By now, most investors are settling in the reality of the markets we are in. Some industries are performing and others aren’t. Oil prices are what they are and not changing much even with the OPEC talks. As you probably know, some of the best investments are the boring ones since they have consistency. Take the Canadian Banks, for example, most of them increased their dividends amid the lackluster performance of the oil industries. Another hint, many of those companies have subscriptions like payment and something we need.
Boring tends to work and it pays over time. Compound growth will also work its magic if you let it ride. Unlike the US Dividend Aristocrats which offers a list of companies with 25 years of increasing dividends, not many Canadian dividend paying companies exhibit the consistency of dividend increases. 5 years of dividend increases are not enough to offer consistency, unfortunately. It’s not even long enough to include an economic downturn.
In February, my dividend income was $995.41. It sort of sounds the same when I write it every month but it reminds me that my strategy works. In tougher times like we are seeing with the Canadian markets, it also reminds me that I have made the right decision. There are no regrets and no second thoughts on my investing decision. The only challenge I have is to save more so I can invest more.
I am holding on to 2 stocks that reduced their dividends. As I have talked about in separate posts, I am not included to sell on a dividend drop. If I wasn’t happy holding the stock, I would have dropped it on earlier signs as there usually are some. However, I will admit that I need to look at the opportunity cost to see if another holding can provide the same income and growth. I would generally stay within the sector but it can be an opportunity to balance.
So far, I have been able to re-invest $41,223 in dividend income over the past 5 years. I have put all of that money back to work. The reason I share my dividend income is to show what you can earn with dividend investing in order to retire with that income or in order to grow a portfolio. Since I am not near retirement, all of it is re-invested to generate compound growth.
You can see how I have adjusted my exposure to US dividend paying stocks below and how well my dividend is growing. I will admit that it is much easier to invest in strong US companies than in the Canadian markets. It’s a bigger economy and many have a really strong history of growing their dividends. When you put it all together, you get a strong Dividend Growth Portfolio.
Since I took over my portfolio from a financial advisor back in 2008, I have learned a lot with respect to building a portfolio and selecting dividend stocks. Back in 2009, I started organizing my research and that’s when the Dividend Performance List was born and refined over the years to provide me with the information I needed to make investment decisions.
Unfortunately, we can’t just put all of our money in one basket and we can’t just put it in one sector either. That’s where portfolio management comes in and the investing landscape changes regularly. Just look at the currency exchange rate with the US dollars. It stops many from investing in US dividend stocks.
It may seem complicated but you need to take it one step at a time and strategically identify your investing rules.
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.