In a world filled with complicated financial jargon, sophisticated hedge fund managers, and an army of short-term traders looking to eke out a buck, I do things a little bit differently.
Canadian Dividend Investing embraces a simple, long-term investing strategy with an emphasis on dividend growth. I believe dividend growth is truly the best signaling mechanism we have in investing. A growing dividend signals all the good stuff going on behind the scenes, and those are the things we want working for us.
Before I get into specifically how I invest, let me take a minute to say what I don’t invest in. You won’t see any short-term trading here. I won’t hype the latest technological trend, something that usually leaves investors disappointed (and ultimately poorer). I won’t talk about any fledgling gold, silver, or uranium stocks that trade on the TSX Venture Exchange, stocks with boom or bust potential. If a stock could go to zero, I won’t mention it.
One of the most important lessons I’ve learned investing on my own for 20+ years is how pretty good investment results over a long period of time can translate into some pretty impressive returns. To borrow a baseball analogy, we’re not looking for home runs — because home runs tend to be accompanied by strike-outs, and that’s the last thing we want. Instead we’re looking for walks, singles, and doubles, knowing that the runs will come if you string a few of those together.
So without further adieu, here’s my investing philosophy in a nutshell. I’m looking for:
- Boring, old-school companies with predictable revenue
- Which generate gobs of free cash flow
- With an emphasis on stocks the rest of the market either ignores or has gotten completely wrong
- That trade at a reasonable valuation
- Offering sustainable, growing dividends that are poised to increase faster than inflation each year
- Focusing our efforts almost exclusively on the Canadian market
- To help Canadian investors generate safe dividend income, grow their investment capital, and to ultimately get into a position to retire earlier