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  • 7 Tips For Dividend Growth Investors [View article]
    Thank you for the kind words. It is tough to hold investments that are losing value quickly, which is why it is important to have a well thought out plan that you truly believe in.
    Apr 18, 2012. 10:18 PM | 1 Like Like |Link to Comment
  • 7 Tips For Dividend Growth Investors [View article]
    I found your first comment interesting. I always found it relatively easy holding stocks in a declining market but holding cash in a rising market drove me nuts.

    When I started investing, I strictly DCA'ed into positions completely irrelevant of market conditions. Now, while I still tend to make several smaller purchases, I also value holding some cash at all times. It is simply a fact that a new bear market will come, sometime, and I would like to have some cash ready to take advantage.
    Apr 18, 2012. 10:16 PM | 3 Likes Like |Link to Comment
  • 7 Tips For Dividend Growth Investors [View article]
    Thanks for the comments Craig. I agree completely: finding a plan that works for you is the most important thing.
    Apr 18, 2012. 10:13 PM | 2 Likes Like |Link to Comment
  • 7 Tips For Dividend Growth Investors [View article]
    I was about to raise that point but you made it for me -- thank you!
    Apr 18, 2012. 10:13 PM | 1 Like Like |Link to Comment
  • 7 Tips For Dividend Growth Investors [View article]
    Hi Richjoy,

    There are potential advantages for both concentrated portfolios and more diversified portfolios. I made my case for concentrated but there are many good arguments for better diversification. What really matters is having a plan that you believe in (and allows you to sleep at night).

    There is definitely truth to what you said regarding price performance during the great recession. Low beta stocks, by definition, won't go down as much as the market -- but they will go down. To pick two random examples, McDonalds held up very well with a 20% loss, while Johnson & Johnson took a 33% loss.

    Taking losses in the 20%-40% range stings and it is cold comfort that the market is down 50%-60%. Investors need to have realistic expectations about how their investments while perform. The simple point that I was trying to make was that in a market decline, dividend growth stocks go down, too.
    Apr 18, 2012. 10:12 PM | 4 Likes Like |Link to Comment
  • Dividend Investors Need To Protect Their Portfolios From Interest Rate Risk [View article]
    Hi Trevose_Lion

    I like Baytex Energy because of their very attractive assets: low-cost, low-risk, long-life assets in the WCSB. I also like their growth-plus-income model: they have a policy of paying out 50-60% of their FFO to shareholders, which gives a nice 5% yield plus dividend growth as earnings grow (10% increase last year). They use the rest of their cash to grow production and have a target organic growth rate of 8%. This should then equate to a total return of about 13% a year. In fact, Baytex has beaten both goals, as they have grown production by 12% annually since 2003 and have a 5 year total return rate of 24% annualized.

    I do like Pembina and own a small stake in the company. They have attractive midstream energy assets that throw off reliable cash flow. With their recent acquisition of Provident Energy, they can now use their pipeline system to deliver Provident's NGLs to oilsands projects, where they are highly valued as diluent. Future growth will probably be tied to oilsands growth. The company has the goal of increasing their cash flow, and dividend yield, by 3-4% a year, so investors are probably looking at a 8-9% total return. Nothing jaw-dropping but, as much as a cliche it is, in this investing environment slow and steady may win the race.

    You were close but have just missed Ecopetrol's ex-div date!
    Apr 18, 2012. 09:30 PM | Likes Like |Link to Comment
  • Dividend Investors Need To Protect Their Portfolios From Interest Rate Risk [View article]
    I tend to agree with you, TexasRedNeck, TIPS would only be beneficial if there was a sudden, large increase in the inflation rate; or more exactly, the CPI as measured by the government.
    Apr 13, 2012. 07:38 PM | Likes Like |Link to Comment
  • Dividend Investors Need To Protect Their Portfolios From Interest Rate Risk [View article]
    Hi Marc. I was using the term "high yield" as a catch all so your criticism about my use of the term is fair. I was trying to warn about interest rate in general and especially as a wake-up call to any dividend investors that may be heavily concentrated in certain sectors (e.g., utilities). Thank you for the insightful comments.
    Apr 13, 2012. 12:56 AM | Likes Like |Link to Comment
  • Dividend Investors Need To Protect Their Portfolios From Interest Rate Risk [View article]
    Hi Onlinden. The Credit Suisse Cushing 30 MLP index is currently yielding roughly 230bps more than the U.S. 30 year bond. In theory anyways, if the "safe" yield of the long bond were to increase the market should insist that the MLP yields increase by a similar amount to justify the increased equity risk. This would mean lower prices, of course.

    Having said that, "pipelines" is a pretty vague term covering lots of companies with vastly different structures. Some will hold up much better in a rising rate environment than others; it is just important for investors to do their due diligence and understand what risk they are taking on.

    And I love your call for aggressive investors to short TLT...if they have the patience to put up with a trade that may move against them for the short to mid-term, I believe that will be handsomely rewarded over the long run.
    Apr 13, 2012. 12:51 AM | Likes Like |Link to Comment
  • Dividend Investors Need To Protect Their Portfolios From Interest Rate Risk [View article]
    Hi Tas. I limited my discussion to equity investments but you make a good point about inflation-linked bonds. However, it is important to note that inflation expectations are built into TIPS prices so they will only protect an investor from unexpected inflation. In today's world of central banks gone wild, a little inflation insurance is not a bad idea.
    Apr 13, 2012. 12:42 AM | Likes Like |Link to Comment
  • Brookfield's Restructuring Could Lead To Big Gains For Investors [View article]
    Hi Global Value Investing. I have a copy of another document by the corporation that stated management fees were as suggested in the article. I have contacted Brookfield's investor relations service for clarification, although I suspect the income statement you provided is correct.

    Thank you for highlighting this inconsistency!
    Mar 28, 2012. 08:54 PM | 1 Like Like |Link to Comment
  • Brookfield's Restructuring Could Lead To Big Gains For Investors [View article]
    Hi Global Value Investing. Brookfield does collect $6.47 per share in management fees. In fact, that is how they calculate their intrinsic value: the book value of their assets plus the management fees they collect on those assets.

    The two statements you quoted are actually saying the same thing, just in different ways.
    Mar 23, 2012. 08:43 PM | 2 Likes Like |Link to Comment
  • Modern Dividend Theory Explained Part 1 [View article]
    I tend to agree with your comment regarding negative returns.

    With a stock or a bond, you will never have to mail the company/issuer a cheque either. The worst that can happen is the value of the security goes to zero.

    The same would be said of dividend stocks. You may never have to mail a negative dividend but the value of the stock, and its dividend stream, can go to zero.
    Mar 23, 2012. 12:01 AM | 2 Likes Like |Link to Comment
  • Are Dividend Growth Stocks Overvalued? [View article]
    Hi Dunkmaster. Very important lessons to learn, indeed.
    Mar 12, 2012. 10:10 PM | Likes Like |Link to Comment
  • Are Dividend Growth Stocks Overvalued? [View article]
    Hi Peter. Both valid metrics for sure. I actually included several more metrics in the original article but the SA editors felt it was a little too verbose.

    I am very bullish on Enbridge as a company but the stock price is becoming increasingly out of touch with the company's fundamentals.
    Mar 9, 2012. 08:38 PM | Likes Like |Link to Comment
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