Emotions run wild.
Human beings are the most unpredictable creatures on the planet. We change our minds so often, it's no surprise that we effect so many things on so many levels. If the stock markets were controlled by robots, then I'm sure we would be able to predict where the markets were headed and when the most opportune time to buy and sell would be. When the markets were up, stocks would be sold. When markets are down, stocks would be bought. Transactions would occur with mind blowing accuracy and profits would be made with 100% efficiency. But when human beings are thrown in the mix, emotions and gut feelings throw everyone for a loop. When stock prices drop, people scream "Sell! Sell!" to minimize their losses and end up selling at a loss.. When they see a stock taking off, they scream "Buy! Buy!" only to see it lower the following day and miss out on a bigger profit.
Life is evolving, and so is investing. If you were to show an investor from the 1920's an Ipad and purchased stocks with a few clicks from a magic "Internet", I'm pretty sure they would collapse right in front of you into their pile of ticker tape. Investing used to be only for the wealthy who could afford the expensive broker fees, but now it's cheaper and easier then ever before thanks to online discount brokerages. With more unpredictable humans investing over the decades, how can any trends remain the same? As technology evolves, and society adapts to these new changes, investment analysts have their work work cut out for them.
I've heard a lot theories like "Sell in May and go away" and "Stocks always go down on Fridays", but it's all a bunch of hogwash. If you follow whacked out theories, you might end up getting burned and take a hit on your return. That's why I like dividend investing so much. Tried and true with no gimmicks, and no confusing philosophies. By quality Stocks at low prices, hold till the dividend is cut. Although I was looking forward to some lower priced stock to buy, I'll just keep counting my dividends and wait patiently for the right time.
Here's the updated list for the beginning of October. This is just a rough list of some key Canadian dividend stocks to get your portfolio started. Stocks with green yields are above a 4% threshold. Enjoy.
Have a good Monday, if that's possible.
6 comments:
TransAlta (TA) is trading around its 52-week low with a yield of 5.28%. I am waiting for some money to be transfered from mutual funds and it's at the top of my list.
I agree, trying to play the markets based on these theories hurts the wallet. If there were sure-fire ways to make money, then financial institutions would have already taken advantage of them. I've read some research papers that have suggested that following certain historical patterns can produce abnormal returns. However, once they are published financial institutions take advantage of it and the abnormal returns disappear.
There were some people telling me I should have decreased my position in equities based on the idea that September is a bad month. Glad I don't subscribe to that theory!
"That's why I like dividend investing so much. Tried and true with no gimmicks, and no confusing philosophies. By quality Stocks at low prices, hold till the dividend is cut."
Well said. I like that..."no gimmicks". I think there are some reasonable times to sell other than due to dividend cuts, but otherwise I agree.
To Passive: I did the exact same thing a while ago when it was trading at $20.50. Seemed like a good time to buy.
To DH: There are lots of ways to make money, but it usually requires lots of money to begin with. That's why I love dividend investing; get rich slowly with low to moderate risk.
To DM: I agree with you that there are other times to sell. Hi payout ratio and debt get me concerned, but when a company declares a dividend cut, that's when the fat lady sings and I hit the sell button :)
Hey Addicted - nice post. There aren't too many stocks in your list I wouldn't own. I've got almost half of them right now. FTS, EMA or ECA, are some very strong considerations for 2011. I have no money right now to invest :(
To FC:
Yeah I own majority of the ones listed. Tell me about it; saving up for this new house is killing me. But the more I put on the down payment, the less interest I'll pay over the years.
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