Multipronged Approach to Investing

I love Dividend Growth Investing. The main focus of my investing approach over the course of past few years has been Dividend Growth Investing. I am happy to subscribe to this model and still highly recommend it for investors looking for a reliable method of generating passive income. However, over the course of last year or so – as the bull market rages on in old age, valuations have been pushed to stratospheric levels amid the falling profits from strong blue chip companies. It is for this reason, I have decided to pursue a more multi-pronged approach to investing.

Regular readers of this blog may have noticed the change in my tone of the course of the past few months…I do not feel so hot about this market and the amount of purchases have dried up and my cash position has been building up steadily. Apart from a few pockets of companies, its become very hard to find compelling buys in this market as the debt-fueled share repurchase programs have made me question investing in certain companies.

Multipronged Approach to Investing

Strategy Falling in love with one single investment (or even an investment strategy) is not a very prudent behavior as an investor. Readers may be aware that we are already using a couple of different investing strategies in our portfolios. My wife’s portfolio uses a more passive approach to investing – using broad index funds via ETFs. My portfolio, on the other hand, focuses mainly on dividend growth investing and starting this month, a part of it will also be invested in index funds. This is a good diversification model. With dividend growth companies, I target some companies which I think will do well compared to its peers and let the investments compound over time. With the index funds, I let the market do what it does best; and allows me to instantly diversify providing me with a safety net, in case I had made a terrible mistake with my individual stock picks.

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Why I Chose Dividend Growth Investing

Hi all,

I was invited to guest post at dividendgrowthinvestor.com. DGI is one of the first bloggers I followed about a decade ago that convinced me on following the path to dividend growth investing to achieve financial independence; and it was an honor to be invited. Thanks again for the opportunity, DGI! 🙂

In this article, I introduce readers to some of the mistakes I made early in my investing career and how I discovered dividend growth investing. I also highlight a few advantages that come with this investing model. Be sure to check it out.

You can find the post here >

cheers

R2R

Canadian Stocks to DRIP

Canadian Stocks to DRIP

Recently, while discussing dividend investing with a friend, the topic of DRIP (dividend reinvestment plan), specifically synthetic-DRIPs, came up on Canadian companies. Both he and I invest in companies through a discount broker, which does not support full DRIP and the discussion revolved around total investment dollars needed to DRIP in each company. This gave me an idea to compile the Canadian Dividend All-Star list of companies to see how much one needs to invest to achieve synthetic DRIP.

Note that this exercise is merely meant to be a resource that I am sharing and a company at either end of the scale may or may not be the best investment. Investors are recommended to perform due diligence before investing in any of the companies.

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Is Chevron Dividend Safe?

Chevron Small

Chevron Corp (CVX) is one of the largest oil & gas companies in the world. The company has a market cap of $160B and is an energy behemoth that operates in upstream and downstream businesses.

Last week, the company reported quarterly earnings of -$0.31 on a revenue of $29.25B, which is down 36.6% YoY. Its the first quarter that Chevron had such a huge loss in the past 13 years. While investors were expecting a bad quarter (and a bad year) from Chevron, it was still better than expected as the revenue beat the expectations. The company also announced a quarterly dividend of $1.07, which is what it has paid since Q2 2014.

The media lit up with news from Oppenheimer analyst Fadel Gheitpredicting a dividend cut from Chevron in the coming quarters as he predicts that the company is on an unsustainable path of borrowing funds to pay the dividends.

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Why You Should Average Down On Existing Positions

Following is a guest post from Dividend Beginner

Hello R2R readers, I am The Dividend Beginner, a 22-year old Canadian dividend growth investor from Montreal. I started following other DGI bloggers after I made my first stock purchase in the Vanguard US Total Stock Market Index ETF (TSE: VUN). Once I realized the benefits of dividend growth investing from an assortment of blogs, Roadmap2Retire being one of my favourites, I decided I too would become a dividend growth investor, with a focus on Canadian stocks. I sold my shares in VUN shortly after and began my DGI journey. In less than a year I’ve built up a passive income stream consisting of an average dividend income of $100 per month. I plan to be financially independent in my 30’s, though I don’t have it all planned out in full detail now. By day I’m a full-time medical software developer, and in my free time I enjoy reading about finance, the economy, and stocks, investing in dividend growth stocks, and developing apps and websites. You can view all my writing on The Dividend Beginner blog (www.dividendbeginner.com), and engage with me on twitter, @dividendbegin.

What is “Averaging Down”?

The process of averaging down on your stock investments is a technique wherein you purchase more shares of a currently held stock at lower prices than which you originally purchased. Through this process, you bring down the per share cost basis of your investment in that company; this makes it easier to break even or to turn a profit, but also makes it easier to lose more money as you’ve built a larger concentration of shares.

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