Investing is so Exciting, eh!

Going to the Moon?

When I assumed control of my own portfolio during the pandemic, nobody told me how exciting it was going to be. Buying & selling stocks & ETFs, watching the numbers go up & down, checking out colourful little charts & graphs, it’s all great fun. Way more fun than getting fake coins for completing a crossword puzzle app on my phone. I must have missed my game time though, because I bought some crypto. Now I could carry on watching fake coins on an app, just like before. But without having all the pressure of figuring out which letters I needed to make a word. Crypto wasn’t that much fun though. I didn’t get the idea behind this game. So I sold them & bought these other stocks where you can win dividend coins. Every now & then, these coins just tumble in out of nowhere. Even when you have no idea what you’re doing. It’s great!

Investing is a fun game. I’m still learning & I don’t know all the rules yet. Is it better to own single stock warriors or little ETF armies? What does it mean when the numbers turn red? Am I trying to get the squiggly line to go up or down? Are we supposed to make mountain shapes with the lines? I think the overall objective of the game is to beat “the Market”. The Market is like the evil empire & if you beat the market, you get treasure.

That should be easy, no!

Why?

Because social media & 24 hour stock market channels provide an endless supply of expert advice now. And it’s free. What other game do you play that has it’s own TV channels? It’d be crazy not to take advantage of all that free wisdom, right? Though I must admit, they’re messing with my head a bit. One says buy this, the other says not. Next week, they both reverse what they said last week. Is this some clever gaming strategy? It takes a while to get used to a new game. To understand all the tricks & sly moves that get you ahead. But I have noticed that if you buy anything that a rich & famous person buys, you usually get a great result. Right now, I’m trying to figure out how to buy the right armour & weapons stocks before the famous guy does. That’s a good strategy, right?

It’s the same with all these games though. Kids learn much faster & play much better than us slightly older folk. Kids were getting rich buying these funny game company stocks. And that silly fake-money coin. While I was still trying to work out what to do with those dividend coins. I also didn’t know what bonds were. Was that like some kind of protective potion that you could drink when your stock warriors were under attack? Experts say older people should have a lot of bonds.

Anyway, I was too busy learning about how to attack the market with my stock icons, so I was late to the game buying a few bond ETFs. I know I should have spent more time looking into the powers of the bond potion but, so far, they blow. I’ll just park them in the corner for now & worry about them later. Though most of my stock icons are pretty boring too. All the exciting icons are with the high-flying gamers. This year however, they seem to be flying below my boring stocks. I’m guessing this is another strategy I haven’t figured out yet. Maybe they fly below to look for weak spots in the underbelly of my stodgy stocks? I might pick up a few of those high-flyers now. I don’t know what else to do with those dividend coins.

Back when I had advisors, the market would usually beat me. Except, sometimes, when I lost money. In years when I lost coins, they’d tell me that we (meaning the advisor & me) didn’t lose as much as the market. And that this was a very good thing. It was, I agreed. When the market was up, I didn’t think it was quite so good when the market beat “us”. But I learned that was normal & that we weren’t trying to beat the market. I’m good with that too. But I can’t believe I used to pay advisors to do all this fun stuff for me. They were having all the fun playing the game & I was paying them to play for me. It’s almost like paying someone to go out & have a nice dinner for you. And on you!

Now I have all the fun myself. I’m pretty sure I won’t beat the market either. But it costs me nothing extra to play now. And I can try to not lose as much as the market when things are down. Though I know I’ll miss those fireside consolation chats I had with my advisors when things sucked. Gaming solo can be lonely.

If I lose all my coins, I’m truly shagged. But I gotta say … so far … it’s been a whole lotta fun using a little money learning how to play the game.

Let’s see if I’m still enjoying the game as much by the time the next heroic bull emerges to battle the market.

Game on! ๐Ÿ˜œ

When Dad Invests!

Do What Dad Says … Not! ๐Ÿ˜œ

There are a lot of good investing bloggers in Canada. Some have chargeable services, but many share their knowledge for free. If you’re new to investing & trying to learn the ropes, they are well worth following. I, on the other hand, am all about my investing disasters. Disasters are way more fun, eh!

These days, I’m a dividend growth investor. But that wasn’t always the case.

Back in the tech boom of the late 90s, I specialised in chasing hot stocks. I got slaughtered. I owned some boring stocks that my broker talked me into buying. He had me in shares of companies like Bell Canada Enterprises (BCE), Microsoft (MSFT) & Proctor & Gamble (PG). Advisors are really boring, eh? My personal choices were the hot stocks du jour. Like Nortel (NT). When the dot-com bubble burst, I hung on for a bit. But then sold just about everything I owned at a loss. I kept my Nortel shares though. It was coming back, right?

As it happened, every stock I sold survived & thrived. Only Nortel went to zero. Nothing like losing a few dollars to confirm how big an idiot you are. It’s feels way worse when you throw away a bag of winners though. If you had 10k in PG back then, it would be worth about 92k today, with dividends reinvested along the way. PG spun out The JM Smucker Company (SJM) back in 2000. I remember selling off my few shares of that company right away. Who’d want to own a jam company, for cryin’ out loud? If you had invested 10k in SJM back in 2000, it would have grown to almost 149k today. I owned BCE from early in ’99, that would have gone to about 132k for the same amount invested. While Microsoft, despite the poor returns of the “lost decade”, would today be worth about 123k. I managed to sell all the long term winners. And I held onto the only stock that went to zero.

Listen up, my kids, I’m learning from my mistakes. I promise!

Fast forward to 2020. Now I’m a dividend-growth investor. But I have some contrarian impulses too. I bought shares in AT&T (T) when others were wary. Despite blogging advice to the contrary, that big dividend was calling out to me & I bought. I watched the share price drop. But I held fast, AT&T were about to spin out their media division. It was going to merge with Discovery & I was going to get “free” shares of this new media company. Shares of Warner Brothers Discovery Inc. (WBD) appeared in my portfolio last month. The painful memory of prematurely selling off my JM Smucker Company (SJM) shares was sticky. That lost opportunity left a bad taste in my mouth! ๐Ÿคช
Now an older & wiser investor, I was keeping any new spinoff.

Currently, both AT&T (T) & Warner Brothers Discovery Inc. (WBD) are two of the losers in my portfolio. But that’s just on share price return, I haven’t counted up all those juicy dividends yet! That’ll make up for it, right? Besides, I’m a buy & hold (albeit with white knuckles sometimes) investor now too.
I think I should just hold on & wait for the rebound!?!

Of course I’m the Dad who told my kid to stay away from investing in Bitcoin. Do I even need to say that nothing here is investing advice? It’s not!!!

PS … As I prepare to post this, it’s a down day across all the American & Canadian markets. But by some strange & lucky coincidence, these two are my among my best performers on the day. And yes, I really am keeping them. Cross your fingers for me, please! ๐Ÿคž๐Ÿป

Dividends are like Financial Vitamins for my Portfolio!

Financial Vitamins

None of this is investing advice. In fact, I might be the worst investor you’ll ever meet. Back in the late 90s, I got caught up in the dot-com fever & became an “investor”. Along with my collection of hot stocks, my advisor at the time talked me into a few sedentary holdings. One of them was BCE Inc. (BCE). My favourite growth stock at the time was Nortel, an iconic Canadian tech company that was at the heart of the internet revolution. When the bubble burst, I sold off BCE & kept Nortel. Nortel went to zero. Had I held on to my boring telco shares, from January 1st, 2000, a 10k investment in BCE would be worth over 70k today. With the dividends reinvested. That’s an annualised return of about 9.3%. And it handsomely beats a low-cost S&P 500 index tracking fund (worth almost 47k today), over that same timeframe, by about 2% a year. That comparison includes reinvesting the fund’s (lower) dividends too.

Ignoring those dividends, just looking at the share price growth, BCE is only worth a little over half the index fund after the 21 years. Reinvesting the dividends added more than 50k to the total return. That’s quite the vitamin pill!

Fast forward 20 years & I’m working from home. During a pandemic. I surface from my basement office at lunchtime & I turn on BNN Bloomberg. The parent company of BNN Bloomberg is BCE, go figure. ๐Ÿ˜‚

Anyway, I get hooked. And this becomes part of my new routine. This time, however, I manage to resist the lure of the hot stock brigade. Okay, I admit that I made a few bucks on a brief dalliance with a bitcoin ETF! I know, I know … I would have done really well if I’d stuck with it. But instead, I start looking at big, boring, dividend-paying & dividend-growing companies. I’m too old to be sweating the gyrations of the growth sector every day.

Ironically, I’m a BCE shareholder again! ๐Ÿคช

I wonder if I can stay the course during the next market crash? Will I have the bottle to battle the next bear? I have no idea how this will look 20 years from now. But if it works out, & if I don’t spend it all along the way, I’m sure our kids (or maybe my favourite charity! ๐Ÿ˜œ) will be grateful.

Remembering all those who served & those who continue to serve, especially in our family, on this Remembrance Day.