5 Responses to “Tech Talk for Friday January 26th 2024”

1. Vik Says:
   January 26th, 2024 at 9:00 am

   Happy friday. Curious to know everyones thoughts on dividend etfs and MER. Learning about dividend etf that use options/leverage to boost the dividend like HCAL, HYLD etc.

   How do you feel about the MER on some of the dividend etfs? Are they not too high? For example, HYLD is 2.3%. For 10k invested, $230 would be management fees. 10k would get roughly 800 shares so monthly dividend would be just shy of $100. So about 2 months worth of dividends would be fees… is this the right way of thinking about it? VDY is .02% but more than half the yield…

   thanks

2. DougP Says:
   January 26th, 2024 at 11:30 am

   Vik:

   I have about 25 years experience in the stock market, with not a lot to show for it. It is like fishing: it takes a long time to get proficient, and you never stop learning. For the past five years or so I have settled into a simple scheme that is basically the Beat The TSX plan. Select big, solid, well managed Canadian companies in the key sectors for society’s everyday needs (banks, telcos, utilities, energy plus a railway and a grocery store) with at least two stocks in each one. There are a few exceptions to consider, such as CNR and ATD. Make sure they pay reasonable dividends, and that these have gone up consistently for many years. When prices drop, buy more. Don’t waste money on MERs, especially at 2%. Don’t buy mutual funds and ETFs. Don’t trade too often. Buy stocks and pay the fee, once. If you do it right you will see your Projected Income go up EVERY MONTH, which for me is very encouraging.

   This blog has some excellent contributors that are well worth listening to. I also strongly recommend Henry Mah’s blog and his little books. He pursues the above strategy as do The Dividend Guy, Tawcan, and a few others.

   Just my thoughts and conclusions. Everyone is different. I am retired, and old.

3. Larry/ON Says:
   January 27th, 2024 at 2:05 pm

   DougP I like your post. I don’t use EFTs now but their benefit is reduction of risk through diversification. It requires a lot of constant research to construct and adjust a portfolio of single stocks over time. A dividend strategy is a very good approach but you may be passing up opportunities for capital gains from growth stocks that don’t pay much of a dividend and those are mostly found in the US market like MSFT. If any stock you own is going the wrong way spend a lot of time researching what is going on and have a pre-determined limit to how much of a loss you will allow and if it reaches that point sell it before a small mistake becomes a big mistake. Never be afraid to question your initial decision to buy a stock. The worst thing about hanging on to a weak stock with the idea that it will start to perform given time is opportunity cost for a better investment that may be out there. After you set up your portfolio constantly be looking for better stocks and when you think you have found one start cutting your worst idea stock and redeploy to the better candidate. Compare the short and longer term performance of every stock you have to other candidates and to the index. Have a couple of talented money managers who you follow and look at what they are investing and see where their stock picks fit into your ideas. I follow David Burrows at Barometer Capital Management and have been watching every Tuesday market and holdings update webinar he hosts. I am not at all shy to say I have been relying on the research his firm does and it has really helped me on my picks. I highly recommend anyone to watch one of those Tuesday webinars and understand their methodic approach to sector and stock picking.

4. Vik Says:
   January 28th, 2024 at 12:07 pm

   Thanks Doug and Larry for your thoughts.
   I am in the phase where I am trying to focus on growth and not living off of dividend income. So perhaps I should focus less on dividend etfs and go for growth names like tech stocks. Or names like banks that have grown over time but also have dividends.
   Originally I was thinking of using the dividend etfs to buy and hold, and DRIP the dividend over time.

5. Paula Says:
   January 28th, 2024 at 6:14 pm

   Hello Vik, Larry and DougP,
   I like this kind of discussion. I say why not have different accounts that use different styles of investing.
   Use your RRSP/RRIF for safe, dividend stocks or ETFs like the covered calls from BMO. I like ZWC and ZWB. Their MERs are lower and they only write calls against half of their stocks. If you set them up as a DRIP, that is even better over time. I also like XEI that has a very low MER and pays a high dividend.
   Have your growth stocks in your TFSA and never pay tax.
   Have a USD account that takes advantage of the kinds of companies that we don’t have in Canada. Go for growth and do what is working. Be nimble and be willing to change when the market changes.
   You need to have a different mindset for each of these accounts.