When I launched my weekly Investor Clinic column back in April, 2009, I figured the new gig would last a few years.<\/p>\n
Nearly 17 years and roughly 800 columns later, it\u2019s time to pass the torch. <\/p>\n
This will be my final Investor Clinic column. I\u2019m also stepping back from the weekly Stars and Dogs feature and putting a bow on the model Yield Hog Dividend Growth Portfolio.<\/p>\n
At 61 and still in good health, I want to see what this retirement thing is all about. Thankfully, in addition to qualifying for the seniors\u2019 discounts at Shoppers Drug Mart, I have my own real-life portfolio of dividend stocks to see me through my golden years.<\/p>\n
If you\u2019ve read my columns, you already know I\u2019m a big fan of dividends. You may have even thought to yourself, \u201cI wish this guy would shut up about dividends already.\u201d<\/p>\n
I will. Just give me a few more minutes.<\/p>\n
John Heinzl\u2019s model dividend growth portfolio as of Jan. 31<\/a><\/p>\n I still remember, more than a quarter century ago, the exact moment when the light bulb went off. I was reading dividend guru Tom Connolly\u2019s newsletter and was intrigued to learn that many companies don\u2019t just pay dividends but raise them each and every year. Really? Wow. <\/p>\n This insight fundamentally changed my approach to investing. Instead of trying to pick stocks that would generate capital gains, I began focusing on building a portfolio of blue-chip stocks designed to pay me a growing stream of income. I reasoned that, if the dividends grew, the share prices would eventually rise, too.<\/p>\n With a few exceptions (BCE Inc. and Algonquin Power & Utilities Corp. come to mind), the strategy has worked largely as I had hoped. The income from my personal portfolio has grown to the point that it could cover all of my retirement expenses. On top of that, I collect a modest company pension, and I am eligible to apply for Canada Pension Plan benefits at any time. In a few years, I\u2019ll qualify for Old Age Security. (Dear Mark Carney: Could we rename OAS to something with a little more youthful vigour \u2013 like the \u201cRock-on Retirement Reward\u201d or the \u201cStill Got Game Grant?\u201d) <\/p>\n Dividends don\u2019t just put money in your pocket. For investors who get rattled by market downturns, the strategy has psychological benefits as well: Because dividends are more predictable and far less volatile than stock prices, they help investors stay calm during periods of market turbulence. It\u2019s like a soother you give to a crying baby, except it\u2019s money and doesn\u2019t get covered in saliva.<\/p>\n The Globe\u2019s stars and dogs for the week<\/a><\/p>\n Having enjoyed the fruits of dividend investing personally, I launched the model Yield Hog Dividend Growth Portfolio to illustrate the strategy in action for Globe readers. On Oct. 1, 2017, I allocated $100,000 of virtual cash across roughly 20 stocks with a track record of increasing their dividends \u2013 including banks, utilities, power producers, pipelines and real estate investment trusts. (You can view the complete portfolio online at tgam.ca\/dividend-portfolio<\/a>).<\/p>\n As of Friday morning \u2013 eight years, four months and 13 days later \u2013 the model portfolio is worth $224,074, for a gain of about 124 per cent. That works out to an annualized total return of 10.1 per cent, including dividends. Thanks to regular reinvestments of those dividends and scores of dividend increases over the years, the portfolio\u2019s annualized income has also more than doubled, to $8,354 from $4,094 at inception. (Just this week, Manulife Financial Corp. hiked its dividend by 10.2 per cent, Restaurant Brands International Inc. by 4.8 per cent and TC Energy Corp. by 3.2 per cent.)<\/p>\n The portfolio\u2019s $100,000 starting value was arbitrary. If you want to see how a portfolio with $1-million would have fared, just add a zero to all of the above dollar figures.<\/p>\n Just to be clear: I believe investors shouldn\u2019t rely on dividend stocks exclusively. I recommend that people supplement their dividend holdings with broad index exchange-traded funds to capture all the returns the market has to offer. That\u2019s what I do in my own portfolio, and the results have been gratifying.<\/p>\n In closing, I want to thank you, the readers, for the thousands of questions and comments you have sent my way over the years. You\u2019ve given me countless column ideas, helped me understand where investors\u2019 heads are at and, most rewarding of all, made me feel like I\u2019ve made a difference in your financial lives. I love words, numbers and helping people. It\u2019s no exaggeration to say I hit the trifecta with this job. I\u2019ve told my editor that I reserve the right to make an appearance from time to time in the future. After 36 years as a Globe journalist \u2013 30 as a staffer and the past six as a freelancer \u2013 I suspect going cold turkey won\u2019t be easy.<\/p>\n