What The Last 5 Years Taught Me About Investing


I didn’t know it back then, but 2013 was a crucial year in my life. At that time, I had been the happy owner of The Dividend Guy blog for the prior 3 years (I bought it in 2010). While I was building my online business, I was also managing a portfolio worth over $100M for my wealthy clients. I remember that back then, many of my clients were nervous about the stock market. The 2008 crash was very fresh in their memories and we were already talking about Greece’s debt problem and a potential Euro Zone explosion. I kept telling them that it was a good time to invest in the market. Not because I wanted to make more money on their backs, but because it was true. I was investing all my money in the market myself. When I look back on this period of my life, I realize that I’ve learned a lot about investing.

Today is always the right day to invest – but have a plan

Back in 2013-2014, many experts agreed that it was probably the worst time to invest in the stock market. I went back in time and found those marvels:

“Of course, with stocks at all-time highs, some seem to have nowhere to go but down.”

~Business Insider

“At ValuEngine.com we show that 77.8% of all stocks are overvalued, 45.2% by 20% or more. All 16 sectors are overvalued; consumer staples by 17.6%, retail-wholesale by 26.4% and utilities by 9.8%.”

~ Forbes

“The market has jumped nearly 30%. This means the stock market’s rally has been based solely on people paying more money for the same amount of earnings — this is known as “P/E multiple expansion.”

~ Motley Fool.

At that same time, I bought 3 of the best performing stocks in my portfolio: Apple (AAPL), Disney (DIS) and Lockheed Martin (LMT). Please note that while AAPL was in a slump, DIS and LMT were trading at their 52-week high. Yet, “today” was still the right day to buy them:

Source: Ycharts

It’s a blessing that I kept investing, right? But I didn’t do it without a plan. I didn’t pull out the newspaper and pick a few companies off of the “favorite editor’s picks” list. I’ve built a complete and proven investment process based on academic studies and my personal experience.

As a private banker, I had access to tons of studies and I called on some of the finest brains in the industry to validate my theories. This is how I invested my money with confidence. Last year, I disclosed my personal return and proved that I beat the market between 2012 and 2017. My latest income report also shows that I’m on the right track to beat the market once again in 2018. I have had similar results with my portfolio models at Dividend Stocks Rock too.

There is no magic in my returns. I’m not a genius. I’m not a guru. I’m just a serious investor with a solid plan. The longer you wait, the more you leave money on the table. All stocks are on sale today; you just have to wait 10 years to realize it.

Dividend cuts happen even during bull market – make sure you don’t suffer

When we ride a bull market, it seems that bad news doesn’t hit the front page that often. You might think that since 2013, dividend cuts have been rare. Which kind of companies would fail their shareholders when:

Unemployment keeps reaching new lows,

Interest rates offer cheap loans,

The economy keeps growing,

Companies keep beating analysts’ estimates,

The government lowers taxes,


Well it happens more often than we like to pretend. The last 5 years haven’t been a walk in the park for everybody. The oil industry was greatly affected by the plunge of the oil barrel prices due to overproduction. 2014-2016 has been a dark time for many Canadian Oilsands companies:

Source: Ycharts

The energy sector isn’t the only industry that suffered many dividend cuts. More recently, we had giants such as General Electric (GE), Owens & Minor (OMI) and Anheuser-Busch Inbev (BUD) cutting down their distributions.

The last 5 years taught me that no company is solid enough to avoid dividend cuts. Investors must track their holdings on a quarterly basis and make sure their investment thesis remains valid. If you have doubts; don’t wait and get rid of the rotten apples.

2013 – a turning point in my life

At the beginning of this article, I told you that 2013 was one of the most important years of my life. But that wasn’t because I had a great career in the private banking industry or because I built a successful blog. 2013 was the year I built Dividend Stocks Rock; my dividend investing platform.

Since the platform was a success, this service enabled me to take a sabbatical year in 2016 to travel the world for twelve months. I grew my business during that year and I was also able to quit my day job when I came back in 2017. It’s been a little over a year that I’ve been living my dream life as I help other investors learning the ropes of building a strong dividend growth portfolio generating safe revenues.

The reason my investing strategy works, the reason why DSR works for others is because I apply a simply, yet efficient, set of rules. I don’t overthink, I don’t change my plan, I don’t permit guesses. DSR has been built on the very same foundation I use to manage my portfolio. As a result, I invested the totality of the commuted value of my pension plan ($108K in 2017) using exclusively DSR tools.

Two companies to hold for the next 5 years

Keeping both lessons in mind, I’d like to leave you with two great companies that may or may not seem overvalued right now, but will definitely be  trading at a higher price 5 years from now. I’m fairly confident both companies won’t cut their dividends during that time and are most likely going to hike their payouts each year going forward.

You can download my analysis of Microsoft (MSFT) and Nutrien (NTR.TO).

The post What The Last 5 Years Taught Me About Investing appeared first on The Dividend Guy Blog.

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