mercredi 9 décembre 2020

Dividends and maturity

I don't understand why some people write about how dividends make them happy. 

For me, it's not important at all. I never invest on a stock based on the fact that it comes with a dividend or not. Actually, if the dividend is high, it's a warning sign for me. I probably won't buy a stock for which the dividend is higher than 3%. There may be an exception or two, but for 99% of stocks, a high dividend indicates that growth prospects are limited. 

To me, someone putting too much emphasis on the importance of dividends shows that he's not yet mature as an investor. Just like me in 2008 when I bought Yellow Pages only for the high dividend yield (another embarrassing confidence for those who discovered my blog recently). 

Sorry if I'm hurting a lot of these people who like dividends. But that's how I feel. I'm such an honest guy. 

6 commentaires:

  1. Réponses
    1. The key point about dividend stocks is not high the dividend is, but how much the dividend grows over's called 'Yield on cost',that%20stock%20would%20be%207.5%25.

      44 percent of all the money I have made over the last 12 years in the market have been from my dividends.

  2. Dividend stocks are generally "safe" stocks. If I had $2 million I'd be satisfied with a line-up of Canadian dividend stocks. You're also likely to get some capital appreciation over time. If I had a well-paying job that I didn't hate I also wouldn't mind being invested in dividend stocks.

  3. I like the ad under your post for the best dividend stocks

  4. I like the ad under your post for the best dividend stocks

  5. It has been a long time since I visited your blog and I quite enjoyed my visit this evening.

    To offer another viewpoint, I lost over 70% of my investments to names like Nobilis, Concordia, Convalo/BLVD/VCAN, and Kelso. Very hard lessons to learn let me tell you.

    In 2019 at 52 years of age both of my parents passed within three months. There was a modest inheritance and I vowed not to squander it.

    Today I am about 70% in blue chip divvy stocks, and loosely track the BTSX strategy. The other 30% is essentially two venture stocks that I believed in and one is a four bagger as of today. Eventually they will both be sold for dividend payers also.

    Because the inheritance arrived in tranches in 2020 I experienced an initial dramatic loss but then was able to buy a lot of stock at some good discounts. I was also able to pay off debt and start anew and borrowed back a lot to buy in May-September. I had a good year.

    My real point though, is that I want to retire in 6-7 years. I cannot afford another Concordia or Nobilis. By my calculations, with DRIP investing and some more buying I’ll be able to generate about $60,000 in dividends annually. When added to CPP and my wife’s modest pension we will enjoy a somewhat early retirement with a reasonable lifestyle after downsizing our home.

    If I were younger I’d try a bit harder to reach for the stars but I’m not and I wanted to offer a scenario where dividends make sense.

    I enjoy your blog quite a bit. I’m glad I found it again,
    All the best!