Dividend Income – October 2014

Dividend IncomeThe markets have been quite tumultuous these past weeks not to mentioned the price of oil impacting the energy sector. These are the moments where you want to have rules in place and follow through with your strategy regardless of where you are in your financial roadmap. I shared my core 7 Investing Rules that keep me grounded and in check with my portfolio.

When markets are down, opportunities abound and those are the reasons to have some cash on the side. Theoretically, as the markets go up, one should start having more cash to jump in when the pull back comes around. Personally, I had some cash, not much though and I did not initiate any transactions.

Related: Canadian Oil Giants Review

Dividend Income

October is just a regular month with my dividend income. I earned a total of $670.24 for the month. This is my lowest month within the quarter. My goal of reaching $1,000 per month this year is officially out of reach. I would have to add more capital to achieve this goal. It will have to await for 2015 where I hope to make my $5,500 to my TFSA early in the year.

If you have not noticed yet, when you have a balanced portfolio, the law of averages brings your market yield in the 2%-4% range. Only an income focused portfolio will have a higher yield and it would be sacrificing growth.

Dividend Income - October 2014

I have recently made adjustments to my portfolio. After looking at the energy sector, I confirmed that it was time to move out of Husky (HSE). While it is paying a good dividend, it doesn’t have the dividend growth I want. I want dividend growth when all is equal. It’s always interesting to evaluate if a higher yield early is better than a lower yield with growth over time … I wanted to keep the money in the energy sector so I bought Suncor (SU).

Related: 10 / 10 Rule of Dividend Growth

I also sold my Bell Aliant (TSE:BA) shares in my RESP as I was not interested in holding Bell Canada TSE:BCENYSE:BCE in the account. BCE had acquired BA and I chose to move on. BA had a higher yield than BCE and I am focused on income in this account. I added Crescent Point Energy TSE:CPG to provide exposure to the energy sector in this account. As I just hinted, the RESP account is geared towards income rather than dividend growth since the investment horizon is shorter. In a way, I am practicing investing for my future portfolio when retirement nears.

Dividend income is a factor of how much you have invested, dividend growth and yield. Yield alone doesn’t build wealth, you need dividend growth and regularly add new money. In 2014, I will have grown my dividend income by nearly $2,000 but I also added $68K to my dividend portfolio. $50K was a transfer from company RRSP and $18K was new money. The effective yield of my overall addition to my dividend account is 2.94% (not taking into account dividend growth).

Keep on saving! It’s the fastest way to build wealth.

Dividend Growth - 2014

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.

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