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    I think that I don’t have to convince anyone on this blog that dividend investing rocks. That it’s among the best investing strategies there are over the long term. It produces income and reasonable growth potential. It basically brings to the table what any investor is looking for: a source of both revenue and growth.

     

    There is one thing however, amongst all the arguments that we can discuss, what is more attractive about dividend investing than any other investing strategy. This is what I call the best thing about dividend investing. Since 2010, I’ve worked to convert my portfolio into a 100% dividend stock account. I’ve successfully made the move and am now cashing in the dividends (literally) of my *new* investing strategy.

     

    For a long time, I struggled to define why dividend investing was so interesting for me as an investor. I was able to find so many reasons to explain my decision but had a hard time to define it into one sentence… until I had this discussion with one of my friends who’s actually an ETF investor. He brought the point to me as we were comparing both investing strategies:

     

    The best thing about dividend investing is that you can build a system easily where you find high quality stocks

     

    When you think about it, dividend investing is far from rocket science. All you need is to find a company that shows a positive trend of revenues and profits paying an increasing dividend. You can combine other factors while building your own investing strategy, but dividend investing remains very basic and simple to understand for any investor. At the same time, it is a powerful way to invest over the long haul.

     

    You don’t need to spend hours each day on your computer to trade.

    You don’t have to analyze graphs and moving averages for hours to find the sweet spot to trade.

    You don’t have to follow your stocks every day to see if there is bad news on the horizon that will be a game changer.

     

    Definitely, the best thing about dividend investing is that it is a powerful, yet effective investing strategy.

    Now your turn, why do you like dividend investing so much?

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  • When I made my last 2 trades back in January (bought Lockheed Martin (LMT) and Gluskin Sheff (TSE:GS)), a reader asked me an interesting question:

     

    Why did you buy 2 stocks at their 52 week high?

     

    While reading the question, I almost felt like an idiot. I mean: who would buy any good at its peak price? Why would it be different when you invest in the stock market? Technically, we always aim to buy low and sell high. How can you make it happen when you buy at the highest price over the past 52 weeks?

     

    My answer is almost too simple: I buy companies I like when I believe in their futures. The price history doesn’t mean much to me. I would rather focus on the future value of the stock and the current valuation of it. Historical trends are not for me.

     

    Then again, this seems a bit simplistic and I don’t have a 10 year market case study to back my thinking. Let’s take a look at my trades in 2013 since the three of them were almost made at the 52 week highs.

     

    Bought 45 Disney (DIS) on May 22nd 2013

    Dividend received: $38.70

    Stock appreciation: +$537.75 (+18.15%)

     dis1

    The first graph represents the past 12 months of pricing history for Disney. You can see that when I bought the stock (on May 22nd 2013), it was almost at its peak. The reason why I bought it was directly related to the DIS stock analysis I made right before trading. I believe the company had everything to continue shooting for new highs. I didn’t mind the low dividend yield as I saw growth in the first place. Let’s check what happen after I bought the stock:

    dis2

     

    As you can see, the stock was flat for a while and was even showing a negative return for a few months in a row (especially in August). However, upon new financial results, the company kept rising since September and hit a new record high in February. So far, I’m up 18% plus the $0.86 dividend per share that was paid in December. In this case, buying the stock at a 52 week high wasn’t a mistake.

     

    Bought 30 McDonalds (MCD) on May 22nd 2013

    Dividend received: $70.50

    Stock appreciation: -$198.00 (-6.46%)

     mcd1

    I followed McDonalds for almost a year before I bought it. The main reason why I was so slow with this trade was because I didn’t want to sell any of my current holdings to add MCD. When I finally made my choice to get rid of a few positions, I jumped on MCD while it was almost at its peak. You can read the reason why I bought MCD here.

    mcd21

     

    After my purchase, the stock dropped almost immediately. Then, after posting disappointing results in 2013, the stock has continued downward slowly. To this date, I’m still in the red with this position even if I cashed a few dividend payments. On the other hand, I’m not too far from showing a positive return and the company is still in good financial shape to keep raising its dividend. MCD just did it again in November (from $0.70 to $0.81).

     

    Bought 44 Wal-Mart (WMT) on August 7th 2013

    Dividend received: $20.68

    Stock appreciation: -$92.84 (-2.74%)

     wmt1

    I bought both MCD and WMT (read my WMT stock analysis here) for the same reason: I wanted to add more consumer stocks to my portfolio. I was overweight in techno at that time and thought that moving a part of my portfolio towards long term dividend payers was a good move. I was more interested in growing my dividend yield over time than showing immediate profits with these two trades. Therefore, it was more a trade to adjust my asset allocation than anything else.

    wmt2

    Fast forward to February 11th 2014, the stock shows a negative return of -2.74% and I’ve received a total amount of $20.68 in dividend. So far, this trade is also showing a negative return of a few dollars.

     

    What’s my point: 1 Good trade and 2 Neutral trades

     

    When I look at the 3 trades, I can say that buying a stock at a 52 week high isn’t a bad move at all. I have two neutral trades (meaning I’m not even down 5% in my portfolio) and 1 very good trade showing over 20% return including the dividend payout. Combine all 3 stocks in the same portfolio and I show a positive return after buying 3 stocks at their peak.

     

    Therefore, we can conclude that it’s a lot more important to select the right companies for the future than buying one at their 52 week lowest price. I bought these 3 companies at reasonable P/E ratios. Another factor to consider, if the P/E ratio is not over 20, it means that the company is not trading at a ridiculous value. Please note there are stocks trading at very high P/E ratios that are still good investments but it rarely happens when you look at dividend paying stocks. If a stock keeps going up and it is mainly because profits and sales keep following the same trend, then it is only normal to pay a higher price than 52 weeks earlier, right?

     

    But DivGuy, You Could Have Waited for a Pullback and Made More Money

     

    Yeah… technically, if I had a crystal ball, I would have known that instead of buying DIS in May 2013, I could have waited for mid-August and bought it even cheaper. A similar gymnast could have found the sweet spot with MCD and WMT. But second guessing is only good for Smartass Party discussions.

     

    To prove my point, I’ll take my two recent trades as examples: The purchase of 107 shares of Gluskin Sheff (TSES: GS) on January 14th 2014 and 22 shares of Lockheed Martin (LMT) on January 16th 2014. At that time, I bought both stocks pretty much at their 52 week highs:

    Bought 107 Gluskin Sheff (GS) on January 14th 2014

    GS

    Bought 22 Lockheed Martin (LMT) on January 16th 2014

    lmt

    Both stocks are showing a positive return in my portfolio a month after the transaction. Now… here’s my challenge to you:

     

    Tell me Which Month in 2014 GS or LMT Will Pullback and Become a Better Deal

     

    If you can’t answer this question today, well there is no point of waiting for a pullback. Someone waiting for a pullback on LMT has been waiting for over a year now and watched the stock rise 82% in the past 12 months… do you really expect LMT drop by that much this year or in 2015?

    lmt2

     

    Still, I’m curious; does anyone have an opinion about when is the right time to buy GS or LMT this year? Personally, I would rather buy the stock at a high price today than wait to buy it at an even higher price tomorrow!

    8 Comments   |   Read more >
  • No matter what anyone tells you, BUILDING A SOLID PORTFOLIO TAKES TIME, DATA and KNOWLEDGE!  When it comes to agreeing with a big investment firm’s marketing tactics it’s about the only thing we agree on. Year after year, we see more DIY investors that have decided to save on fees and manage their own portfolio. If you read this blog, you are probably part of them. But even when you are able to combine both your knowledge with the data you found on the internet, there will always be that struggling question:

    When do you Buy & When do you Sell?

    When a stock makes money – you don’t want to sell it. It makes sense: the stock shows a strong paper profit AND pays a healthy dividend. Will you hold the stocks until the value stagnates and you are left at best with its dividend payment? Will you accompany your stock until the growth is dead and the value drops? You need to know when to sell a winning stock.

    When a stock is a loser – you don’t want to sell it. It makes sense: after all, there are several reasons why you bought this company in the first place. It will eventually go back up…. Or not! How can you tell the difference between a future winner and a perpetual loser? You may think you are paid to wait with the dividend payment. I think you are paid to see your investment die slowly. You also need to know when to sell a losing stock.

    How Can You Make Easy Buy & Sell Decisions?

    As an investor, I’ve been like you for several years; constantly struggling between the idea of keeping or selling my stocks. Whether they go up or down… These are eternal questions for investors: When should I buy and when should I sell?

    I’ve looked for the same answers as you. Value and Growth investing principles teach you how to buy and how to manage your portfolio but remain unclear as to WHEN you should buy and WHEN you should sell. Technical analysis is very demanding and is based on graphs and stats while a real company makes real cash flow, not moving averages. I simply couldn’t find the answer I was looking for.

    This is why I’ve developed my own investment vision, my own investing strategy. I’ve built my technique based on personal requirements I had:

    • I wanted to invest for the long term
    • I wanted to grow dividend payments
    • I wanted to keep my investment process simple but effective

    Simple but effective. These are magic keywords. I want to make money but I don’t want to bang my head against the wall after spending 10 hours per week on my portfolio. A simple and effective investment strategy ultimately leads to having a clear process of when to buy and when to sell. I went on a quest to find easy triggers to dictate my portfolio moves ensuring both dividend growth and avoiding losses.

     

    This is What I’m Sharing with Dividend Stocks Rock

    DSR logo

    Dividend Stocks Rock (DSR) is an investing website I created with a single goal in mind: Making your trading decision easy. The web is filled with lengthy paid investing newsletters and exhaustive stock research services. It’s all good and interesting but it requires several hours simply to assimilate their information. At the end of the day, you know more about your stock but you still struggle to buy or sell it.

    Dividend Stocks Rock is an interactive investment tool created by a dividend investor like you who wants to see his dividend payout increase forever. DSR will help you get right to the point: Buy or Sell?

    1 Goal – 2 Ways

    Dividend Stocks Rock offers you 2 ways to make your trading decisions easy. The good news is that you don’t have to pick one or the other, we give you both of them inside the website!

     

    10 Real World Dividend Portfolios!

    shutterstock_132276902I like stocks so much that I eat some for breakfast. Over time, I’ve noticed that there are two major factors affecting your investment strategy: your risk tolerance and the amount invested. This is why I’ve built 10 different portfolios covering various investment styles; starter, conservative and growth. All portfolios are offered in American and Canadian versions.

    • You can follow a portfolio in line with your investment style.
    • You get an alert whenever we buy or sell a stock.
    • You have access to past performance to track our investment returns.
    • It’s the perfect solution for beginner to intermediate investors who need assistance in building their portfolio.

    Our Portfolios have been built according to our investment beliefs. We look for strong dividend growth companies. This means we look at companies that will be able to both grow in value while increasing their dividend payouts year after year.

    Are you Curious about the results so far? We started our portfolios on October 1st 2013. As at January 2014, 8 of our 10 portfolios beat our benchmarks:

    DSR Portfolio Returns

    8 Dividend Stock Lists

    shutterstock_132275231Time is the most valuable asset we all have. As an investor, you can spend hours looking at different stock filters and looking at which stocks to buy from these lists. The DSR Club generates 8 different dividend stock lists from conservative plays to high yield dividend stocks.

    • Get dividend metrics information – Updated Weekly!
    • Get email alerts each time a stock is added or removed from a list – Buy or Sell Signals
    • Find the stocks you need from the list you are looking for – No Time Wasted Pulling Numbers From Filters
    • This is the ultimate solution for the intermediate to experienced investor who wants to save time finding quality stocks and receive buy and sell signals.

     

     

    What Existing Members Are Saying So Far

    When we created Dividend Stocks Rock at the end of 2013, we wanted to make sure our investment platform was ready to meet our clients’ highest expectations. This is why we decided to do a “pre-launch” with people who signed-up for our special dividend investing mailing list. The pre-launch happened in December and was quite successful. But you don’t have to take my word for it, take theirs:

     

    01 DSR comment

    02 DSR Comments

     

    Is DSR worth the subscription? Do I feel I am getting good value? Compare the $4,900.00 that my wife is paying for advice to a one year subscription to DSR. I can’t believe the value that I am getting! DSR has exceeded my expectations by a long shot!

    David

     

    I just checked out your site. Whoa, impressive! I can see that you have done a lot of work to get this up and running. Great job. I like the Canadian feel to it.

    Nancy

     

    Those are all comments coming from existing members who paid for their memberships. And now that we are ready to take more members on board, I’m coming with a special offer for 30 DAYS only!

     

    Special Launching Offer ***Get TWO Investing Newsletters as Bonuses!*** (Good Until March 13th only)

    Our goal is to make Dividend Stock Rocks as accessible as possible. After all, your money should be invested and not spent in high fees MERs or on expensive newsletters. And this is the way we see it; DSR is an investment in your portfolio.

    I really like when people get more for their money. When you think about it, that’s the whole purpose of investing right? Buying at the right price and benefit from your investment! This is why I’m offering you a special launching package. I’ve teamed up with Pat McKeough from The Successful Investor newsletter to offer you the best investing offer of the year!

    For the price of a Premium Subscription to Dividend Stocks ROCK you also get the choice of receiving one of the two very well-known investing newsletters The Successful Investor & The Wall Street Stock Forecaster.

    DSR CDN package

    DSR US Package

    If you don’t know about Pat’s newsletter, I suggest you checkout his site here and come back for the promotion ;-) Please keep in mind that DSR and Pat McKeough’s newsletter are two separate investing services managed by two different companies. Stock and market opinions may differ from the two services. This is a one-time promotion only and will end on March 13th.

     

    PREMIUM 1 YEAR SUBSCRIPTION + THE INVESTMENT NEWSLETER OF YOUR CHOICE + OTHER BONUSES AT $238.50 $169.50

    CANADIAN PACKAGE

    AMERICAN PACKAGE

    DSR More Bonus

    We all love bonuses right? We know that high quality stock lists along with rock solid portfolio models are great. We have already decided to step up and offer buy & sell updates via email to ease your trading. But we wanted to go further. So here are your other bonuses!

     The Dividend Stocks Rock Premium Newsletter

    shutterstock_132272900This high quality investing newsletter will provide you with first class information about macroeconomics, various stocks to look at and valuable hindsight about the stock market. We will cover various industries and pick the finest stocks with high dividend growth potential. I wake-up every morning to read financial news and economic data. I’m doing all the work for you and sending it monthly. It will be ready to digest and implement right away. This will be part of your favorite Sunday morning reading every month!

     

     Baby Steps For a Better Understanding of Dividend Investing

    shutterstock_132277082This section has been created for beginner investors who wish to learn how to build their portfolio. It explains the DSR philosophy. You don’t need thousands of dollars to start investing; a few hundred is enough. The idea is having a clear investing process to achieve your goals.

    The DSR Investing Baby Steps is an 8 Step process that will guide you through all phases of investing. You can either read each step on your screen or download them in an eBook (pdf) format.

     

    Dividend Growth: Freedom Through Passive Income

    DSR Div Growth BookThe success of my investment strategy found its foundation in the book Dividend Growth – Freedom Through Passive Income. For those who want to learn all about my investing strategy, I wrote this 4.8 star Amazon book in 2012 to explain, step by step, how I build and manage my stocks. You will also find tax optimization tools depending on which account you use to make your trades along with crucial information about the quadrant strategy I use to manage my portfolio as a whole. This book comes as a complement to the Dividend Stocks Rock annual members only.

     

     SO ARE YOU READY TO IMPROVE YOUR INVESTMENTS IN 2014? 

    DSR CDN package

    DSR US Package

    Cheers,

     

    Mike

    The Dividend Guy

     

     NOTE: The Dividend Stocks Rock is a membership site with access to both online pdfs and online content. This platform does not include stock recommendations please read our terms of use & legal information before proceeding. After you order, you will get INSTANT ACCESS to them. This is not a mailed program.

    If you don’t know about Pat’s newsletter, I suggest you checkout his site here and come back for the promotion ;-) Please keep in mind that DSR and Pat McKeough newsletter are two separate investing services managed by two different companies. Stock and market opinions may differ from the two services. This is a one-time promotion only and ends on March 13th 2014.

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