Divys

RYAN By Guest Blogger Ryan Lewenza

Upon completing my business degree from the illustrious University of Windsor (I joke but it actually had a decent business school), I packed up my 1987 Honda Prelude and moved up to the Big Smoke to begin my career in finance. After a few embarrassing setbacks (one job I interviewed for turned out to be a scam as instead of leading “exciting marketing strategies in the sports and entertainment industry” it actually involved selling two-for-one restaurant coupons door to door…definitely the low point in my early career), I was able to get a job working the phones in the fast-growing discount brokerage industry.

This was 1999 just months before the 2000 stock market peak and the ensuing tech crash. Like many others I got caught up in the mania and made some of my first stock investments in companies like Enron and WorldCom. Maybe you’ve heard of these beauties before. Well we know how that story ended (and my trading account at the time), and it was my first important investment lesson – don’t get caught up in the hype and mania of the time and don’t take high-quality companies that pay a consistent dividend for granted. Today I discuss why dividend-paying stocks are a must-have for long-term investors so hopefully you can avoid the hard lessons I’ve had to learn.

Let’s take a step back and discuss what dividends are and where they come from. Some entrepreneur comes up with a great new product or service and goes into business. The new product/service takes off with the business growing rapidly. At first any profits are plowed back into the business to fund even more growth in the business (e.g., adding new staff or building a new factory). As the business matures and it’s growing steadily it doesn’t require as much investment. Management and the board at this point might implement a new dividend policy. Over time, as the company continues to prosper, it increases the dividend paid to shareholders, effectively starting to pay investors back for initially investing in them through the IPO. So the dividends are a function of the underlying earnings stream. If there’s no earnings, generally there’s no dividend.

While dividend-paying stocks are not very sexy and are unlikely to make you a hit at your next dinner party, they sure do provide tasty returns for long-term investors. Below is a chart showing the impact of dividends on total returns, and in particular, the reinvesting of dividends. If an investor invested $100,000 in the S&P/TSX in 1988 and only received the price returns of the TSX, the investor today would have $510,870. Not bad but a fraction of the $1,142,935 the investor would have if they received and reinvested all the dividends back into additional units of the TSX. In fact, a 124% higher return due to the dividends and the compounding of those dividends. This clearly shows the impact of dividends and compounding returns.

Returns on $100,000 Invested in the S&P/TSX

Source: Bloomberg, Turner Investments

Now you just don’t want to focus on the highest dividend-yielding stocks, in fact, you generally want to avoid these like the plague. When investing in dividend stocks you want to focus your attention on the best dividend growing stocks. These are those companies that consistently increase their dividend year in and year out like the banks, pipelines and telcos. Why is that? If the company is consistently increasing the dividend then it generally means the company is steadily growing and management has confidence in the outlook of the business so it can justify increasing its dividend. Management knows that dividend cuts can torpedo the stock price so they generally are only increasing the dividend if they have confidence in their business and earnings outlook.

RBC did some great analysis a few years ago looking at different categories of stocks and their respective returns. For example, they examined the performance of “dividend growers” (companies that consistently grew dividends), “dividend payers” (those that paid a dividend but didn’t increase them), “dividend cutters” (self-explanatory) and “non-payers”. They found that the “dividend growers” provided the highest total returns of 11.7% annually, versus “dividend payers” at 9.9%, “dividend cutters” at 2% and “non-payers” at 1.3%.

Annual Total Returns from 1986 to 2016

Source: RBC Capital Markets

But it gets even better! Not only did dividend growing stocks in the TSX provide the best returns they also displayed the lowest volatility across the different categories. When looking at volatility or standard deviation of prices they found “dividend growers” had the lowest standard deviation of 13% versus the TSX at 16% and dividend cutters at 25%, for example.

So dividend growing stocks offer higher historical rates of return and with lower volatility – that’s the equivalent of a free lunch in investing!

Over and above the good returns from dividend stocks there are other factors that contribute to their attractiveness. These include:

  • With our aging population and more and more boomers going into retirement, they will require income from their investments to fund their retirement spending needs. This could result in more investor demand for dividend-paying stocks and potentially higher prices over time.
  • Related to that is the very low interest rate environment we’re in. With bond yields near historical lows this adds to the attractiveness of dividend stocks. Below I illustrate by this comparing the dividend yield of the TSX to the Government of Canada 10-year yield. Currently the TSX yield is 3% versus the GoC 10-year yield at 1.77%.
  • Dividends can help to keep up with inflation as dividends rise with inflation (since earnings would continue to rise with inflation). Dividends can provide a hedge on inflation!
  • Lastly is the preferential tax treatment of dividends, which are taxed at a lower rate than interest and other income. For example, an Ontario resident earning $75,000/year would pay a 8.92% tax rate on dividends and 31.48% on interest income.

TSX Dividend Yield vs GOC 10-year Yield (%)

Source: Bloomberg, Turner Investments

In summary we love dividend-paying stocks and it’s why they are an important part of client portfolios. Every one of our current equity ETF holdings in client portfolios pay a dividend and in fact we’ve been increasing exposure to dividend growers since that’s where you get the best bang for your buck. Like Tom Cruise said in Jerry Maguire: “show me the money!”

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

102 comments ↓

#1 Derek R on 04.13.19 at 12:26 pm

Yes, dividends are always nice to have. And the more often the better!

#2 mrnick on 04.13.19 at 12:40 pm

Thanks for the great post Doug. Quick questions- Is there a free source available for getting the aggregate dividend yield of TSX that you have shown in the graph? This information is more readily available for the US indices, but not for TSX.

Thanks mucho!

#3 yvrmc on 04.13.19 at 12:47 pm

Thanks Ryan , a good lesson explained so that simple investors like myself , easily understand .

#4 mikeywhy16 on 04.13.19 at 1:01 pm

Great post Ryan, I wouldn’t expect anything less from a fellow Windsor Grad. I also think your Barzal rookies are about to get a boost when he sends Sid the Kid packing this week.

#5 crowdedelevatorfartz on 04.13.19 at 1:04 pm

Informative and easy to understand.

Another “hit” in the weekend blog parade.
Thanks Ryan.

#6 Penny Henny on 04.13.19 at 1:05 pm

#60 crowdedelevatorfartz on 04.12.19 at 10:06 pm
@#30 Penniless Harridan

Yeah Penny.
The entire province should move…….

Let me ‘splain it to you in a language you can unnastan.

U…. R…. an EEE DEEE YOTTT.

/////////////////

Garth are you going to let this go unpunished?
He just called me the ‘E’ word

#7 The Real Mark on 04.13.19 at 1:11 pm

Sure, dividend payers/growers have done a lot better. Particularly as most of the dividend payers/growers have been in sectors that exhibit positive correlation to long-term bond prices, ie: the financial sector, utilities, etc., for which cash flows have been very healthy and the cost of finance has progressively fallen.

The (obvious) problem with the TSX index is that it has a lot of components which are traditionally inversely correlated to long-term interest rates. The gold mining sector, for example. For which the past 40 years of falling rates have been deadly to their businesses. It logically follows as the cycle turns, many of these investments, severely un-loved and out of favour, might look favourable again.

That’s not to say that crappily-managed companies will magically become un-crappily managed. So the non-dividend payers definitely, as a rule, will not become magically the outperformers. But the sort of companies capable of long-term dividend growth is likely to change in a long-term rising interest rate environment.

It logically follows that the sector winners of the past 30-40 years, may very well be the sector losers of the next 30-40 years. And a dividend growth strategy, to beat the TSX, may very well have to look to sectors for which the past 30-40 years has provided only despair.

Of course, as we’ve seen with the contemporary TSX, stocks that are positively correlated to long-term bond prices have severely outperformed those with inverse correlation. The banks and insurers, which absolutely thrive on low rates and an excess of “financialism” have grown to be 40% of the index. Meanwhile the inverse sectors such as O&G, mining, railways, etc., have shrunk. Some fancy M&A at companies like Enbridge and CN have masked this somewhat, but the financials/insurers having a commanding and overwhelming index concentration and dividend production was not always the historic norm.

#8 NoName on 04.13.19 at 1:11 pm

Interesting read

https://www.psychologytoday.com/ca/blog/urban-survival/201501/commuting-the-stress-doesnt-pay

only wrong-ish/outdated part part here is this: “In contrast, driving requires constant concentration and can result in increased boredom, social isolation, and stress.”

Adaptive cruise control, lane departure and collision avoidance fix that for me.

#9 crowdedelevatorfartz on 04.13.19 at 1:16 pm

@#86 Lorne
“So, it is the 1 cent increase in the carbon tax that is the major problem, not the 20+ cents the corporations have raised their price??’

++++
That 1% increase on top of all the other levys and taxes lumped into Lower Brainland gas prices…
Plus the “privledge’ of Govt monopoly car insurance so that we can sit, gridlocked, on Lower Brainland streets, bridges and tunnels.
Aprox $0.52 / liter is tax in Vancouver ….

https://vancouversun.com/news/local-news/dont-expect-a-break-on-provincial-gas-taxes-says-premier

And they still cant balance a budget.
Awesome.
10 poo flinging monkeys in a boardroom hurling scat at a board labelled with fiscal options could accomplish more in an hour than all the politicians in BC….

#10 Tom on 04.13.19 at 1:20 pm

Dividends all the way!!!! (First???)

#11 Rick on 04.13.19 at 1:23 pm

First! Oh yeah!

#12 Dogman01 on 04.13.19 at 1:35 pm

Yep – just finishing my taxes and the Dividends are treated very gently.

Even my Preferred ETF’s look a little better at tax time.

#13 TurnerNation on 04.13.19 at 1:51 pm

No kando going Uppa here

https://www.thestar.com/news/gta/2019/04/12/step-condos-joins-growing-list-of-cancelled-toronto-projects.html

The Step condos near Islington and Finch W. Aves. has become the latest Toronto-area pre-construction project to be cancelled, three years after the developer put the six-storey building plans on the market.

#14 CharlieDontSurf on 04.13.19 at 1:54 pm

Great post. Thanks Ryan.

#15 Sold Out on 04.13.19 at 1:55 pm

Thanks for explaining dividends in language that a noobie such as myself can comprehend, yet not feel like a financial moron, even though I may well be.

#16 Shawn Allen on 04.13.19 at 2:07 pm

This article is consistent with Warren Buffett’s advice.

If you want to get to the top of “mount wealth”, maybe jump on a slow moving trolley that is sure to get there eventually as opposed to looking to ride up there on a rocket that might crash and burn.

#17 AGuyInVancouver on 04.13.19 at 2:32 pm

#9 crowdedelevatorfartz on 04.13.19 at 1:16 pm

That 1% increase on top of all the other levys and taxes lumped into Lower Brainland gas prices…
Plus the “privledge’ of Govt monopoly car insurance so that we can sit, gridlocked, on Lower Brainland streets, bridges and tunnels.
Aprox $0.52 / liter is tax in Vancouver ….

https://vancouversun.com/news/local-news/dont-expect-a-break-on-provincial-gas-taxes-says-premier

And they still cant balance a budget.
Awesome.
10 poo flinging monkeys in a boardroom hurling scat at a board labelled with fiscal options could accomplish more in an hour than all the politicians in BC….
_ _ _
What are you talking about?

The BC NDP have delivered two balanced budgets despite having to bail out two crown corps that suffered through BC Liberal mismanagement: ICBC and BC Hydro. This isn’t Doug Ford’s debt-riddled Ontario.

#18 dawnt on 04.13.19 at 2:56 pm

one more thing on Dividends ;

if you have no other income you can earn up to $50k dividends a year tax free …. 100k for a couple .

#19 Dividend kid on 04.13.19 at 3:10 pm

Hey Ryan, just turned 19, so many years to go, it’s all about the dividends, but stocks or ETFs? I know garth preaches etf’s only but I want max return on my investments over next 41 years till I’m 60. What’s gonna pay me more divys…. stocks or ETFs? Please let Ryan answer garth! Go leafs!!!!

#20 tccontrarian on 04.13.19 at 3:15 pm

Divies are great, but sometimes come at a cost (if bought at high prices). I have heard many say “I don’t care about the share price going lower – I bought ABC for the dividend”.
The thing is, if company pays a 5% dividend, but its shares lose 20% in value, well then investors are out -15%! Pretending it doesn’t matter is fallacious (people don’t want to admit being wrong – how about that, eh!)

Personally, I view the dividend component as the ‘icing on the cake’ – while capital appreciation being THE cake. One key reason I was aggressive in buying Energy stocks a few weeks/months ago was the fact that many were paying a decent dividend while offering an opportunity for amazing capital gains as well.

Case in point:

Cardinal Energy (CJ) – Dividend=3.5%; P/E = 7.0
Ensign Energy Services (ESI)- Dividend=8%; P/E=16.2

Even ETFs offer similar opportunities

-TUR (Turkey) is currently offering up an amazing opportunity (in my opinion):
Dividend=4.5%; P/E=8.1
So, a nice divie with a reasonable potential for a 25-50% gain with a bit of mean-reversion.

Sometimes you can actually “have your cake AND eat it” as well! You just have to be paying attention.

TCC

#21 CEW9 on 04.13.19 at 3:33 pm

#19 Dividend kid on 04.13.19 at 3:10 pm

Hey Ryan, just turned 19, so many years to go, it’s all about the dividends, but stocks or ETFs? I know garth preaches etf’s only but I want max return on my investments over next 41 years till I’m 60.

Pursuing dividends is not the focus of the article – didn’t you read the part where Ryan said the highest paying dividends are not the best?? Generally higher paying dividends=more risk. A company that has growing dividends can indicate less risk.

The other big take-away is that dividends should be re-invested. TSX performance without re-investing was about half that of with dividends re-invested. So if you are starting out I would say to make sure to sign up with a DRIP program.

As an answer to your question, if you are 19 and don’t have a financial advisor picking stocks for you on a million dollar portfolio, picking stocks is way too risky for you. Buy ETF’s. There are even dividend-specific ETF’s.

If you can take this all in without getting defensive, and try to learn from other people’s mistakes and not buy individual stocks when you are setting out.

Ryan said his mistakes were Enron and WorldCom. Mine was Tahera Diamond Corp. What a waste.

Learn from us.

#22 Ryan Lewenza on 04.13.19 at 3:59 pm

mrnick “Thanks for the great post Doug. Quick questions- Is there a free source available for getting the aggregate dividend yield of TSX that you have shown in the graph? This information is more readily available for the US indices, but not for TSX.”

It is difficult to access info on the TSX so it’s always easiest just to pull the info from ETFs that track the TSX. So google XIC which is iShares ETF that tracks the TSX. The link is below and you can view the different stats for XIC. – Ryan L

https://www.blackrock.com/ca/individual/en/products/239837/ishares-sptsx-capped-composite-index-etf

#23 Ryan Lewenza on 04.13.19 at 4:04 pm

Dividend Kid “Hey Ryan, just turned 19, so many years to go, it’s all about the dividends, but stocks or ETFs? I know garth preaches etf’s only but I want max return on my investments over next 41 years till I’m 60. What’s gonna pay me more divys…. stocks or ETFs? Please let Ryan answer garth! Go leafs!!!!”

Even though your 19 we still want you buying ETFs. You can get broad exposure to dividend paying stocks that pay a similar dividend yield to the underlying stocks. For example, you can buy individual banks paying 4% or an ETF that holds a number of banks also paying 4%. So why not go the diversified way instead of investing in just one bank. Go Raps!!!- Ryan L

#24 down and Out on 04.13.19 at 4:13 pm

No Lewenza from Windsor would be caught dead in a Honda (oh the shame)

#25 Unhinged Trader on 04.13.19 at 4:26 pm

Always enjoy an Influenza post.

#26 LP on 04.13.19 at 4:38 pm

#21 CEW9 on 04.13.19 at 3:33 pm

My mistake, and first foray in the market, was Eli Ecologic. I still can’t understand why that one didn’t take off!

And Ryan, as to your first Toronto gig selling door-to-door, Smoking Man would tell you that is what separates the men from the boys (or the women from the girls, to be PC).

The only job I would personally be ashamed of was yours on the phones. Some *^%# fool called me at 6:45am today about “fraud on my Visa”, he said. When I asked him to hold on while I put him on speaker so the police officer could hear him, he hung up.

#27 Sold Out on 04.13.19 at 4:38 pm

#8 No Name

A little off topic, but something that must be factored into one’s choice of home base. I was fortunate to be able to ride a bike to work for a good chunk of my working life. I believe that cycling played an important role in my ability to retire at 51. My insistence on living within riding distance of my employment led us to buy a home in a more desirable area close to Vancouver proper, I didn’t waste money on newer cars and fuel, and most of all the mental and physical benefits of regular exercise helped me avoid a fatal road rage incident, and popping a major blood vessel. Sold the house at the peak, loaded bike on moving truck and got the hell out. Of course, all of that would’ve been for naught if I had been crushed to death by a dump truck, but like a cockroach, I survived the worst that ICE drivers could throw at me ;)

#28 crowdedelevatorfartz on 04.13.19 at 4:42 pm

@#6 A Penny for your thoughts is too expensive

“He just called me the ‘E’ word”

+++++
Guilty as charged .
And you accuse me of whining….

#29 crowdedelevatorfartz on 04.13.19 at 4:49 pm

@ #17 A guy in Vanburger

“The BC NDP have delivered two balanced budgets despite having to bail out two crown corps …”

++++
By raising user fees, car insurance rates, and taxes….back we go to the beginning of the arguement….

God forbid ANY govt sell the cashcow that is ICBC.
Because we all know the govt is so much more efficient than the private sector….
But then again these BC govt agencies are never to confident to “go it alone”….
I guess thats why SNC Lavalin has their expensive billable hour claws in BC Hydro, BC Ferries and Highways?

#30 DON on 04.13.19 at 5:16 pm

Thanks Ryan. Very informative with a punch.

#31 Deplorable Dude on 04.13.19 at 5:38 pm

#20 Ccontarian….”The thing is, if company pays a 5% dividend, but its shares lose 20% in value, well then investors are out -15%! Pretending it doesn’t matter is fallacious (people don’t want to admit being wrong – how about that, eh!)”

Only if you sell into the loss…otherwise just ride it out…which is what I’ve just done. As Buffett says…buy quality stocks and hold forever…..short term market jitters is just noise.

I’d hate to have to sell stock in a loss to generate income which is what many folks would have to do.

As it is I’m currently yielding 4.8% on dividends….regardless of share price. And that will increase every year with dividend increases.

I’m a big believer in the Tom Connolly dividend growth method. Quality companies with long history of dividend increases. Diversify across non cyclic industries, Banks, utilities, telcos, etc….

Last year I took a -6% hit to my portfolio value….but….i got a 15% total dividend increase across the 15 companies I hold.

YTD 2019….Portfolio is up 13%….before dividends….so assuming no major correction this year i will be a very happy bunny.

The thing I really like about dividend growth method is the regular known (and increasing) income….don’t have to sell anything…and I can ignore the market.

I think a lot of folks don’t appreciate the long term effect of dividend growth. A good example is BNS. If you brought that in 1990 and held…you are now yielding almost 100% !

#32 TurnerNation on 04.13.19 at 5:46 pm

Cars..who will buy the Boomers’ toys?
Millennials.. do not drive. Carbon taxes, and street racing laws – an impound and 10k fine for simply spinning a tire.

This is worth 10k at best to someone in the 30s.

https://www.autotrader.ca/ico/dodge/charger/arnprior/ontario/19_10585426_/

NEW PRICE $21500.00 dollars
REDUCED BY $9500.00 dollars
-Appraised for 30,000 dollars-
1974 Dodge Charger 340 cu inch

#33 will on 04.13.19 at 7:10 pm

Yes. And now as I get closer and closer to the “loooong weekend” (ie retirement) I track not just my increase in portfolio value but my increase in dividend income.

#34 acdel on 04.13.19 at 7:11 pm

Great Blog today Ryan; young folks; you have just been given very good free advice!

#35 Andy Milokanis Fan on 04.13.19 at 7:15 pm

Upon completing my business degree from the illustrious University of Windsor (I joke but it actually had a decent business school),

————————————
You were sure lucky that you didn’t enroll in Rotman, Ted Rogers School of Management or Schulich these days. This is what you would expect on campus these days, harassment of those viewed as non-conformists to Justin Castro’s status quo:

https://www.youtube.com/watch?v=XxY-5ISEHPg

GTA Campuses are SJW incubators with an agenda to enrich Bill Morneau and his cronies such as the Bronfman family, Saputo conglomerate, Thompson-Reuters and many other wealthy elites.

It took a brave family called the Ford Nation to have stopped the Liberals in their tracks.

God Bless you Rob Ford and Doug Ford for revealing the gravy train and Liberal corruption.

#36 acdel on 04.13.19 at 7:41 pm

Off topic, do not post if you do not wish to. Just returned from a extended period out of province so I am not caught up; but I feel that all Canadians should read this. This is why so many are angry about regarding the carbon tax. I have nothing more to say about it; if it has been posted in a previous blog then just ignore it; if not, read it, do not respond back to me, make your own judgement.

https://nationalpost.com/opinion/rex-murphy-apocalypse-in-aisle-3-climate-change-comes-to-your-grocery-store#comments-area

#37 TurnerNation on 04.13.19 at 7:56 pm

#15 IHCTD9’s 8.1l V8…is larger than many condos.
But that noise at full throttle: RREEE-reee?
It’s that sound millennials make while signaling virtue to the Climate God.

You know those millennials I know: always using their apps to order food for pick up or delivery, it comes swaddled in layers of excess take-away packaging.

Or awaiting their latest Amazon small purchase, a cardboard box flown or trucked in from who knows were, and full of excess packaging.

Sipping their thrice daily SBUX non-recyclable wax lined coffee cup to be trashed. Add a bottle of water or two.

Or ordering their weed shipped in and with excess packaging:
https://www.cbc.ca/news/canada/new-brunswick/cannabis-packaging-excess-1.4870682

Burn baby burn. Drill baby drill

#38 Nonplused on 04.13.19 at 8:08 pm

This is off topic but there really isn’t too much to comment on Ryan’s post today. I’m sure it needs saying but it is without controversy.

Scott Adams in episode 490 of “Coffee with Scott Adams” perhaps just nailed the immigration debate. Well, Trump did it, but Scott explains how he did it.

Trump has floated the idea of transporting illegal (note only illegal) immigrants to “sanctuary cities”. Well why not? Wouldn’t that be the best place for them, out of the reach of ICE? The democrats briefly responded by saying “you can’t dump them in our communities”, before they disappeared from camera. This has totally shaken the box.

A few things happened:

– democrats by using the word “dump” equated illegal immigrants to garbage.
– democrats accidentally admitted there are limits to how many illegal immigrants they want in their communities.
– democrats admitted they are a lot more generous about how they want other communities to accept illegals than they are generous themselves.

Trump wins again. How can San Francisco accept a million illegal immigrants a year when they already have a humanitarian homelessness crisis on their hands? But yet the logic that the illegals belong in a sanctuary city where the authorities refuse to cooperate with ICE are compelling. If the illegals go to Billings Montana they will be deported.

I don’t even understand the whole debate. As a Canadian citizen I have traveled to the US many times, mostly to work. I have always been allowed entrance, never got turned back once. But I had to fill out all the paper work, comply with all the laws, get the visas, file my taxes, and exit as agreed. So it kind of boils my blood that if you are coming from the south the expectation is that you can just walk right in. It is an illegal act. If you want to go, fine, but check in with customs and border security.

Also, all Canadians have a vested interest in Trump building the wall. There is no reason the illegals in the US couldn’t just keep walking north.

And no, I am not opposed to immigration. I am opposed to illegal immigration. You can’t just walk up here and apply for welfare. It doesn’t work that way. We can hardly tend to our own.

#39 NoName on 04.13.19 at 8:10 pm

#27 Sold Out on 04.13.19 at 4:38 pm
#8 No Name

A little off topic, but something that must be factored into one’s choice of home base. I was fortunate to be able to ride a bike to work for a good chunk of my working life. I believe that cycling played an important role in my ability to retire at 51. My insistence on living within riding distance of my employment led us to buy a home in a more desirable area close to Vancouver proper, I didn’t waste money on newer cars and fuel, and most of all the mental and physical benefits of regular exercise helped me avoid a fatal road rage incident, and popping a major blood vessel. Sold the house at the peak, loaded bike on moving truck and got the hell out. Of course, all of that would’ve been for naught if I had been crushed to death by a dump truck, but like a cockroach, I survived the worst that ICE drivers could throw at me ;)

Don’t know what you did for living, but it looks like everything worked out very well for you, i am happy for you.

Now that we are on bike topic, few weeks ago i was going to work on a Lakeshore and somewhere around Appleby in a distance i sow dude on a bike, few moments later realized that i am not caching up with him check my speed ok, and i just speed up to see was it Lance.

Anyway next read light i catch up with bike dude and i noticed what he did small engine above front wheel and chain drive, but what is interesting how he did a muffler that thing was very silent, just small hum. All home made by the looks of it.

Bonus video, im thinking Dolce Vida is bycicle dude…

https://youtu.be/DuPi7bJhavM

#40 Nonplused on 04.13.19 at 8:17 pm

#35 & #36

Carbon taxes are not environmental policy, they are revenue policy. The government has figured out that if taxes are too high you will stop buying cigarettes and booze, they can even make you quit work if the income taxes are too high, but you can’t stop eating or heating your house.

Carbon taxes are nothing more than a big “greenwashed” hike in the HST. Only with more bureaucracy. It’s for your own good, they say, but it isn’t. They already have umpteen different taxes on a liter of gas before it goes in your tanks, this is just one more. Anyone who fell for it should realize they just failed a very simple IQ test.

#41 Keith in Rio on 04.13.19 at 8:30 pm

So we’ve got this election in Alberta on Tuesday.

Seems that there are a couple of extremely popular candidates running for office, judging from the hundreds of lawn signs.

FOR RENT and FOR SALE………

#42 joblo on 04.13.19 at 8:32 pm

What’s the deal with dividends on dual class shares?

#43 will on 04.13.19 at 8:38 pm

Ryan, which index would be the appropriate one for a dividend investor to use to compare performance? The s&p tsx is becoming less and less useful to me as my dividend investing takes center place over investing for capital gains…

#44 Remembrancer on 04.13.19 at 8:44 pm

#32 TurnerNation on 04.13.19 at 5:46 pm
Cars..who will buy the Boomers’ toys?
Millennials.. do not drive. Carbon taxes, and street racing laws – an impound and 10k fine for simply spinning a tire.

This is worth 10k at best to someone in the 30s.

https://www.autotrader.ca/ico/dodge/charger/arnprior/ontario/19_10585426_/

NEW PRICE $21500.00 dollars
REDUCED BY $9500.00 dollars
-Appraised for 30,000 dollars-
1974 Dodge Charger 340 cu inch
————————————–
Dude relax, its a ’74 340 automatic (was there even a 340 package in ’74?), a $9500 price drop from a paid for appraisal isn’t the fall of the Roman f’ing Empire…

#45 Deplorable dude on 04.13.19 at 8:59 pm

One key point for dividend growth strategy is picking stocks with a long term record of increasing dividends, at least 10 years.

As Ryan noted, with this method annualized return is nearly 12%.

Any dividend etfs that have a decade long record is dividend increases?

#46 Remembrancer on 04.13.19 at 9:16 pm

#35 Andy Milokanis Fan on 04.13.19 at 7:15 pm

Sure vilify those educated “elites”. You must love the highly uneducated too…

#47 AACI Home-Dog on 04.13.19 at 9:38 pm

Most Excellent !
Thank you, Mr. Lewenza.

#48 The Real Mark on 04.13.19 at 10:06 pm

“#45 Deplorable dude on 04.13.19 at 8:59 pm
One key point for dividend growth strategy is picking stocks with a long term record of increasing dividends, at least 10 years. “

The problem with Ryan’s number for dividend outperformance is that it is retrospective index. Its not exactly something that can be used on a go-forward basis (see my earlier comments). Of course companies that paid dividends and grew their businesses, in the past, have been the most successful. The problem is identifying such on a go-forward basis, and investing accordingly.

The best Canadian dividend performers of the past 30-40 years have largely been financials. There are limits on the ability of the financials (and pseudo-financials, such as Crappy Tyre, and others) to be outperformers in the future.

The TSX’s underperformance relative to the dividend indices, or the S&P500 can largely be explained by the concentration of inversely correlated components which have been “dead money” in the index over the past few decades. Unless you’re particularly adept at identifying and timing investing in those sectors, sticking to a broad index like the TSX is probably a better idea than chasing a specific dividend strategy based on retrospective data which most certainly would see you over-exposed to financials, and underweight countercyclical components.

#49 Smoking Man on 04.13.19 at 10:18 pm

Markets going to rock till the end of Trumps presidancy.
Your good till 2024

#50 ImGonnaBeSick on 04.13.19 at 10:33 pm

If you’re looking for a list of Aristocrat Dividend payers – ie. companies that have increased their dividends consecutively for at least 5 years, just look at the holdings in CDZ.

Do your due diligence using that as your starting point. You’ll find all the best CDN divvy companies in there…

CNR, ENB, EMA, CU TD, RY, BNS, TRP, FTS, CTC.A, etc.

Or just buy CDZ, the yield is 4% +/-

#51 dukesowinsa on 04.13.19 at 10:43 pm

“University of Windsor (I joke but it actually had a decent business school)….”

Didn’t the nickname used to be, Last Chance U…..better than no chance

#52 acdel on 04.13.19 at 11:06 pm

#48 The Real Mark

Interesting points you make; respected, but one does not need to over analyze it; Buffet made his riches by making it simple. Invest in good growth companies; in products that every human needs from day to day and voila the rest is history.

You bring many valid points but perhaps from time to time you need to get out of your head and just go with the flow.

I am just a simple hard working dude and truly appreciate that one man is allowing us to spew our insecurities and he has the patients to answer and repeatedly allow us to vent and answer our questions, ok, delete a few of mine due to a much needed scotch muscle relaxer..

I get it, we all learn as much from each other as Garth and his guest do from us; let us keep it civil (meaning all of us). Where else can one get this type of education for free?? Bon nuit!

#53 The Great Gordonski on 04.14.19 at 12:08 am

Gong gong gong, preaching to the choir . In fact the divvies payers have acted more like growth stocks along with collapsing rates due to competition for yield from retail punters and institutions. Now that most companies are buying back their stocks as part of normal course issuer programs the competition for equity has increased and these value plays have morphed into garp , increasing in price without a loss of yield, literally the best of both worlds. And, many companies are ratcheting up yields to attract capital, yum. My portfolio of 57 issues is 99% dividend pays. It provides a steady free cash flow to buy more of whatever I’m buying, which includes pure growth. Cash comes in and gets put right back to work. Having just a small percent of super performer growth stocks can increase overall performance by double digits, particularly when your superstars are multi-baggers, like THI that turned into QSR and ran from $14 to $95 and is still galloping along on global unit expansion.

#54 YVRTechGuy on 04.14.19 at 12:10 am

Thanks Ryan – another great post as always.

There’s a couple other metrics I consider when investing for dividends that the Hoi Polloi down here in steerage might consider…

– Payout Ratio – should rarely be above 50% for common stocks, or 60% for utilities
– Credit rating – I know a dividend-stock is not a bond but where a dividend-payer is also a bond issuer then you can check a companies credit rating with one of the major rating agencies (S&P/DBRS/Moodys), I like to keep it above BBB.

#55 Smoking Man on 04.14.19 at 1:23 am

DELETED

#56 Smoking Man on 04.14.19 at 1:38 am

Hey T2, Should have picked me over butts.

https://www.youtube.com/watch?v=DE3JoFUkxPQ

#57 NoName on 04.14.19 at 1:50 am

this is MUST read

https://www.washingtonpost.com/business/how-china-turned-350-million-millennials-into-day-traders/2019/04/11/c007d8ba-5cad-11e9-98d4-844088d135f2_story.html?utm_term=.658b29651c06

and bonus read, norevgions are out their ^%$#@!* minds electric planes…

https://electrek.co/2019/04/11/norway-60-electric-airplanes/

i was thinking but wifi would approve of it…
https://japantoday.com/category/national/Japan%27s-working-population-drops-further

SM, FLOP, DV, FF, SNOWBOLID, TRACTOR FARTZ i love you all bastiges, and thos that my limited cognative abilities (at this momement) cant recall, tcc contrarian you look like $#!7 disturber

i can spel but its just not fun, sometimes wife read coments i am in trrouble next the morning…

Good Night
https://www.youtube.com/watch?v=CD-E-LDc384

#58 NoName on 04.14.19 at 1:51 am

should read would not approve it

#59 NoName on 04.14.19 at 1:57 am

we are dog people here, but when someone negleck cat its not cool, very uncool actualy.

For seven years, Julian Assange took refuge in a small office that was converted into a bedroom in Ecuador’s embassy in an upmarket neighbourhood of central London, where he lived with his cat, James.

It is unclear what has happened to James. His own Instagram account has not offered any clues, with the last picture posted in 2017.

Reports suggest he was given to a shelter by the Ecuadorean embassy some time ago while Italian newspaper La Repubblica said last year Assange had himself freed him.

https://www.bbc.com/news/world-latin-america-47907600

#60 Where's The Money Greed-Morneau? on 04.14.19 at 2:17 am

Re: #80 crowdedelevatorfartz on 04.13.19 at 9:05 am
@#73 Friday Humour

Unbelievable.

A drug smuggler for decades who has been caught with tonnes of drug shipments and released several times.
And he freely admits being an informant for the police while working for the Hell’s Angels….and he’s still alive?
+++++++++++++++++++++++++++
I guess it should be obvious, canada is gang central and they’re ALL on tghe take, cops, politicians, banks, et al taking us common citizens for fools and walking away rich.
He has been on the inside for a long time. Right from the start.
They don’t let people go unless they’re on the inside.
Just look at that freighter that Paul Martin owned (but had an international flag, whoopee) that was caught with tonnes and tonnes of coke on it back when he was, I think, Finance Minister.
Nothing came of it, not even a word on what happened to the coke afterwards.
The US has to stop them in their waters cuz they know they are scott free once they get to Canadastan, just like bad guys are coming in here by the truckload as “refugees”.
The HA are the mules for the Chinese Triads that had full access to the White House when Clinton was Prez. Everything done through charities (just look at the money paid into Trudeau’s / Clinton’s Foundations) and the Rockerfeller Foundation that is supposedly being used to backstop a war on Canadian oil.
All that other stuff like gas prices are distractions from the big money moves.
Banana Republic run by crooks for crooks. Get out while you can!!!!

#61 NoName on 04.14.19 at 2:18 am

Hey blacksheep this one is for you i love you to
https://www.youtube.com/watch?v=Plm0-RV5IOU

good night

#62 Dolce Vita on 04.14.19 at 3:59 am

#39 NoName

Crazy video, only in Italia (I thought it was funny). I think staged and revenge of the cyclists*. Looks like an Autostrada, in general bicycles are forbidden on those in Italia and for good, practical reasons.

Have a bicycle but I am an avowed pedestrian (no car). Italia not like Canada where you have to drive everywhere for the distances.

Train, planes and corriera are all you need in this compact country to get around (exactly 3 Italia’s fit into 1 BC area wise). It makes sense here.

Driving from Edmonton to YVR gets you from the extreme North of Italia to its extreme Southern “heel”, Otranto, and then some to give you an idea of its compactness.

—————————————————

*I think made for YVR cycling people and their ilk. Cycling well accepted in Europe and you do not have the confrontations as you have in YVR et. al. between cyclists and drivers.

In fact, in Amsterdam the cars yield to the cyclists. In my home town in the NE of Italia, there are no “bike trails” or Nazi inspired painted roads etc. to delineate what is whose (pretty funny to me). Pedestrians and cyclists get along just fine on the same sidewalk. The latter the same on a road with vehicles other than on an Autostrada.

Italia the same then again, we have the concept of a PIAZZA for pedestrians (and cyclists), fresh food markets everywhere, nearby and in general, the “StupidStore” big box concept is shunned.

Within a 15 min. leisurely walk I have everything I need, including the train station to take me to airports or at 360 kph to Milan, Rome, Firenze, Napoli…you name it.

Ciao d’Italia.

#63 The Great Gordonski on 04.14.19 at 4:48 am

It came to my attention today that one of Canadas most revered financial columnists will write an article related to the inclusion of Canopy Marijuana into the TSX 60 replacing Goldcorp.

As you know, every investor must disclose ownership of marijuana stocks in their portfolio when asked at the US Border Security checkpoint. If you do you may be banned from entering. It is fact that working for a marijuana company even peripherally will get you banned.

The question now is ” Is the TSX 60 now a marijuana stock that must be disclosed”.

Good luck to any owners. I would never buy it, but if you do, you must ask yourself if you’re prepared to lie to the border guard. Trudeau and Goodale counselled you to not disclose if asked and instead return to Canada. But if you have been removed, will you be allowed back in. I wouldn’t base a business decision on Trudeau’s misshapen prognostications, will you risk it?

#64 Where's The Money Greed-Morn-eau? on 04.14.19 at 5:09 am

This is the best comment I heard about the $12 million that Loblaws and Galen Weston got from McKenna and the putrid Fed. Liberals, taken from a National Post commenter on this largesse given to Weston for new fridges for his stores while he’s fighting CRA about a $400 million tax hit for setting up a bank with Galen as its only customer (FRAUD!!!), and subsequently writing off almost $500 million in taxes owed. It’s perfect:
https://nationalpost.com/opinion/rex-murphy-apocalypse-in-aisle-3-climate-change-comes-to-your-grocery-store#comments-area
Donald Bruce Smith
7 hours ago
A hypothetical conversation that never happened.

Loblaws executive #2 – speaking to Loblaws executive #1

Boss, I just got the memo that the Trudeau Liberals are giving us $12 million to retrofit our 307 refrigeration units.

Loblaws executive #1; I heard that as well, and this is going to work out well for us because we have already budgeted this cost and have allocated $48 million over the next 3 years in our capital budget..

Loblaws executive #2; What are we going to do with the $12 million from the Liberals.

Loblaws executive #1; Well you recall that court ruling that said we avoided over $400 million in taxes by moving the money to offshore accounts.

Loblaws executive #2; Yes I do, but what does that have to do with the $12 million?

Loblaws executive #1; simple, we will use the $12 million from the Liberal government, to fight the Liberal government in court, so we can keep our $400 million plus dollars.

Loblaws executive #1; Excellent, by the way, are you going to that $1,500 a plate Liberal fundraiser that is being put on by SNC-Lavalin. « less

#65 BillyBob on 04.14.19 at 5:45 am

Darn.

I only checked in today to see what the “50 YEARS OF MAPLE LEAF INCOMPETENCE” guy had to say about the Raptors game.

It’s like Happy Housing Crash guy, disappears when their best material is at hand! :-)

#66 Evangeline on 04.14.19 at 6:06 am

“#47 AACI Home-Dog on 04.13.19 at 9:38 pm
Most Excellent !
Thank you, Mr. Lewenza”

Ditto!

A topic I’d like to see covered: should the client and the investment manager share the same political views?

#67 Figure it Out on 04.14.19 at 6:56 am

There’s five banks that count in Canada.

Buy the one with the highest dividend. Every year, if it doesn’t have the highest dividend, sell it and buy the one that does. This adds basis points to your returns, but you will have to pay capital gains taxes.

Or buy a different one every year until you’ve got all five, and once a year, use the accumulated dividends and any extra savings to top up the cheap ones such that your positions stay about equal. This adds basis points to your return.

Or just pick one out of a hat, and keep buying more of it and reinvesting the dividends every chance you get. Not the greatest idea, but you’ll probably still beat the ETF (see below).

But avoiding that 0.60% management fee on the “convenient” ETF nets you 25% more money when you retire in forty years (you ARE retiring at 59, right? Not if you choose the ETF!) TWENTY FIVE PERCENT is not chicken scratch. Understand the power of exponential growth over long periods. Small fees paid add up to great sums foregone.

#68 Pattattie on 04.14.19 at 7:27 am

FYI. The line “show me the money” was spoken by Rod Tidwell, played by Cuba Gooding, Jr., and not Tom Cruise. Thanks.

#69 maxx on 04.14.19 at 8:23 am

@ #33 April 12th

Before I “retired” (now run our own business), I imagined that I’d like it. A lot.

I don’t. I LOVE it.

There is no feeling like owning your life’s time. Having the luxury of a second and third mug of joe after waking up whilst watching the traffic snail and skid along to the job. I remember those days…..much of it ranged from not bad to pretty decent, but once you experience being in full control of your time, you never, ever want to go back.

#70 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 04.14.19 at 9:19 am

Bless you, bless you, the players, owners and supporters of the Make Believes and Wrapped Whores!

You strengthen my thesis day by day :)

What an awesome night of failure for Toronturds.

When an alleged ‘world-class; (LOL!) city shows you what it really is, BELIEVE IT!

More later…. I am too busy laughing and enjoying this sunny morning of truth :)

But HURRY – rush out to buy more playoff tickets from scalpers and crappy downtown condos TODAY while you still can, GTAholes!

Bwahahaahaahaaahaaaaaa!!!

#71 NoName on 04.14.19 at 9:24 am

Interesting read about politics and big tech, similar things went on early 2000 when meecrospht was dominating, one auntietrust lawsuit gave us gargle and again strong apple… I am all for brake up, not that much for “regulation” because me thinks techs is hoping that gov will take all responsibility for their wrong doing.

https://m.slashdot.org/story/354552

#72 not 1st on 04.14.19 at 9:24 am

4% yield is not very sexy. CPI is 1.7% add in stealth inflation and not much left there.

I am still looking for an example of a regular person (not Buffet) who compounded themselves to vast riches.

The goal is not vast riches, but predictable, tax-efficient lifetime income. Why are you so relentlessly negative? Why bother coming here? – Garth

#73 not 1st on 04.14.19 at 9:28 am

#38 Nonplused on 04.13.19 at 8:08 pm
—-

The left is all the same. Socialism for you while they become millionaires. Carbon tax for you while they jet around. Illegal immigration for your neighborhood but not their gated community.

#74 Remembrancer on 04.14.19 at 9:38 am

#66 Evangeline on 04.14.19 at 6:06 am
“#47 AACI Home-Dog on 04.13.19 at 9:38 pm

A topic I’d like to see covered: should the client and the investment manager share the same political views?
—————————————————-
Its 2019, aren’t you either supposed to be embracing of diversity or making sure already you don’t expose yourself to someone’s “other” p-o-v that doesn’t match yours?

Seriously, IMHO, normally politics (like religion – which for some is becoming less and less distinguishable) would be considered a topic outside a business relationship. Though it may have a bearing on who you do business with… Example, if you have strong personal beliefs, like not wanting to invest in a dolphin liver harvesting business you should seek investment vehicles or firms which reflect or can craft a strategy that reflects and respects your view ie so-called ethical investments, but if there’s fiduciary responsibility to maximise my returns within respective legal and regulatory requirements, that’s the first alignment I want with my financial adviser. Like any product, if you don’t like the public face / business practises of the supplier (and have a choice), then take your money elsewhere…

Look at any type of supplier, there’s ones you you respect and do business with, there’s hopeless ones you wouldn’t contract out to run a hotdog cart for you and there’s complete a-holes you don’t / won’t deal with or you pinch your nose and do it b/c its the only game in town, or you find a new town and new game…

#75 NoName on 04.14.19 at 10:10 am

I remember that time when greece drahma bonds were yielding less than german one, than someone got an idea to short $#!7 out of greece bonds and made a ton.

Now this bloke is pointing out how greece 5 yrs bonds are yielding less than 5yrs tbills.

Cant wait for media to catch up with this few months from now to see whats their take on it.

https://twitter.com/jsblokland/status/1117304317059452928?s=20

#76 crowdedelevatorfartz on 04.14.19 at 10:17 am

@#41 Keith in Rio
“So we’ve got this election in Alberta on Tuesday.

Seems that there are a couple of extremely popular candidates running for office, judging from the hundreds of lawn signs.

FOR RENT and FOR SALE………”

++++++

Good one.

I heard from some Albertan friends that the advanced votes cast are quite a bit more than the previous election in 2015…..
This one is running about 80,000 more votes in the first 2 days of advanced polling than all 5 days of the advanced votes cast in the 2015 election….?

Crazy

https://dailyhive.com/calgary/advance-voting-2019-provincial-alberta-election-surpassed-2015

#77 crowdedelevatorfartz on 04.14.19 at 10:21 am

@ 50 Years of Make Belief

Well, at least they made the play-offs….
Unlike
The Vancouver Ca-schmucks who havent made the playoffs in 4 years , Or won a cup in 49 years, AND they placed 9th in the draft pick…?

Perpetual Loooo- zzerrrrrzzz.

#78 Ryan Lewenza on 04.14.19 at 10:31 am

joblo “What’s the deal with dividends on dual class shares?”

Usually there’s little difference with dividends for dual class shares. Dual class shares usually deal with different voting rights. Bombardier and Ford are good examples of this. For example, even through the Ford family owns 4% of the total equity shares they control 40% of votes through their dual class shares. – Ryan L

#79 Ryan Lewenza on 04.14.19 at 10:36 am

will “Ryan, which index would be the appropriate one for a dividend investor to use to compare performance?”

I would just use the S&P/TSX Dividend Index. It tracks just Canadian dividend paying stocks. – Ryan L

https://ca.spindices.com/indices/equity/sp-tsx-composite-dividend-index

#80 dharma bum on 04.14.19 at 11:03 am

#32 TurnerNation

Millennials.. do not drive. Carbon taxes, and street racing laws – an impound and 10k fine for simply spinning a tire.
——————————————————————–

I feel pity for those who are teenagers and millennials in today’s politically correct, fake environmentally friendly, tree-hugging, pseudo-feminist, gender confused, #metoo, high-tax, crap-job, gutless car world.

It’s like being born into some sort of sci-fi dystopian society.

Borrrrrrrinnnnnnng.

https://www.youtube.com/watch?v=6xfBw1bbV4k

#81 Shawn Allen on 04.14.19 at 11:27 am

To DRIP or not to DRIP?

CEW9 at 21 said:

The other big take-away is that dividends should be re-invested. TSX performance without re-investing was about half that of with dividends re-invested. So if you are starting out I would say to make sure to sign up with a DRIP program.

***********************************
Agreed, dividends need to be reinvested as opposed to spent. But they do not nee to be reinvested in the same stock.

Nothing wrong with the DRIP approach but it is not required.

#82 Figure it Out on 04.14.19 at 11:30 am

“I am still looking for an example of a regular person (not Buffet) who compounded themselves to vast riches.”

I guess you’re not looking very hard. By definition, vast wealth is rare. And most successful compounders aren’t flashy, so you’ve never heard of them. But the media do stories, and biographers write books. Here’s a few:

https://www.forbes.com/sites/maddieberg/2019/02/19/the-greatest-investor-youve-never-heard-of-an-optometrist-who-beat-the-odds-to-become-a-billionaire/

https://www.cnbc.com/2018/05/08/how-a-96-year-old-secretary-amassed-a-secret-8-million-fortune.html

Soros and Druckenmiller weren’t exactly born on third base.

“4% yield is not very sexy.”

It sure isn’t. But if you reinvest it and the dividend gets increased by 4% next year… Well, you can do your own spreadsheet. Most of my investments aren’t very sexy at all. The sexiest thing in my portfolio is a short.

#83 Shawn Allen on 04.14.19 at 11:39 am

How to DRIP?

I believe it used to be that Dividend Reinvestment Plans required your shares to be registered in your name (as opposed to in your brokers name). And in some cases there were discounts on 2, 3 even 5% so that was worthwhile. And it avoided trading fees which used to be much higher.

I believe most of the DRIPs people use today are “synthetic drips” where your broker buys shares at the market price with no trading fees. No discounts apply. Am I wrong?

In 30 years of investing I have never registered a share in my name. For one thing I like seeing the total portfolio (across several accounts) in one place at the big bank broker that I use.

For another thing, I have been under the impression that I can’t register in my own name shares in RRSP, TFSA, RESP in any case. Am I wrong?

Actually I have long been of the opinion that the system for registering shares is archaic. Traditionally, shares were kept in broker name because the share certificates had to be moved around when you bought and sold. Now that everything is electronic, what is this nonsense of having the shares registered in the name of the broker? It seems like this could be due for disruption and maybe the share transfer agents should have a bigger role? The laws and regulations have not been updated to reflect the electronic systems?

#84 Shawn Allen on 04.14.19 at 12:23 pm

Registered Shares and Broker Power

There was a time before registered accounts existed that you bought shares from a broker and received the share certificates that was the normal practice or at least it was popular. You could leave your share certificates with your broker for easier trading but many chose to receive the share certificates. Dividends came as cheques in the mail.

Bond interest was collected by clipping a coupon from a bond and cashing that at a bank.

The thing is you were not tied to any one broker. You could buy shares from multiple brokers and sell at different brokers since you had the share certificates.

Today’s system ties most of us to a particular (usually discount) broker. Or to a particular adviser. That puts the brokers and advisers in a good position as they love recurring revenue and sticky customers. It’s also convenient for investors including far easier at income tax time.

Room for disruption here especially for brokers?

#85 Gravy Train on 04.14.19 at 12:35 pm

#73 not 1st on 04.14.19 at 9:28 am
“The left is all the same. Socialism for you while they become millionaires. Carbon tax for you while they jet around. Illegal immigration for your neighborhood but not their gated community.” All this bitterness and resentment can’t be good for your health. You’re likely releasing cortisol—a stress and fat-storing hormone—into your bloodstream.

Aim for at least one good belly laugh a day to release endorphins (instead of cortisol). I suspect laughter is anathema to your personality, but I have faith that you can make happiness a habit.

“Yours is the Earth and everything that’s in it….” — Rudyard Kipling

#86 not 1st on 04.14.19 at 1:11 pm

DELETED

#87 AGuyInVancouver on 04.14.19 at 1:19 pm

Very interesting article on the Debt Shift theory and how the “Reagan Revolution” and financial deregulation led from banks investing in firms that actually produced stuff, and instead basically speculating in real estate:

“…the current controversy over corporate stock buybacks is a perfect example of how the Debt Shift Theory works. Until 1982, it was illegal for U.S. companies to buy back their own stock. This restriction could be considered to be a credit guidance policy.

In recent years, without that credit guidance policy, many companies are borrowing money at historically low interest rates, not to invest in capital equipment and increased productivity, but to buy back their own stock.

It’s far easier to increase the price of your company’s stock by borrowing money to simply buy some of your company’s own stock than it is to go through all the time and work needed to borrow money and invest it in increasing your company’s productivity….”
https://realestatedecoded.com/the-debt-shift-theory-of-the-global-financial-crisis-and-the-great-real-estate-bubble/

#88 Al on 04.14.19 at 1:21 pm

About yesterdays talk of ALL inverted yield curves not meaning much, our host surely knows the fuss coming from people who study such things was about a particular one inverting, the 10y-3month one. That one inverted, and from what I understand it has done so within two years of every single recession (adjusted) since the WWII, but most importantly, and this is important, it has ONLY done so within about two years from the beginning of the next recession (no false positives is the key here). There graph linked below is not adjusted.

https://fred.stlouisfed.org/graph/?g=luxD

Maybe it’s different this time.

#89 crowdedelevatorfartz on 04.14.19 at 1:22 pm

Another day, another gas hike in the Lower Brainland

87 octane Reg gas $1.69.9/liter
89 Octane Reg Plus $1.79.9/liter
91 Octane Supreme $1.87.9 / liter
94 Octane Supreme Plus $1.91.9 / liter

$100 gets you 58.85 liters of Regular gas at $1.69.9

And the boneheads in govt wonder why the economy is grinding to a halt……

I cant wait til Jason Kenny wins in Alberta and turns off the taps………

:)

#90 Evangeline on 04.14.19 at 1:24 pm

#74 “…but if there’s fiduciary responsibility to maximise my returns within respective legal and regulatory requirements, that’s the first alignment I want with my financial adviser. ”

It seems to me that financial advisors of different political stripes may not measure maximized returns in the same way. For example, I wonder if advisors who manage the present federal government’s investments would see saving the planet as the most maximized return possible.

#91 Lost...but not leased on 04.14.19 at 2:08 pm

Today’s topic is both timely and prophetic…

Pretty clear the fix is in…since Federal Reserve and other gov’ts economic deferrment to private banksters..the only safe bets are…drumm roll..those with the ability to create something out of nothing. Anything else is a fiat reality.

Wasn’t the 2008 crash an example of too big to fail…thus gov’t, the banksters partner in crime…was the fall guy co-opted to order more fiat currency to cover bad/rigged bets?

Stir…and repeat?

#92 Rargary on 04.14.19 at 2:43 pm

Thanks Ryan for the free advice. I’m trying to wrap my head around investing and some of your articles are above my head. What are your thoughts on training courses to learn more about investing?

#93 Yuus bin Haad on 04.14.19 at 3:33 pm

Blessed are the newbies, for they keep the markets alive.

#94 Remembrancer on 04.14.19 at 3:39 pm

#90 Evangeline on 04.14.19 at 1:24 pm
It seems to me that financial advisors of different political stripes may not measure maximized returns in the same way. For example, I wonder if advisors who manage the present federal government’s investments would see saving the planet as the most maximized return possible.
——————————————————-
OK, now you are getting into specifics around a potential agenda and speaking about either public servants or 3rd party government contractors are switched out or influenced? First, if you’re talking CPP, there’s an arms length investment board:

http://www.cppib.com/en/how-we-invest/our-investment-strategy/investing-for-the-long-term/

Now, having come from a part of the country where you could easily discern riding boundaries and how the inhabitants voted by the paving condition of the provincial roads, how government invests your $$ in spending day-to-day is definitely political, but that doesn’t seem to be what you meant…

#95 The Real Mark on 04.14.19 at 3:45 pm

“As you know, every investor must disclose ownership of marijuana stocks in their portfolio when asked at the US Border Security checkpoint.”

There are no issues owning drug companies that sell legal drugs on either side of the border. The US has only barred Canadians who are attending US business meetings with the view of promoting the sale/purchase/production of illicit substances (to wit: marihuana) in the United States. Or who own businesses that do the same in the United States. Owning a stock like Canopy Growth, the TSX60 constituent, which does not sell controlled substances in violation of US Federal Law, would not give rise to a prohibition of entry to the US.

Its no more of an issue than owning stocks in a drug company that sells methamphetamine, which happens to be a prescription medication called Desoxyn for people with a certain medical condition. But if you’re travelling to the US with the view of building a business in illicitly trafficking controlled substances on either side of the border…

“Now that everything is electronic, what is this nonsense of having the shares registered in the name of the broker? “

Brokers typically lend shares to earn securities lending revenue to short sellers, in exchange for cash collateral. This is yet another revenue source for brokers. At the end of the day, if you, for example, sell 1000 shares of Tim Hortons, and someone else at your big-bank-broker buys 1000 shares of Tim Hortons, such accounts are netted out against each other and settlement occurs entirely on the broker’s books.

#96 young & foolish on 04.14.19 at 3:51 pm

Thanks …. excellent post! However, there are some out there who suggest dividends are really taking a bite out of company profits which would be better off invested in further innovations, making said company even more valuable.

#97 Remembrancer on 04.14.19 at 4:03 pm

#80 dharma bum on 04.14.19 at 11:03 am
#32 TurnerNation

Millennials.. do not drive. Carbon taxes, and street racing laws – an impound and 10k fine for simply spinning a tire.
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Nice story bro, buts its just that, a story. Case in point, it ain’t boomers doing all those Uber and Skip the Dishes trips in their Skylarks – true, there are urban settings where, depending on lifestyle, owning a car is just plain stupid 99.9% of the time and rentals etc can take the slack when hoofing it, biking or public transit doesn’t work.

https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2310006701

As for street racing laws, the only one that impacts is the type of idiots caught doing 180KM in a 60KM and unfortunately any people that innocently get in the way and suffer the consequences. You want to drive faster then 120-130 – find a track day somewhere…

#98 Dividend kid on 04.14.19 at 4:04 pm

Thx Ryan! Go leafs & raps!

#99 Remembrancer on 04.14.19 at 4:26 pm

#96 young & foolish on 04.14.19 at 3:51 pm
Thanks …. excellent post! However, there are some out there who suggest dividends are really taking a bite out of company profits which would be better off invested in further innovations, making said company even more valuable.
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The flip side is hoarding cash that doesn’t get invested or using it for share buybacks with the intent to increase share price, maybe just coincidentally just before the season for exercising executive options starts – regardless, there’s definitely trade offs between distributing income to shareholders and capital investment, spending on innovation, increasing employee salaries / performance incentive plans, new M&A activities etc. All part of how a company is run and a factor in researching who you invest in – ETFs are easier then picking individual companies – though you will likely see broad trends in sectors – straight up tech vs. retail vs. financial for example regardless…

#100 Shawn on 04.14.19 at 5:27 pm

The dividend growers outperformance in Canada is impressive but have US dividend appreciation ETFs outperformed the S&P500 since 1986?

#101 tccontrarian on 04.14.19 at 11:30 pm

#72 not 1st on 04.14.19 at 9:24 am

4% yield is not very sexy. CPI is 1.7% add in stealth inflation and not much left there.

I am still looking for an example of a regular person (not Buffet) who compounded themselves to vast riches.
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The goal is not vast riches, but predictable, tax-efficient lifetime income. Why are you so relentlessly negative? Why bother coming here? – Garth
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Well, if the next 4 years are a reflection of my last 4 (no guarantees, of course), I may just be one of ‘them’.
Not ‘vast riches’ necessarily (the Warren Buffet, or Drukenmiller kind), but well into 7-figures.

Unfortunately, cannabis can’t be legalized again! The easy money has already be made, but there are still a few opportunities left. The days/weeks are numbered though, so I wouldn’t be entering now.

As for Garth’s statement – sure, 4% if better than 1% or worse, but nothing wrong to try and identify the ‘out-of-the-park’ returns if Mr Market is offering on a silver platter (oops, I’ve done it again – I mentioned bullion!)

TCC

#102 Mr Fundamental on 04.15.19 at 5:32 pm

Hi there,

Am I correct that the suggested advice from this post is?
1. Buy the stocks that are going to grow profits(must know this in advance).
2. Don’t buy the stocks that are going to have flat/shrinking profits.
Wouldn’t one be better off just buying the lowest expense index fund? Of course it is possible to beat the index by stock-picking, but it is extremely unlikely over the long term.

Thanks,
Mr Fundamental