Thursday, October 9, 2008

The Good, The Bad and The Ugly

The ugly is the current financial problems. The bad is that we will get hit by them. We are going to have a recession. The good is we will do better than most and much better than the US this time. The other good is that 4 of my stocks raised their dividend payments in September. These stocks were Manulife Financial, Pembina Pipelines, Russel Metals, and Saputo.

You really have to be well positioned going into a volatile market, such as we have. By and large, I have solid dividend paying stock and I stick with them. How am I doing? If you look at total market value, I am way down. If you look at dividend income, I am up. Two of my bank stocks, Royal Bank and Bank of Montreal, have not yet increased their dividends this year. I have not seen anything to suggest they intend to do this. They have had annual increases for quite some time. The other two banks I follow, the TD Bank (which I have) and the Bank of Nova Scotia (which I do not have) have raised their dividend this year.

If your portfolio is well set-up, as mine is; you will survive this market quite nicely. I do not expect this to be easy or worry free, but I will, in the end do quite well. No one knows how long it will take for the market to recover. If you have sold stock into this market, or cannot hold off selling, then there is nothing anyone can do to help you. It is only the ones who are not forced to sell or who do not sell, in this sort of market that survives well.

I mostly live off my investments, so I never have invested money I need currently. I always have money, together with expected dividends, to last 3 to 5 years. I have also try for the 4%, 8% solution. I try to make an 8% average annual return on my investments and I try only to spend an average of 4% of my portfolio each year. The implication of this is that I have an extra 4% to spend every year.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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