Back in September, I’ve received slightly over $100K as a result of the commuted value of my pension plan. I decided to invest 100% of this money into dividend growth stocks. Each month, I publish my results. I don’t do this to brag, I do this to show you it’s possible to build a portfolio during an all-time high market. The market will crash… eventually. In the meantime, I’d rather cash some juicy dividends!
Portfolio Holdings
I started this pension portfolio in September with the sum of $108,760.02. As of February 2nd my portfolio shows a total value of $118,769.64 (after my US portfolio converted into CAD). That’s right, I lost about $6,000 in a single month… or should I say a single week? The market has been quite hectic over the past few days:
Source: Ycharts
The fact that I’m investing in dividend growth stocks doesn’t protect me from market fluctuations. Many investors think that because they invest in blue chips sharing their wealth, they have found a perfect shelter from market crashes. I’m sorry to burst your bubble but fluctuation shelters are out of stock for now.
However, there is one thing a dividend growth portfolio provides you: the assurance of receiving an increasing pay cheque each month. In just one month, Lazard (LAZ) announced their special dividend of $1.30 per share. That will be another $132.60 USD in my pocket in a few weeks. After increasing their dividend payment in November from $0.165 to $0.195, Visa (V) is back in February with another increase! Management increased their dividend to $0.21. This is what happens during market fluctuation; you still get paid. Let’s take a look at my marvels this month:
Canadian portfolio (CAD):
| Company Name | Ticker | Market Value |
| Alimentation Couche-Tard | ATD.B.TO | $5,334.58 |
| Andrew Peller | ADW.A.TO | $6,142.00 |
| Royal Bank | RY.TO | $6,213.00 |
| Canopy Growth Corp | WEED | $4,460.34 |
| Enbridge | ENB.TO | $4,742.10 |
| Fortis | FTS.TO | $4,212.45 |
| Lassonde Industries | LAS.A.TO | $5,240.55 |
| Magna International | MG.TO | $4,732.00 |
| Shopify | SHOP.TO | $6,218.00 |
| Cash | $725.25 | |
| Total | $48,020.27 |
U.S. portfolio (USD):
| Company Name | Ticker | Market Value |
| Apple | AAPL | $4,975.50 |
| Disney | DIS | $4,891.50 |
| Gentex | GNTX | $5,287.50 |
| Hasbro | HAS | $4,329.52 |
| Honeywell | HON | $5,012.80 |
| Lazard | LAZ | $5,928.24 |
| Microsoft | MSFT | $5,506.80 |
| Starbucks | SBUX | $4,740.45 |
| Texas Instruments | TXN | $5,383.00 |
| United Parcel Services | UPS | $4,309.39 |
| Visa | V | $6,045.50 |
| Cash | $608.00 | |
| Total | $57,018.20 |
The largest part of the money lost during the past few weeks was generated by my “mystery stock”. The same one which was +40% at one point in 2018… Canopy Growth (WEED.TO).
BOUGHT 185 Shares of Canopy Growth (WEED.TO) @ $30.06
I know…. WEED is definitely very far away from any dividend growth investors’ strategy. I promise, this is the last non-paying dividend stock I’m buying after making trades on Amazon (AMZN) and Shopify (SHOP.TO). But for the record, SHOP.TO is up 22% since October (when I bought those shares) and AMZN (which is part of my RRSP account) is up 31%.
While WEED had a crazy start, the whole marijuana industry is taking a deep dive since then. In this case, my investment thesis is quite simple. The pot industry should generate about $5 billion in sales on Canadian soil per year. While there are lots of uncertainties around legislation and how it will play out, there is definitely strong potential there. I decided to pick the largest producer in this industry as I like having leaders in my portfolio. Canopy Growth is multiplying its partnerships to make sure it has large production capacities.
I’ll be honest, investing in the pot industry is a gamble. I can afford to risk $5,500 on such a trade. My total retirement accounts which include this pension account and my RRSP account worth nearly $200K. Therefore, I have less than 3% invested in a risky business. I would never add more money to this position as I certainly don’t want to jeopardize my whole retirement in the name of greed. Still, we can have some fun trading!
Dividend Income: $93.45
When I reported my first dividend income report in October, I completely forgot that the dividend that was paid as in USD. I realize that now since I received both CAD and USD dividend this month. Therefore, from now on, I will post the dividend received by each company in their currency, but use a total dividend payout in CAD. The conversion rate will be mentioned at each time for transparency purposes.
Canadian Holdings payouts: $18.68 CAD
Andrew Peller: $18.68
U.S. Holding payouts: $61.30 USD
Gentex: $23.50
Disney: $37.80
Total payouts: $93.46 CAD
*I used a USD/CAD conversion rate of 1.22.
In 4 months, I’m already at $413 received. I already know that February will be a great month since Lazard (LAZ) will send me a solid dividend of over $100.
Final Thoughts
During the first negative wave on the market in the past 2 years, I easily find peace with my dividend payments. Besides WEED, chances are I will hold the rest of my portfolio for the next decade and over. Therefore, even if the market drops by 15% in 2018, it won’t change anything. What about you? Are you nervous about the current market drop?
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