The markets are moody, especially after the earnings season.
This is a reminder that investing in stocks isn’t like buying a GIC at 5%. There will be ups and downs with various events impacting businesses in different ways.
For income investors, the rise in interest rates has really impacted many holdings. It’s frustrating, you don’t know where it’s going to stop dropping, and emotions can take over. Know why you invested in the first place! Go back to the basics before making a decision.
For income investors not retired, the sting must really sting. Recoving a lost in Telus might take time even if you DRIP the dividends. A 6% yield is great for income but not necessarily for long term growth. It would take 12 years to double your money with 6% alone. Don’t hide behind the “I get paid to wait” saying, it’s a cop out.
This is the biggest mindshift you can make when investing is to understand how much you want to work? Ask yourself what it would take to double your money, and one year is an unrealistic answer by the way, but as you think between 6% return to 10% return, you go from 12 years to 7 years to double your money.
The 5 years is still a big number. You might be able to retire at 55 instead of 60, or it’s the opposite, another 5 years and you can retire with a better outcome.
If you are retired, the markets are giving you gifts! Imagine being able to improve your yield from 4% to 6%.
As a last note, remember that yield on cost is meaningless. I used to be ok with the drops since I would buy more, and while it can work with some companies, it does work the magic of dividends with some other stocks.
Stock Trades
In our spousal RRSP, I sold all Telus in USD and purchased Broadcom.
That’s a new investment in my portfolio. The reality is that everything needs a computer chip or data processing. While I have Texas Instrument, I see AVGO as a stronger investment.
Am I too late with Broadcom? I don’t believe so. In fact, it’s early days before the robots take over :)
In my RRSP, I purchased Google from the left over cash of disposing BlackRock.
In the taxable account where I hold a few Canadian bank stocks, I added to Telus from the dividend earned over the last quarter. Why Telus since I just sold? It’s beaten down even further and that account is currently set up to pay dividends while providing some growth. It’s an account between income and growth which is where the banks fit nicely.
Portfolio Management
Diversification is not really a concern these days for me. Even cyclical stocks aren’t something I focus on either. In fact
Dividend Income
My July 2023 dividend income is $2,464.
Here is what my dividend income has been and how I forecast future dividend income. 20.86% is the average dividend growth since 2010.
The dividend growth includes both new money, DRIP shares, and the dividend growth by the companies.
If you want high income, check out the corp account. This retirement account has a yield of 2.17%.
| 2010 | $3,785.87 | ||
| 2011 | $4,742.99 | $957.12 | 25.28% |
| 2012 | $5,650.70 | $907.71 | 19.14% |
| 2013 | $6,270.04 | $619.33 | 10.96% |
| 2014 | $8,108.62 | $1,838.59 | 29.32% |
| 2015 | $10,415.40 | $2,306.78 | 28.45% |
| 2016 | $12,460.67 | $2,045.27 | 19.64% |
| 2017 | $15,475.60 | $3,014.93 | 24.20% |
| 2018 | $18,757.22 | $3,281.62 | 21.21% |
| 2019 | $23,305.32 | $4,548.10 | 24.25% |
| 2020 | $28,285.82 | $4,980.50 | 21.37% |
| 2021 | $26,034.41 | -$2,251.41 | -7.96% |
| 2022 | $32,763.15 | $6,728.74 | 25.85% |
| 2023 | $39,596.62 | $6,833.47 | 20.86% |
| 2024 | $48,458.62 | $8,862.00 | 20.86% |
| 2025 | $59,304.00 | $10,845.38 | 20.86% |
| 2026 | $72,576.65 | $13,272.65 | 20.86% |
| 2027 | $88,819.81 | $16,243.16 | 20.86% |
| 2028 | $108,698.31 | $19,878.50 | 20.86% |