October 2010 Dividend Income Update

October 2010 Dividend Income Update

In last month’s dividend income update, I said the following:

“We might add more to our BNS position, maybe another $50 or $100 if we can but even if we don’t, I bet our dividend income will increase again – regardless of what Mr. Market does. I look forward to sharing that with you.”

Well, Mr. Market had a decent run until today, but regardless of how Mr. Market feels today we’re happy – because our stocks are paying dividends and our dividends are buying more stock. Our dividend income has moved up.

My post today reminds me what Tom Connolly has posted on his site, DividendGrowth.ca:

“First you have to know about dividend growth investing and understand how dividend growth builds wealth. Second you have to believe it works. Third you have to resist the temptation of ‘story’ stocks, to control your behaviour and finally you need the patience to execute the strategy (to wait for the value buy price, and then wait for the dividends to grow). Nothing spectacular will happen in the short term. Good luck.”

My portfolio doesn’t have what many DIY investors might consider the best of the best dividend-payers, but I think it’s a decent start. I’m working on it. It’s a journey, not a get rich scheme I remind myself. 

And, I won’t sell anything until I’ve been handed a very significant reason to do so – like a dividend cut.

Until the sky gets very dark, we’re going to enjoy our $4,200+ in dividend income this year, but only for a bit, because its quickly reinvested to buy more stock.

This year’s stars could be next year’s duds but in the end, dividends never lie (at least not for very long!!)

Companies can either to afford to pay their shareholders or they can’t. As long as my companies consistently pay, I think it pays to consistently own them. Overall, we just need to stick to the plan; buy and hold established companies that have a history of paying dividends.

Simple plan, extraordinary results over time.

Mark

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