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Business owner for over 30 years now working less and investing more. Our company has grown from $1M in sales to $25M in that time. I have recently sold my shares as part of an exit strategy. My philosophy for success in life and business is based on creativity. As Albert Einstein once said,... More
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Investing to Retire
  • I've Sold My Business, Now What? 0 comments
    Jan 31, 2014 3:04 PM | about stocks: AAPL, BCE, BMO, BNS, JPM, MET, MFC, QCOM, RY, TD

    I've worked for 32 years in and on my business. It's been a great ride, lots of ups and downs, lots of success and plenty of failure. After a few life changing events, I realized that it wasn't about the money any more and I sold my shares.

    I've been a business owner and partner the entire time. The buyout will take 5 years and I currently have an active role in the transition, so retirement is still 5 years or more away.

    I joined the business in 1982 - with revenue at $1M per year. In fiscal 2013 our sales reached $22,000,000. Many people would say that I'm successful, especially in the very competitive printing industry.

    But in the end, there comes a time to sell your business and let a new generation run with it (no it wasn't my children).

    By the time I'm done, I will have significant investable assets beyond my homes. Now comes the hard part. How do I invest it when the stock market has had the best run ever and has reached new highs? Many people are moving cash to the sidelines at a time when I have money to invest.

    This is money that I won't need for a while, so my investment horizon is as long as 15 years before I'll need the money to live on.

    I've done a little saving and investing over the years, but mostly in my retirement account. In 2009 I decided to buy individual stocks rather than mutual funds and I've done very well. However, I think almost anyone could have done well since 2009. With the markets at all time highs, some recent acquisitions like JP Morgan (NYSE:JPM) and Metlife (NYSE:MET) haven't done very well (in the past 2 weeks). Others like Apple (NASDAQ:AAPL), Bell (NYSE:BCE), Scotiabank (NYSE:BNS), TD Bank (NYSE:TD), Bank of Montreal (NYSE:BMO), Manulife (NYSE:MFC), Bell Canada and Royal Bank (NYSE:RY) have done very well. There's a couple of REITs that have gone sideways or down a little.

    So now what? My investment style would be first value investor, second buyer of companies that I can understand and finally buy and hold. I rarely, if ever, sell a stock unless the long term prospects for the company have changed.

    My investment style in the past was very conservative, since all of my wealth was in the business - I didn't want any risk with my retirement money. As I got older, I have slowly taken on more risk and would now classify myself as an investor - willing to ride the ups and downs for longer term gains.

    In the past 5 years, I've averaged 11% compounded annually on my portfolio. I am happy to hold onto dividend payers, but I prefer dividend growers. I don't have the same confidence moving forward that I can continue at this rate, but would be happy with 8%.

    So here's my plan. First, don't rush. I've simply deposited the money and I'm deciding what to do. I've moved some of my Canadian investments into US investments because I'm concerned about the CDN$.

    I like JP Morgan and MetLife because I've done well with Canadian banks and insurance, but the multiples are higher than these two and I don't need more Canadian banks. I also like Qualcomm (NASDAQ:QCOM) because I believe that there are legs to the mobile business and Qualcomm sells to both Apple and Android platforms. And finally, I like real estate and I've found a REIT that operates in Germany, Dundee International Reit (DI.UN). I've decided to purchase equal amounts of these 4 companies and then wait 3 - 6 months to evaluate my options.

    I will keep you posted on my next steps. Any suggestions are appreciated.

    Disclosure: I am long BNS, RY, TD, BMO, CM, BCE, MFC, DUNDF, DRETF, CJREF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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