Weekend Reading – More dividends and 2023 Predictions edition
Welcome to a new Weekend Reading edition – highlighting some more dividend increases in my portfolio and sharing some bold 2023 predictions too!
As usual, before we dive into that subject a bit more, some recent reads on my site to share:
I shared my long-term love for Telus stock here, as part of my portfolio, including index-beating returns over the last 10+ years.
We hope to realize these long-term income needs and wants brick-by-brick; by accomplishing all these 2023 financial goals here.
Weekend Reading – More dividends and 2023 Predictions edition
Well, dividends aren’t everything of course but dividends are part of some important investor total returns and I’m a fan of them for my/our ever growing income.
See chart, very real!
Despite the odd dividend cut (that’s part of the risk you might take in investing with individual stocks!) I’ve already received two more dividend increases this year that more than make up for any recent cut based on what we own:
- Canadian National Railway (CNR) increased their dividend by 8%. (The railway company reported fourth quarter revenues of $4.54 billion, an increase of $789 million or 21%.)
- BlackRock (BLK) increased their dividend by 2.5% including a massive share buyback plan; the Board of Directors also authorized the repurchase of an additional 7 million shares under the Company’s existing share repurchase program for a total of up to approximately 7.9 million shares of BlackRock common stock.
Rising dividends are great, but not magical, unless they keep growing more and more!!
A great reference: HonestMath.com
Weekend Reading – More dividends and 2023 Predictions edition
In terms of predictions, something I used to post about quite a bit years ago for fun, I made a few on Canadian Money Forum recently.
Here are my very bold predictions for the year ahead that might include some sort of mild-recession (?):
Note: I have the question mark above related to a mild 2023 recession since certainly there are few stock market signs of that happening…but…at the time of this post, my Canadian proxy for top-stock returns is the low-cost ETF XIU. XIU is up about 6% year to date already! You should also know I won this contest in 2021 🙂
Any thoughts on where you believe 2023 will end up?
This is what BlackRock mentioned in their 2023 Global Outlook I highlighted here including the stocks and sectors to own in 2023!
More Weekend Reading…
Thanks very much to Melissa at Our Life Financial (who is killing it with her higher dividend income BTW) who posted this kind review of her direct experience with us at Cashflows & Portfolios – our low-cost retirement projections service.
I/we appreciated her honest take!!
Kanwal Sarai, passionate DIY investor and podcaster interviewed Henry Mah recently.
They covered some of their passionate topics such as:
- How Henry got started in dividend investing
- Why Henry loves key stocks vs. ETFs
- Why Henry is not a fan of bonds!
- What impact the Great Financial Crisis had on his income stream
- Why and why should in their view – almost anyone can and should learn about dividend growth investing…
- and more!
MoneySense offered a take on inflation and investments for retirees, and to be mindful of what some folks or bloggers post online which may or may not apply to you:
“How to invest your TFSA or RRSP can also be affected by your views on inflation. On Twitter, there is a community of financial bloggers who often reveal their personal TFSA portfolios, which tend to be mostly high-yielding Canadian dividend-paying stocks. In some cases, their TFSA portfolios are spinning out as much as $1,000 a month in tax-free income.”
That said, my journey is VERY real as Jon Chevreau knows and supports 🙂
So are others…
$2,061 $BNS & $2,412 $CM monster dividend day. Just start. It builds #dividends #invest #Passivelncome #StockMarket @DreamDividend @DividendGrowth @HeroDividend @DividendDandy @StockTrades_CA @TheDividendGoat @myownadvisor @Tawcan @msfinancialfit @DarthDividend23 @TheDividendGuy pic.twitter.com/KW5CKQybeT
— Dividend John (@johnyboy1853) January 27, 2023
And from Bob Lai…some incredible saving and investing work in 2022! From Bob:
“The 25 pay cheques added up to $3,581.01. Receiving over $3,500 in dividend income was a nice way to wrap up the year.”
Although designed for a U.S. audience, I enjoyed this deep-dive “bucket approach” discussion with Fritz and Karsten in the post entitled:
Discussing Retirement Bucket Strategies with Fritz Gilbert – SWR Series Part 55
You can go down a HUGE rabbit hole with Karsten in the other 54 posts!
Maybe the punchline of the SWR series Part 55 post:
“The truth is liberating, so please repeat after me…
… A balanced stock/bond portfolio, regularly rebalanced, would have withstood all the past market volatility, including the Great Depression of the 1930s and the Great Inflation of the 1970s/80s, and will likely survive whatever the future will bring.
There you go; with those 37 words, you can explain to the client that the simple SAA is really all you need. Maybe add a few charts and tables to enforce the massage.”
This is what Fritz encourages you to consider, give or take:
- Cash: 3 Years (10%)
- Bonds: 6 Years (20%)
- Stocks: 21 Years (70%)
- Total: 30 Years (100%)
This is my plan when I work a bit part-time in semi-retirement, keeping a small “cash wedge” in Bucket 1 that means at least 1-years’ worth in cash savings (but I don’t put a fixed asset % to it):
What say you???
Last but not least, Dale Roberts took his CPP benefit as early as possible. Bird in hand! Not a bad decision but more to consider that just taking the money and run…
When is the best time to take CPP?
Getting retirement (CPP) money is a strange but good feeling. Can't believe how fast the decades tick away.
— CutTheCrapInvesting (@67Dodge) January 27, 2023
Stay tuned for an epic, long, detailed, expert post next week about taxation and investing inside a corporation. I know many of you have been emailing me about some more details beyond these two posts below, and I’m happy to publish more on that topic soon.
In case you missed these ones:
My content is always free. Read, enjoy, share or disagree too! 😉
Have a great weekend!
January has been a pretty good month for us in regard to dividend increases in our taxable portfolio.
RCH (15.4%), MRU (10%) and CN (8%). All dividend increases beat Canada’s one year inflation rate according to the Bank Of Canada calculator.
Only disappointment was CU at only 1%. Still hanging on ……for now, but won’t be adding to it this year.
One company in the industrial sector which I have my eye on is ALC. Special dividend of $1.35 per share announced Dec 14, 2022 and then on Jan 13, 2023 the company announces a dividend increase of 6%. All this on a present dividend yield of over 4%. Haven’t bought it yet, but once I need to add to the industrial sector, this may be my choice.
Nice, those are good growers (beyond CU) but ha, I own some AQN as well! 🙂
I assume you own some CNQ and maybe a smaller player like WCP? Both could have a big year!
“I assume you own some CNQ and maybe a smaller player like WCP?”
I have to go back to 2014-2015 to answer that question. Mark.
If you can get past the paid screen at globeinvestor, Norman Rothery gives an idea of what it was like then, from his recent article, “How to turn sour stocks into sweet returns for a Lemonade portfolio”.
“The portfolio’s heavy exposure to resource stocks is one reason for the wild swings. That’s something that hurt it when energy prices tumbled in 2014, and the portfolio gave up 39 per cent by the time it bottomed in early 2016. The market index was relatively unscathed during the period and only corrected by 14 per cent from its earlier highs.”
So yes, I did own some energy producers with dividend growth around that time. Waterfurnace Renewable Energy got bought out by Swedish firm NIBE, and Talisman Energy was taken over by Repsol in 2014. Ensign Energy Services (ESI) doesn’t even pay a dividend anymore. Canadian Energy Services has since been renamed to CES Energy Solutions (CEU). Another one I had high hopes for was Akita Drilling (AKT.a) and then one other I bought in May 2015 and sold in Dec of that year was CNQ you mentioned above. Perhaps my one and only regret of the lot of them.
Perhaps you can see now why I tend to shy away from the producers.
In the energy sector I’ve just stuck with the pipelines through all kinds of markets and that goes back to 2003 when I first bought Trans Canada Corp in the non-registered account.
Thanks. I have a subscription to the Globe – I like Norm’s stuff…
That’s the thing with energy producers, very cyclical, right?
The toll roads/pipelines seem to be more steady in terms of income and capital gains.
2003 for TRP is going back a bit! Well done 🙂
Almost retired courtesy of compounding , Tom Connolly, David Stanley and the gentlemen who took over for David at BTSX in the ensuing years. Excellent site Mark I enjoy the read weekly.
Love it! Congrats on your success and thanks for the kind words 🙂
Hi Mark: The insurance policy was bought by my dad when I was born. It was a $1000.00. When my brother was born he got one also. When he was 24 he used it to help pay for the first house he built. I didn’t need it so over the years it has just built up. the principal is paid and there has been over $6000.00 of interest and dividends added so it is now over $7000.00 and growing. Like I said a small one but may bury me in the future. Mark people don’t live forever and when the time comes loved ones sometime have a hard time to find things. This is where planning comes in. I have a list entitled ‘ Where to Find It” at the front of one of my books. This will help in locating objects i.e. wills, stocks, keys, accounts, etc. When my dad passed all his stocks were recorded in his book but he would buy one stock then another and another and then maybe more of the first one so as you can see it was a Hodge podge to figure out so I thought why not make it easier. My book in Waterhouse is the same but my book for the stocks at home are individually on the same page. I asked my neighbor to make me an excel spreadsheet of capital gains and losses which she did and all is marked in order with the ACB so anyone in the future can add in the sold price and the capital gain or loss and then add up the total. It will make it easier.
Excellent stuff. Very smart on the planning side!
Hi Mark: There have been quite a few companies raise their dividends and I expect BCE and TRP to announce raises in March for April. I find dividend increases magical as the more a company raises its dividend the price of the company increases and over time it gets so high that the directors decide to split the shares. This does no good that year but in the years following when the dividend is raised now you have twice as many shares. The power of compounding. I took my pensions at 60 because some people do die in their 60’s and I thought that small that it is I might as well have it as long as I can. No buckets here Mark, just one big one spread out. Money at home, in the credit union, Waterhouse, RRIF, TFSA and a small insurance policy. Most of what I have is non registered. I’ll be looking forward to your posts on taxation as even with over $46,000.00 in dividend tax credits I still get dinged hard. My brother say’s I shouldn’t mind paying taxes but when you see how the government use it it makes you wonder. You have heard the stories of the office clerk who retired and when she finally passed was found to be worth millions. That’s me. I worked as a mail boy, general clerk and white print operator. Laid off at 43 I just kept investing. I now find myself in the 33% bracket thanks to Justin. I sometime think that I am paying overtime for my grandfather who never paid taxes. Income taxes started in the ’30’s as a war measures act and they thought it was so good they kept it, but my grandfather never paid and the government as a result didn’t realize that he existed. He got cash for most things and when he died he was worth $70,000.00 which might not seem like a lot today but in 1970 was a lot. I know because I started the CGE in ’69 and made $60.00/ week and took home $48.00. Being single there are not to many deductions I can declare.
That seems very reasonable…given your cashflow: “Money at home, in the credit union, Waterhouse, RRIF, TFSA and a small insurance policy.”
Yes, I figure with part-time work we’ll want to be strategic with our capital gains over time from our non-reg. I will keep you and others posted via the site. I’ll have a dividend income update to share for Jan. 2023 in a few short weeks.
“I now find myself in the 33% bracket thanks to Justin.” Yes, compounding has done wonders for your portfolio 🙂 A good thing.
Thank you Mark for this great post!
I love those raises !!!
I also got two of them 8% from CNR and 10% from MRU got love it hope we’ll here more from other companies ,I’ve watched the interview with Henry and I’ve enjoyed it of course I’ve read his books and learned a lot from it, I also follow dividend John on twitter and love his dividends updates and I hand it to him the comfort he have in putting all his money in only 10 companies same goes to Henry 12 only I guess you got to have an extreme conviction but still for me I’m not that brave.
I’m still waiting to update us on your purchases in your tfsas for 2023 unless you wanna keep us anxiously waiting 🙂
Yes, I failed to mention MRU but don’t own it yet! Kudos if you have that one. They’ve been doing very well over the last 10-years. Up triple in price!
I like Henry’s approach but I don’t think I could go “all in” on just 12 stocks and John’s seems a bit risky to me with mostly banks and financials in Canada. I hope to share my 2023 TFSA purchases soon! I went very boring!
Have a great weekend Gus.
I love these newsletters!!!
Thanks very much!