-johnson-johnson/

      Let me know your thoughts!
      Mark

      Reply
  2. Gus above mentioned that he is holding AQN as a Cdn. dividend stock. I’ve had a fairly strong position in AQN for several years and watched it slowly slide into the dumpster. A small fish in a big pond and as I recall you also held it. Do you still and do you see a rebound in the near future?

    Reply
    1. I still own a few hundred shares of AQN in my taxable account. Not worried long-term. They have assets people want.
      I sold (all) AQN inside the TFSA.

      Posted here:
      https://www.myownadvisor.ca/weekend-reading-dividends-can-get-cut-edition/

      I see a rebound for utilities in more general terms (FTS, EMA, CPX, AQN, BEPC, NPI, etc.) once rates start inching down later in 2024 or in 2025. Until then, minimal price growth IMO compared to other sectors but I could be wrong and be surprised. Oil and gas was a dud sector for years, now coming back to life. Everything has a cycle. The future is very cloudy!

      Mark

      Reply
  3. Technology – Canada is also weak in this sector so I own ETF QQQ for that reason. —-> Hmm beg to disagree XIT.TO was the best performing ETF in North America post pandemic but then that was TECH boom time. I think one can’t go wrong like CNR or CP if they go for CSU in tech sector (stock price is expansive but CAGR is bloody damn good for long term investor) OTEX.TO and ENGH also are not bad and both over reasonable Yield if not decent 🙂

    Reply
    1. I also own QQQ and have done so for years. Tech will come back, just don’t know when! I like QQQ for growth – never an income play!

      Smart words about CNR and CP. We need to move goods around the country last time I checked! 🙂
      Mark

      Reply
  4. HI!
    Thanks for this very interesting insight. building a portfolio is not easy, and it takes time to get that experience that is proper to make you win money. I’ve been investing for 20 years, it went up and down, but in the end my money is not sleeping on my bank account.
    It’s always a pleasure to read, keep up with the good work.
    Ander

    Reply
  5. Hi Mark,

    Wondering what your weighting of individual dividend paying stocks to index ETFs is in your portfolio? Your site is one of the few places I’ve found good info on this hybrid approach. Currently I hold mostly North American (2/3 Canadian) dividend growth stocks with a few sectoral ETFs. Planning to add VXC.TO to TFSA…just trying to figure out how much.

    Thanks,
    Lawrence

    Reply
  6. Thanks for sharing, Mark. The bulk of my investments is in dividend paying stocks and tech stock holdings. I love analysing companies which can be time consuming. If that wouldn’t be a hobby of mine, I would go for a lorge percentage of my investments into ETF. I like the funds of ARK Invest a lot and considering buying more. That’s the beauty of investing, that we can combine different approaches.
    Cheers

    Reply
    1. ARK is definitely getting a few eyeballs and dollars for AUM. I like the ability to combine approaches as well 🙂
      It’s not indexed ETFs or nothing.
      Mark

      Reply
  7. Hi Mark
    That was a great read, thanks for sharing your investment strategy and experiences.
    I am a dividend growth investor myself übut have also many non dividend paying tech stocks in my portfolio. It’s amazing how your portfolio has grown over the years. Very inspiring to see.
    Cheers

    Reply
    1. Awesome. Yes, mostly letting my time and time with investments just do their thing! Happy to own QQQ and other ETFs for my non-dividend paying stock investments. It’s not dividends or nothing in my portfolio. 🙂

      Cheers,
      Mark

      Reply
  8. There’s a ton of good info in this post, thanks so much for sharing your insight! I personally feel that investing for growth can be a much more effective use of capital but I definitely see where you’re coming from in terms of dividend investing being easier to track and more tangible (because you have money coming in every month usually). Excited to see your progress so far and will keep checking back to see how you’re progressing. Best of luck!

    Reply
    1. Thanks Karan. I do, since I try and convert CDN $$$ to USD $$$ for less like I wrote about in my post. I have done it for mostly stocks in the past but gravitating to owning more U.S. ETFs like VTI over time for the U.S. RRSP.

      I might buy some XAW in my CDN $$ RRSP going forward as well. No currency headaches and ex-Canada investing done cheap!

      I appreciate the readership!
      Mark

      Reply
  9. what a great post Mark !! Thank you 🙂
    reading it kind reassured me that I’m on the right path . as you know that I started my DIY investing after ditching my personal advisor with his 3% fees and went all in on a couch potato portfolio , I remember after selling my mutual funds i had about 250k in cash and i bought 5 etfs VAB VCN VUN VIU and VEE while i was on a coffee break at work on my phone 🙂 when i think about it i think i was crazy but it was the best thing i’ve done , and after discovering your site i even learned more about dividend investing and how it could help me getting closer to a comfortable retirement and specially how it could keep me calm whenever there’s a downturn in the market , seeing those dividends coming every months will make me ignore what’s happening to the share price because cheaper prices means more drips 🙂
    so yeah i started with a couch potato portfolio but now i’m in a hybrid mode 🙂 i own few canadian dividend stocks like TD RY CM BNS MFC FTS AQN TRP ENB BCE and T and planning on adding couple more , mind you i still have a good chunk in VCN because it covers couple of good stocks that i don’t own like SHOP and CNR and CP and now I’m 100% in equity after selling Vab .
    Your site has been an inspiration to me and many other readers for sure so thank you for doing what you do !!
    one more thing I hope in the near future the big banks will drop their trading fee charges , BMO invesrtorline is the first to start with that they have 80 etfs that you can buy free of commission now and I’m sure other banks will follow hope TD is next 🙂 I guess they’re feeling the heat from Questrade and Wealthsimple.

    Reply
  10. Hello, I’m in Canada as well. What brokerage would you recommend to use to purchase either low cost dividend paying etfs, or pick my own dividend stocks?

    Thanks

    Reply
  11. Hi Mark,
    Do you ever sell any stocks if your capital gains may be taking you over your % asset allocated to that one stock. Ie if you wanted a weighting of 5% but share price increases to the point that this particular stock is now 8% would you trim back to 5%?
    also, for your TFSA…. do you have a specific % you may hold in one particular stock ?

    Reply
    1. Nope 🙂 I buy and hold. I focus on keeping any one stock or ETF to less than <10% of portfolio weight across all our accounts. I think my highest right now might be 6% weight and I’m OK with that for now.

      I rebalance my portfolio by buying assets, not selling. I’ll touch on rebalancing a bit in my next dividend income update.

      I’ve modeled my Canadian stock portfolio after iShares XIU and XEI ETFs.

      Inside my TFSA I have a bias to holding more Canadian REITs. I have the same rule there, <10% for any one asset.

      Thanks for reading.

      Reply
      1. Hey Mark,

        This is a topic you and I have touched on in the past, so I’m curious about a couple of nuances to this discussion. As you know, I have a couple of holdings I’m severely overweight in, but I’m okay with it – for now. But, if I exclude those three stocks which are not dividend payers I still have some “leaders and laggards” across my TFSA, RSP and non-Reg accounts. What do you think about using my registered accounts, where I don’t have to sweat the capital gains to rebalance? I’m at the point where it would be really hard to invest enough new money to smooth out my weightings.

        Also I know some investors who just gauge their weighting by book value – thoughts?

        ~James

        Reply
        1. Hi James,

          Cannot offer direct advice of course, but I think if you’re every going to rebalance, likely taking a small cap gain or a small cap loss in a taxable account makes the most sense. This way, you’re not playing around with valuable, capped TFSA or RRSP contribution room. This is one strategy to consider of course.

          You could also, to your point, re-balance only in registered accounts (TFSA, RRSP). That might be wise if the re-balancing effort is very small.

          Ideally though, you want to consider all your accounts as one big portfolio. You would therefore re-balance by trimming winners and then buying laggards or sectors that are likely to bounce-back, aligned to your sector allocation. E.g., 10% REITs. Example, REITs fell below 5% in 2020, due to pandemic, so you starting buying REITs in 2020 – that would have been good for 2021 and going-forward and got your back to 10%.

          FWIW, I rebalance by adding new $$$ to the account/portfolio.
          https://www.myownadvisor.ca/reader-questions-how-do-you-rebalance-your-portfolio/

          Turn off dividend reinvesting, use the dividends to buy whatever is underweight is also a strategy. Lots of options James!

          Hope that helps share some ideas.
          Mark

          Reply
          1. It is very tempting to turn off the DRIP on some stocks and use that to expand my positions. I used to dread the idea of paying $9.99 for a trade fee instead of free DRIPing but that is small potatoes now. I will give this option serious consideration. As always, thanks for the input.

            James

            Reply
            1. Most welcome James and yes, the challenge is, rebalancing a DIY stock or ETF portfolio can get incur some costs unfortunately. So, another reason to keep a portfolio simple since there is less to tinker with.

              Reply
  12. Thanks Lee. Well, I feel like I messed up royally in my 20s with MFs. Ah well, live and learn.

    Now, it’s all about holding many Canadian blue chip stocks, a few U.S. stocks and then U.S. listed ETFs for extra diversification. I think we’ll keep our portfolio this way for many years to come, if anything, we’ll own more U.S. dividend ETFs for income – to use that income to withdraw from our RRSP – likely $10k each per year starting around age 50.

    Happy to get your questions and emails. Everyone learns from someone. Cheers.
    Mark

    Reply
  13. Nice post Mark! As you know I’m a pure dividend value investor. Here are my reasons for avoiding ETFs, and index funds:

    1. ETF/Index funds inadvertently buy overvalued stocks. I choose to only buy undervalued stocks.
    2. ETF/Index funds inadvertently buy lousy stocks. I choose to only buy stocks that satisfy my 12 rules of investing.
    3. You’re still paying fees. I chose to pay the lowest fees possible…..$9.99 per trade and I can hold the stock for 20 years 🙂
    4. Index funds buy non-dividend stocks. I only buy dividend stocks (one exception: BRK.B)

    Reply
    1. Great to hear from you. I hope all is well?

      Undervalued stocks are a bit subjective – otherwise – you wouldn’t have to have your own criteria 🙂 That said, I know what you mean, fund managers are usually forced into buying and selling. They are paid to do it!
      https://www.myownadvisor.ca/in-defense-of-active-investing/

      The other thing I totally agree with you on though is fees. But, if you are going to own ETFs, own low-cost ones and ones that are diversified.

      BRK.B is practically an index fund 🙂

      Reply
      1. Great article again Mark. I’ve tried ETF in the past but as soon as I understand and know how to analyze a company, it became a habit and love doing it. The other thing that put me off as well is MER.

        Moving forward I might consolidate my positions keeping a few quality ones. Also, I still would not discount getting back on ETF if I am tired picking individual stock.

        Reply
        1. Ya, I figure about 20-25 CDN stocks is a sweet spot for me and a few U.S. ones as well. Everything else will be indexed for simplicity. My returns seem to prove my strategy is working. That’s all that matters! Nice to hear from you Rommel!

          Reply
  14. Another good article Mark. But don’t be afraid to step on a few toes. Rather than just say own a few of each I’d add in Bold, AVOID CYCLICALS!!!! I don’t say one can’t make money investing in cyclicals, but the topic was Dividends (I prefer the word Income) and most cyclicals don’t fall into my category of being ones with good dividend histories. Most cut their dividend as soon as their price drops.

    Reply
    1. LOL. Well, I do own SU. I’ve learned to avoid most of them cannew, thanks to reading about the experiences of you and many other successful dividend investors.

      Reply
  15. Cool article Mark. You have covered where to look for dividend payers, and what you use to review individual companies. I would be curious to read an individual stock analysis on your part. And also review your portfolio holdings, when you are comfortable to share with us 😉

    Reply
    1. I’m getting more comfortable with time as you can see 🙂 I will eventually disclose my holdings I think but if you read often enough and dig enough, I suspect you’ll find out with some accuracy what I own. Just not how much but again, readers can do some math on that – I can’t make it easy for people!

      Reply
  16. Hi Mark,

    in the dividends chart, does that include all your accounts? TFSA, RRSP, Non-reg? Wondering becuase if you plan on retiring early with $30k dividends a year there may be tax issues with RRSP accounts.

    Reply
    1. My focus is on TFSA and non-reg. accounts = $30k in dividend income per year every year. Once we hit that mark, we’ll start drawing down our RRSPs. Our RRSPs are not included since we intend to draw down those accounts prior to any pension plans from work. What tax issues do you mean? Any RRSP withdrawals will count as income and we’re hoping we withdraw our RRSP funds when our income is the lowest possible.

      Reply
  17. Looking back on our investing journey I see that we did what you are basically doing. Albeit not in such a planned out way. We started with MFs and about 16(ish) years ago started investing in individual companies moving way from MFs. Now the only funds we have are the TD e-series to complement our stocks and park small amounts of cash that is not DRIPped. We do have DB pensions so that comes into play big time.

    About the only thing I’d mention (and I know you already know this Mark) is that there will be corrections along the way so extrapolating what has happened in the past is not likely what will happen in the future. Be prepared for, if not setbacks then at least stagnation of dividends. There was a period where there were not a lot of dividend increases and in fact several decreases were announced combined with a substantial drop in share prices. It can be scary for those not prepared.

    Reply
    1. Upon re-reading the article I see you did mention the potential market and dividend fluctuations. Don’t know how I missed that on the first read. Or maybe I did read it and just forgot by the time I got to the end. 🙂

      Reply
    2. We also have pensions but those cannot be touched without MAJOR penalties until age 65 for me. That’s another generation away 🙂

      Your point about stagnation might come true. I’m not always counting on dividend increases, although if they happen they will certainly accelerate our financial wealth. I’m prepared for stocks to drop 30%. In fact, I expect it at some point like 2008-2009. I hope I have money to invest when that happens and I will do my best to stay the course. Buy, hold and stay invested. Thanks Lloyd.

      Reply
      1. 2008/2009 was 50% drop !!

        Who knows when the shoe will drop next and how heavily?

        I will also do my best to stay the course.

        Good overview for dividend and indexing investment junkies.

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          1. I use the delusional thinking that if the “value” of our portfolio were to fall by (insert percentage here), we’d still have more than what we originally put in.

            (I did say it was delusional)

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        1. RBull: Many were 50%, especially banks, but some like FTS and ENB were 20%-30%. Regardless, I was fortunate to buy, though most were not at the low. Still I got a real boost to my total income.

          Reply
          1. Good for you Cannew.

            We’re speaking about the overall market and not individual stocks. Some were more than 50% and some were less of course. I was also fortunate to be in the buying stage of my investment path so had some benefit, as I expect many on here were too.

            In any case the market overall came back within a few years, and those that held on were rewarded, whether through dividends or capital growth.

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