This is why I index
My criteria for my dividend stocks:
- Must trade on TSX in CAD
- Must have history of consistently growing dividend
- Dividend must be sustainable based on pay out ratio.
- No more than 2 stocks per sector
- Must be large cap.
I have tried to buy on dips, but not necessarily done intense valuation analysis. My current holdings are - T, CNR, RY, CWB, SU, ACO.X. My best performer is CWB which, today, is up 9% since I bought it in March. My worst performer is CNR which is down 9% since buying in Jan and then again in March.
Relative to the TSX (blue line), I am currently under preforming:
(the 2% target is arbitrary, it's there by default with TDW)
Now, these are paper losses and I have no intention on selling. Of course, the time I've been invested is short, things may change in the future, yadda yadda yadda. Despite the losses, I don't plan to sell any of these positions for decades.
What have I learned about myself since starting this explore strategy?
- Buying individual equities is stressful. I fret if I am making the right decision to buy the stock, even though I know in the long term it probably won't matter much.
- I'm constantly checking the day to day value of my stocks, even though it doesn't matter
- I sometimes read forums and news paper articles looking for that "hot tip" for the next stock which I never did before
- When reading about the hot stock, I sometimes find my mind rationalizing why I should buy it, even though it doesn't meet my criteria
Given all this, I greatly prefer the set it and forget it of indexing. I think my stock buying / stock picking days are behind me.