This video should be mandatory viewing for "growth only" investors (ie - "STOCK MARKET GAMBLERS") who bash income investing without ever trying it. They're the ones accusing income investing as being "risky", constantly "chasing yields", and not worthwhile. They should try both and pick the strategy that suits them, rather than blindly insulting something they've never tried.
You are so right! Love this! Slow and Steady wins the race. People want to get rich quick but that is a plan for failure. Bigger picture, long term planning. Thank you for sharing your detailed, sophisticated yet easy to understand explanation.
You make good points but there's one thing I can't get used to ... and that investing in stocks with constantly shrinking bvps (book value per share). Shrinking bvps means the stock's EATING ITSELF UP over time. Anything else I mostly agree with your thoughts but personally I still stay with my split strategy (value/contrarian, options selling for income, dividend/income portfolio with stocks, etfs, cefs, royalties). For the dividend income part I'm looking for investments like JEPI, UTF, UTG, DIVO, YYY, KBWD but also for "turnaround opportunities" in dividend paying stock like GEO, DHT, ARCC, MLPs. That way I hope to conserve capital/book value with a nice payout which over the long run also leads to capital appreciation by reinvestment
The one thing I learned years ago came right from Warren Buffet's mouth during an interview. When buying stocks start with the company's product. Is it something that will attractive for a long time? In other words due diligence or DD as we call it. While our portfolio has some Yieldmax/Defiance funds for quick growth we own the old standby funds as we call them. Things like AAPL, BAC, OXY, AMZN, NVDA, XOM, COST, MRK are the foundational funds we'll be passing down to our son. Our portfolios (2) have grown over the years to 1.9 million from an original 200 thousand years ago. Unfortunately the typical investor today wants a quick fix and/or quick riches. Patience is an acquired taste with successful investing. Great video, Adrian, as usual!
Thank you so much for the insight! I just have one thing to add to your comment that stock price didn't matter so much, that when you reinvest (DRIP), it's actually ADVANTAGEOUS to have stock price remain low because the reinvestment would be able to buy back more shares! Stock price being high is meaningless unless you want to sell it at the time.
Thank you very much. This was well done and provided for me a totally different perspective in terms of growth and consistent dividend income. Greatly appreciated!
I wanted to hear this explanation since I started following a month ago. Good job on all 6 points. I started as a growth investor - over the last 12 months and turned 100K$ into 200K$ during that time - mostly commodities (oil/gas) and from COVID market recovery. However, it’s scary trying to continuously beat all the factors that can influence share prices - over the longer term. I’m now taking that profit and moving into income stocks like you’ve talked about. There’s some great dividend income out there - DFN, DGS, ENS, FFN, EIT-UN, even ETHY.
If someone owns a rental home or apartment building, do they care how much the house or building is worth or do they want the rent payments?? Think of dividends as the same as rent payments
@@bidmcms3 If you are renting out a house for 40 years it doesn’t matter what the value of the house is from one year to another. Are you going to sell the house because one year the value drops temporarily??? NOPE!! It only matters when you are going to sell it
I agree. Passive dividend income portfolio for the retired is the only way for consistent div payments. Big. 5 banks and your ZW..... Cover calls. And Enbridge cause there the best for dividends
The only thing i'd worry about is that when the stock drops that much the dividend yield is inversely correlated so the dividend yield would increase dramatically. I'd worry the fund could not maintain the dividend. That's what gives me cold feet about certain funds. Great Channel!
Good job Adrian! You can sleep good at night without having to worry about your stock prices! Anyone else invested in the market your constantly worrying!
All those people are idiots. Thanks to you, I do not ride the emotional wave of the price of stock and I don’t every day look at my stock prices. I almost have the same portfolio as you but on a smaller amount. Keep up the good work.
Okay.....you make complete sense. I redistributed my gains in individual stocks into these recommended Covered Call ETF’s, so far I’ve lost a small percentage in several of these ETF....ZWC, ZWU, ZWS....... however I’ll hold tight it’s got to bottom out at some point. An interest spike is concerning. I’d like a return of my equity as well as return on my equities. Oh....BTW.....I’m in no need of the money, the dividends are fantastic each month, I’ve more money to live off than I can spend. 👍
NGL, was vibin' with this entire video, then my eyes went full existential crisis when you hit us with the "We all are going to die". Great advice and well articulated 10/10
(Q.1) - How far does price have to drop before any institution freezes their dividend payouts also (Q.2) - what are the conditions they would do that and approximately how long - (Q.3) - If you take the passive income approach and say there are crashes and share prices fall to zero, as long as you don't sell and just wait it out and then there should be no issues - would this be correct. Provided the company does not file bankruptcy
So true and puts a lot into perspective. Thanks to you I have shifted my approach towards CC, income and splits. DFN and ENS and all the CI First Asset are great, pure income plays.
I don't focus so much when to sell dividend stocks. I have sold some dividend stocks, but doing less of that. Most of my stocks are dividend stocks. I was mostly in growth stocks, but that's been switched around. I am waiting for the growth stocks to eventually do very well and sell them for dividend stocks. I'm at $128 per month in terms of dividends.
A huge aspect of dividend investing is the DRIP, the dividends consistently reinvested, which means you'll be constantly average costing your investments over time, so the share price and average cost will move more or less together. Combine that with the relatively low movements of the price of dividend stocks, and you don't have to care at all what the stock price is doing as long as the company itself isn't going bankrupt
Hi, Adrian, thank you for sharing your investment opinions! You have a very interesting investment strategy. I agree with most of your points. But I think the capital safety should be on top of your 6 points you have discussed. I have to consider a balanced capital appreciation and a reasonable/sustainable dividend yield as a combination of investment returns . When a dividend stock price continuously declining year by year, but the fund pays a ultra high dividend, I would question on the fund safety and dividend sustainability. There are some "buy-write funds" out there. The institution fund managers invested in stocks, and then sell calls against those stocks, boosting the yield. Have you even experienced your fund been delisted from exchange? I totally respect your investment strategy, Adrian. But I rise my questions to discuss the risk/reward in the dividend strategy. Appreciate your video!
I couldn't agree more. Adrian, a large reason why individuals invest in dividend stock is for the income to live off of. If dividends are paid out for this reason rather than reinvested, in your examples you will have a lower principal base over time on the mentioned dividend stocks. This over time results in a lower principal and yield. I personally would rather take a lower yield with opportunity for principal appreciation and safety of the dividend. Its simply a personal choice
Covered call ETF’s are safe , the capital might not go up like a single stock or non covered call etf but it’s mistake to think the capital will go down . Mine isn’t ... it’s following the stock market and I don’t use the drips...
nice vid as always. can u do a vid about investment trust/income funds. pros and cons of closed end funds? i heard a few cons about closed end fund. 🙏🏼
I agree with your strategy/points. The concern is that individuals with smaller portfolios can be tempted with *very high payout div stocks * in order to achieve a specific income. These stocks have much higher risk of reducing/eliminating payouts when times are tough, or at the very least not increasing their div to keep up with inflation. Therefore, for those investors (i.e. that are still building their portfolio size) I think that having a combination of lower dividend/lower payout% stocks (that have consistently increased their dividends), along with some growth stocks (for portfolio appreciation) is a good strategy. As well, there are some great Canadian stocks/ETF's that have decent payouts, while still having excellent growth potential (Fortis, Enbridge, TXF, industrial REITs, etc.).
Why would these dividend investment vehicles go down in price over the last 10 years when the overall trend in interest rates was down? Shouldn't the share prices go up, since the stocks become more valuable when other interest bearing investments like bonds pay much less?
Love the video... converting my portfolio to passive investing... and this video has helped me get rid of my those stocks I like.... but that are not giving me great dividends... thank you
I am partially into income investing. The positive strategy in my opinion in Canada is that dividends gets taxes less than capital gains if your income through dividends is less than 100k. If above that then capital gains tax is more advantageous. The reason why people buy and sell, short term investing, stocks and options and so on is because the gains are much higher in a short period. Although the analysis is way more complicated due to the dynamic market. Edit: the freedom from the rat race the main goal of income investing.
ok so I am glad you are practising your investing style which is good. the only question comes to mind is how do you protect your income you get from dividends from inflation and the Canadian dollar over time. in other words 5000 income today will not buy you as much in 20 years or even 10 years with the way North america is printing currency and damaging purchasing power of currency? how would you deal with that?
My compounding rrsp accounts. But even without them , I think inflation fears are hugely exaggerated. It’s just a part of life . It definitely doesn’t keep me up at night 😴
Good video, I had boeing stock when they dropped down, I kept holding then they decided to cancel the dividend. Be aware that some companies can cancel the dividends anytime.
Hi I have been following your UT presentations and I plan to buy some HDIF but I need one more info: Their current yield is over 11%, and I have been trying to determine what is their pay our ratio compared to their income. is there any place I can get this info? My worry is that if their payout ratio is higher than their income, they will not be able to sustain paying at such high rates.
Interesting points. As we see at this very moment during the correction, having the peace of mind of secure dividend coming in and not stressing too much about the stock price is a good way to live stress free. Very interesting, thank you !
@@PassiveIncomeInvesting not playing what if game just trying to find value stock to invest in and there's pretty much nothing there...almost every stock I price out is pretty much double the price
@@aleksei7 the time is always now if you're a dividend investor there's lots to choose from.. Especially etfs haven't fluctuate massively since March.. Check his website if you haven't. The pkg he's offering saved me lots of time. Good luck.
@@aleksei7 do you have your crystal ball handy there? If you are in it for the long haul, time in the market beats timing the market. Just dollar cost average from there. Or maybe you can share with us when will be this 40%-50% correction happening.
Seems like this strategy is much more favorable to lump sum investors and not incremental investors…let’s assume a typical retail investor is consistently making small purchases on a retail platform, it’s easy to see how fees could quickly erode the gains made by the passive income...Giving up the larger growth of traditional funds would be very detrimental in the early stages of an investor’s time horizon…in other words, this strategy is actually a really good one…but only if you have larger amounts of cash to put to work on much fewer occasions or perhaps only once or twice…Adrian, you have a great channel and make very interesting videos…but I’d love to hear you address broker/platform fees and book costs of your portfolio. I believe that is a very important factor for a lot of us investors who put away money in small amounts every couple weeks. Thank you
I get what you mean but there are plenty of brokers now with no fees . That’s would I would is if you’re just getting starting and dealing with smaller amounts
very interesting I am a new investor and so far have put more in to growth stock but with all the recent volatility I think I am really a dividend investor lol ! I live in Uk
To summarize, its like buying a home that is losing value year after year and the only reason youre holding on to it is because its providing you "rental income".... when it comes time to sell or something happens in your life, you will be at a MAJOR LOSSS..... NEVER INVEST in anything that in a 10 year decline....This is financial advice, because nothing in life is certain and investing is risk management with emotions. Watching a 500K protfolio decline $5000( 5%) year after year brings anxiety even if your dividend income hasnt change.
What a garbage comparison . Stocks fluctuate , they don’t continuously go down . Your just assuming and predicting the future , exactly what I don’t do
When I invest in things like vanguard funds that yield like 3-4% yea, the 0.6-1% management fees would be a big concern...but most of these funds yield 7+%...so im willing to give that extra management fee
For these types of investments, the fees are not really that relevant. They are built into the yield already so it is not like you have to pay them separately. If you are happy with the yield then no need to worry about the fees. It is not like there is a comparable investment with lower fees and better yields. That the beauty of it.
Great channel. Really like your strategy for myself. Thanks for the free tools. What would you suggest for getting a teenager started in investing. Growth or Passive. Do you have a video on this topic?
Cash flow vs Cap gains. It takes 10 years to recoup principal on a 10pct yield. it would be good though to provide monthly updates on your portfolio to see progress especially against the market when it’s declining.
Love your videos Adrian! I have a quick question. I am 21 years old looking to do a long term dividend investing strategy and was wondering what the better option long term is between ZWC and DFN. I know DFN yield is higher however since they do not increase their dividends over time, I am slightly concerned about inflation. Thank you very much, look forward to every video you put out!
Can’t answer that question really , I suggest getting both ! Diversification is key in terms of fund style , sector and region . Thanks for the positive comments 😎😀
I don't get it, lets say I have 300k in a 12% dividend portfolio, so 36k dividend per year, over 10 years that stock crashed 50%, so my 300k is earning me now 18k instead of 36k, thats a loss? I understand we are chasing income but the stock price also matters?
As a dividend investor, I care about the stock price really at 2 points: When I want to get in and if I want to get out. In because when I buy a stock, the lower the price, the more shares I can obtain. Out because if I do want to sell a particular stock, then I want to obtain as much profit as I can when I sell.
@@PassiveIncomeInvesting I get that price is not significant in the long run, but it is at the point of purchase because I want to make my money stretch as far as it can at that point.
Thank you Adrian for another well made video. I agreed with 100% what you said and really appreciated your explanation on EIT and DFN. I noticed you mentioned below ..."the dividend yield doesn’t go down when the share price goes down . It stays the same ...". Didn't a few etf/stock/fund reduced their dividend in the past little while? Did I misunderstand something?
Cc ETF’s and most funds have not reduced dividends . That’s the beauty of covered call funds . There are 2 sources of income instead of one . Dividends + option premiums . Premiums are more valuable during volatility so it may offset any dividend reductions . Resulting in ... consistent income
What do you think of TXF.B covered call which has 12.86% yield now? Yield is so high not sure whats the catch? And why nobody is talking about. Do you have it in your portfolio? Thanks in advance!
I try to never invest in a stock unless I plan to die with it or pass it on to my family; the money I invest I'm mentally prepared to lose it all as soon as I buy the stock. I've never understood the "fake 1s and 0s" of unrealized gains - even the name rubs me wrong haha. I can get 100 shares at $20 that pays me every month and I get my money back in a few years or I stare at make believe unrealized gains and hope they are there when I need them. I like your approach.
Personally I would never use it to invest . It’s a fancy way of saying borrowed money that you need to pay interest on . Have a solid game plan and understand the risks if you go down that road
One question I have on this: if one never recontributes dividends to buying back stocks/etfs, would the account draw down over time? Is part of the strategy continually contributing some of the dividends to the growth of the fund so that the account grows over time?
Good question , my accounts are all up and I extract the income , so no , not necessarily … but I’m sure others will disagree , but I don’t care 🤷♂️ lol
Thank you clearing this very important point regarding dividend ETFs and dividend investments. This video was very reassuring to me, your investment technique is very unique and hope more people are able to see the genius behind it, I am a believer now. 👍👍👍👍
like you i have a large portfolio and rely on dividend income . such as etfs and EIT etc .. i know EIT pays out as ROC and i get that its not a worry from your previous video and ROC is a tax gift . my main concern with only Div funds etc is the tax implications .. growth ETF's just grow and are only taxable when i sell . i know you will have a good answer . thanks for all the reassurances .
Roc is not taxed at all . Cc ETF’s are taxed better that regular dividends , and most of the time taxed better than capital gains because of the roc . Check out my roc video I discuss it a bit there
This is awesome. This is basically my thought process with interest payments. I USE my dividend payments to buy other stocks that don't pay dividends lol. Waking up everyday to those dividends feel better than anything, especially when stocks go up & down all the time lmao I just don't get how it makes sense to ignore dividend investing, when the dividends can literally outpace your principal & just become a guaranteed free cash flow lol.
Hi Devonia ... it made sense for me to use passive income and retire early from a very stressful IT position, vs investing in non-dividend stocks and having to continue to work. Living off of passive income allows me to be financially independent. I calculated my monthly expenses vs maintaining my lifestyle and figured out I could more than maintain that lifestyle.
This is so healing to just listen... I have a long-term mindset like you, and I agree 99% with what you said in the video. I'm just going to add my thoughts here as well. Many people simply do not understand the mental peace and time you get from investing passively. You don't have to stare on your monitor at 9:30, and you don't have to check your portfolio every single day (although it is fun to do hehe) . I am 19 years old (a bit late into the game (got in @18), but hey) and I don't plan to sell ANY of my investment until I hit the first 100k. Probably will not withdraw anything even after that. I think 10 years will be enough to get me 100k. This means I'm not selling for 10 years, so there's absolutely no reason for me to be happy when the stock goes up, and no reason to be sad when it goes down. Also, since I only invest in ETF and funds, it is less volatile. I just think the market as a savings account with 10% interest haha. All thanks to Adrian, even a young kid like me can learn the right mindset at home for free. what a world we live in...
@@patricksuwala4090 I have gone through 3 bear markets and had no problem collecting my dividends but I have seen growth stocks go bankrupt and cease to exist during those bear markets your point is
@@moresugartradercc2744 Oh i dont doubt it, I only have dividend etfs. Dividends help create some kind of floor in share price. Especially helpful in a bear market. But I never hear people bring up the downsides to owning dividend etfs/stocks...and that is that there is a chance that dividend gets cut in really bad times. If we have a great depression 2.0, you can expect dividends to get cut across the board very hard. In 1932 dividends were cut 75% on average during the crash. Just something to keep in mind. Dividend investing isnt risk free, and I think many people forget that.
@@patricksuwala4090 nobody said it was risk free just a lot less stressful than growth investing but your point is well taken my grandmother lived during those times she held CP.TO shares they were one of the few companies that paid a dividend during those years so yes this could happen again but if that happens we will have a lot more to worry about than our dividends not being paid but even in good times companies cut their dividends that is why we do research to make sure the companies we invest in have enough cash flow to pay the dividend just because they are reliable doesn't mean they are risk free
Are you concerned about a sever market correction...that would likely also bring dividend reductions for the stocks ? What are your thoughts on RISK as it seems to be a logical possibility for the the near or distant ? future ?? AND I am in retirement so a significant loss is the next 10 years IS my 'time for fun " THANKS....!
Not at all , why would I if I buy and hold ? Dividend reductions are rare , especially for blue chips . There’s always exaggerated fear for another market correction, it’s inevitable, so why be scared of it ??
@@PassiveIncomeInvesting Thanks for the quick reply ! I understand your strategy and logic and Im Canadian so it's even better to have advice on our side of the fence ( without paying more for the stocks lol ) Thanks and happy to tune in to your channel !! ...at 65 I am more risk adverse but I also totally get your point...I will ponder this a bit :) s
Love your information & very much agree. However, I have a question I have been thinking about... You talk about some split funds stopping their distributions for some months during the 2020 crash. With traditional investing strategies they always talk about buying some Fixed Income to protect against bear markets, but then you only get like 2-3% return if invest in Bond ETF's (at least with todays rates). Would another strategy be to instead of bond Funds, buy some Preferred Share Split Funds (instead of just the Class A shares with high yields)? These Preferred Share funds basically guarantee the lower distributions & based on history I see this has been true (I have not been able to find any split fund history that missed paying any month on their preferred shares, even through 2008-2009 when some class A shares did not pay dividends for up to 2 years). They all provide yields significantly better than the Bond Funds (at least per current rates in Canada - FAP is an unusual exception with Fixed Income at 9% per international exposure), such as 5-6% and also taxed much better than bonds (with Dividend, Capital Gains or ROC instead of interest). I am thinking that these Preferred Shares would be a much better option for Income Investing (adding some more conservative safety but still fairly decent yields) than buying any Bond Funds, like ZAG. You rarely talk about the idea of buying the Preferred shares of these Split Funds.
@@PassiveIncomeInvesting Ok - thanks for the reply. I guess I am still struggling a bit to get my head out of the traditional way of looking at portfolio management. Also, after just watching your video on Covered Call ETF's, I guess it can be argued that they are as safe as bond funds anyway and certainly have much better returns. I also am currently struggling to properly understand those "Put Option" based funds & the relative risk of them - so will be looking forward to your new video on that topic then.
I completely agree with what you said, but doesn't share price directly affect dividend yield? I guess if you constantly invest every paycheque, it wouldn't matter in the long term, but I still think share price is important to consider (but I guess it's different with index funds and covered call ETFs since price stays relatively the same/not super volatile like growth stocks).
Thank you both for your efforts and the clarity you present in your videos. Maybe you have already made a video on this topic but my question to you is why did you go with TD direct instead of questrade or wealthsimple. My assumption is that QT and WS did not exist when you started out in investing, would that be accurate? Which of the 3 would you recommend now ?
As I a new investor I use Questrade and Wealthsimple. The advantage of Wealthsimple is I can take a small dividend payment of $30 and reinvest it the same day without paying a commission. The disadvantage is that they are limited in what they sell. For example, they do not sell ENS. They also have issues with dividend payments as we saw with the DFN dividend payout yesterday. This issue was rectified within 24 hours and the BMO trading platform had the same issue. I also like using the app, super easy to trade and to follow your portfolio. I had to use their customer service once and it was a positive experience. Questrade is an excellent platform. Their site is very easy to follow and has lots of features and I hope they develop an app soon. The only real issue is they will charge a commission for all transactions except the purchase of ETFs. The customer service is a bit of a challenge as it can take up to two hours until you can speak to anyone. But I understand they have more staff now. That said, if you are purchasing large quantities at one time the minimal commission is no big deal. As you receive your dividends you can put them directly into an ETF or wait until you get enough cash to purchase something like ENS or GDV which Wealthsimple does not carry. If you are trading in large volumes, I would follow Adrian’s advice and use the TD platform. He also recently stated that CIBC Edge is pretty good. At the end of it all, you get what you pay for. If you want a professional trading platform go with TD or CIBC, if you want to save a little money on commission use Questrade and if you want a discount trading platform that doesn’t carry all the stock and has the occasional issue use Wealthsimple. I hope this help.
It’s because I do all my banking with td . So all my accounts are connected which provides convenience. To be honest the broker you use makes little to no difference .... just like where you open a bank account .
@@nomad8279 Thank you for the quick response. I too bank @ TD like Adrian and I see the value in the "all in one place" mentality. Also I didn't know that not all stocks are available on WS... I have been on the fence between TD and QT. I will probably go with QT for the lower costs, as I most likely will not be doing the volume that Adrian does. Thanks again
@@PassiveIncomeInvesting Thank you Adrian for your response and see the value with Nomads summary. I am leaning towards QT though for the lower costs, because I don't see myself doing any large volume purchases
Thanks Adrian for the useful video. Question: If suppose a stock has a high dividend yield of 10%. and suppose worst case if the market crashes and the stock price goes down to 50% for next few years,. so will the dividend yield be still around 10%, or does it jump to about 20% to maintain the same dividend payout. My problem is in google search I am not able to get history chart of the dividend % for my stocks. for eg enbridge.
It depends on the annual dividend rate which is decided by the fund manager . If the dividend rate aka the annual dividend doesn’t change during the crash like it didn’t for eit than your yield stays the same . But if somebody snatches the stock at 50% off they lock in a 20% yield .
Curious of what happens when these funds drop so low that there's no value in the fund? I can't see these funds maintaining some of these payouts as there prices reach lows. Like a $12 stock that yields 10% or $1.20 annually. If the trend is downward when that stock is worth $8 the yield is now 15%. When it eventually goes down to $1.20 then it's yielding 100%. I enjoy your videos and the information, really awesome. I am just trying to understand the strategy which is betting on nothing changing in the funds you have invested in.
If your always thinking about nonsense “ what happens “ scenarios my friend your better off leaving your money in your bank account and work until your 75... why would it ever drop so low ?? It’s impossible , it would mean that all the companies the fund holds will go bankrupt ... have you looked as what the funds hold ?? There mostly all blue chips
@@PassiveIncomeInvesting if they are holding stocks that are going to increase in value then the value of the fund itself should remain flat or slightly grow. If it's decreasing in value then that means they are paying out more than is necessary to preserve your capital. While I understand your side, you're also playing a game of assuming that your dividend payments will remain steady for the rest of your life. Being in your kid thirties you're assuming that these funds will be consistent for the next 60 years which is unlikely. Again, I love your videos and perspective so these questions come from a place of curiosity and wanting to learn.
@@CPR1CHARDSON I agree with your comments completely. I also appreciate these videos very much but I'm struggling to understand how an ETF that holds primarily blue chip companies can steadily decline over an extended period of time while the market has gone up over that period. Doesn't that suggest that the payout is actually eroding the funds value and unless the payout changes, the value will continue to erode?
Gonna be turning on the drips first chance I get. I just invested in three etfs today. Drips don't show up in my account though. Can it take time for drips to be available?
Well, you care about NAV vs market price, so it does matter a bit! And if a fund is poorly managed, dividends fall and price follows… price is important then. And when deciding what to buy, the price comes into it in all the ratios we look at. You want to invest in good funds, and that’s reflected in the price. BUT, ya, I do not want to pin my hopes and plans on the emotional inconsistencies of “the market” ( a narsacistic teenaged psychopath).
If DFN eventually starts dropping below the 15 NAV, will they just do a reverse split? Is that what split share corps do when there nav is getting too low?
Although it’s possible, it’s pretty rare from what I’ve seen. The fund rebuilds itself while it’s not paying out the distributions, helping it to eventually get back over $15
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This video should be mandatory viewing for "growth only" investors (ie - "STOCK MARKET GAMBLERS") who bash income investing without ever trying it. They're the ones accusing income investing as being "risky", constantly "chasing yields", and not worthwhile. They should try both and pick the strategy that suits them, rather than blindly insulting something they've never tried.
So true!
You are so right! Love this! Slow and Steady wins the race. People want to get rich quick but that is a plan for failure. Bigger picture, long term planning. Thank you for sharing your detailed, sophisticated yet easy to understand explanation.
You make good points but there's one thing I can't get used to ... and that investing in stocks with constantly shrinking bvps (book value per share). Shrinking bvps means the stock's EATING ITSELF UP over time. Anything else I mostly agree with your thoughts but personally I still stay with my split strategy (value/contrarian, options selling for income, dividend/income portfolio with stocks, etfs, cefs, royalties). For the dividend income part I'm looking for investments like JEPI, UTF, UTG, DIVO, YYY, KBWD but also for "turnaround opportunities" in dividend paying stock like GEO, DHT, ARCC, MLPs. That way I hope to conserve capital/book value with a nice payout which over the long run also leads to capital appreciation by reinvestment
The one thing I learned years ago came right from Warren Buffet's mouth during an interview. When buying stocks start with the company's product. Is it something that will attractive for a long time? In other words due diligence or DD as we call it. While our portfolio has some Yieldmax/Defiance funds for quick growth we own the old standby funds as we call them. Things like AAPL, BAC, OXY, AMZN, NVDA, XOM, COST, MRK are the foundational funds we'll be passing down to our son. Our portfolios (2) have grown over the years to 1.9 million from an original 200 thousand years ago. Unfortunately the typical investor today wants a quick fix and/or quick riches. Patience is an acquired taste with successful investing. Great video, Adrian, as usual!
Thank you so much for the insight! I just have one thing to add to your comment that stock price didn't matter so much, that when you reinvest (DRIP), it's actually ADVANTAGEOUS to have stock price remain low because the reinvestment would be able to buy back more shares! Stock price being high is meaningless unless you want to sell it at the time.
Thank you very much. This was well done and provided for me a totally different perspective in terms of growth and consistent dividend income. Greatly appreciated!
You’re amazing,thank you for your honesty and transparency and sharing your knowledge 🙏👍
I wanted to hear this explanation since I started following a month ago. Good job on all 6 points. I started as a growth investor - over the last 12 months and turned 100K$ into 200K$ during that time - mostly commodities (oil/gas) and from COVID market recovery. However, it’s scary trying to continuously beat all the factors that can influence share prices - over the longer term. I’m now taking that profit and moving into income stocks like you’ve talked about. There’s some great dividend income out there - DFN, DGS, ENS, FFN, EIT-UN, even ETHY.
I hope it helped . No better time to take profits and invest it in pii
If someone owns a rental home or apartment building, do they care how much the house or building is worth or do they want the rent payments?? Think of dividends as the same as rent payments
Good point!
Yes the property value matters a lot if it’s appreciating significantly over time, netting more profit than rent income
@@bidmcms3
If you are renting out a house for 40 years it doesn’t matter what the value of the house is from one year to another. Are you going to sell the house because one year the value drops temporarily??? NOPE!!
It only matters when you are going to sell it
Good point! And it also depends on what you want to do with it. Collecting rent and selling aren't the only options however.
I have my house empty because of the appreciation. When you start renting, there are tax implications.
I agree. Passive dividend income portfolio for the retired is the only way for consistent div payments. Big. 5 banks and your ZW..... Cover calls. And Enbridge cause there the best for dividends
Totally agree. I'm buying CC and splits but keeping my banks for now. Had them for over a decade incl Enb. Any new Enbridge buys go to ENS.
The only thing i'd worry about is that when the stock drops that much the dividend yield is inversely correlated so the dividend yield would increase dramatically. I'd worry the fund could not maintain the dividend. That's what gives me cold feet about certain funds. Great Channel!
That’s too bad ... my feet are warm like in Xmas day in front of a warm fire 🔥
Good job Adrian! You can sleep good at night without having to worry about your stock prices! Anyone else invested in the market your constantly worrying!
All those people are idiots. Thanks to you, I do not ride the emotional wave of the price of stock and I don’t every day look at my stock prices. I almost have the same portfolio as you but on a smaller amount. Keep up the good work.
Okay.....you make complete sense. I redistributed my gains in individual stocks into these recommended Covered Call ETF’s, so far I’ve lost a small percentage in several of these ETF....ZWC, ZWU, ZWS....... however I’ll hold tight it’s got to bottom out at some point. An interest spike is concerning. I’d like a return of my equity as well as return on my equities. Oh....BTW.....I’m in no need of the money, the dividends are fantastic each month, I’ve more money to live off than I can spend. 👍
NGL, was vibin' with this entire video, then my eyes went full existential crisis when you hit us with the "We all are going to die". Great advice and well articulated 10/10
(Q.1) - How far does price have to drop before any institution freezes their dividend payouts also (Q.2) - what are the conditions they would do that and approximately how long - (Q.3) - If you take the passive income approach and say there are crashes and share prices fall to zero, as long as you don't sell and just wait it out and then there should be no issues - would this be correct. Provided the company does not file bankruptcy
So true and puts a lot into perspective. Thanks to you I have shifted my approach towards CC, income and splits. DFN and ENS and all the CI First Asset are great, pure income plays.
You’re welcome ! Enjoy it
I don't focus so much when to sell dividend stocks. I have sold some dividend stocks, but doing less of that. Most of my stocks are dividend stocks. I was mostly in growth stocks, but that's been switched around. I am waiting for the growth stocks to eventually do very well and sell them for dividend stocks. I'm at $128 per month in terms of dividends.
The only time I look at an ETF price is to see if it has a yield over 10%. If so, I'm in.
A huge aspect of dividend investing is the DRIP, the dividends consistently reinvested, which means you'll be constantly average costing your investments over time, so the share price and average cost will move more or less together. Combine that with the relatively low movements of the price of dividend stocks, and you don't have to care at all what the stock price is doing as long as the company itself isn't going bankrupt
Also the fact that you can get the same increase in passive income for a cheaper price😎
Good thing the companies are all blue chips then 😉
No Drama here !!! Just great investing !!!Thanks Adrian !!!
Great video, thanks man, thumbs up!!!!
Hi, Adrian, thank you for sharing your investment opinions! You have a very interesting investment strategy.
I agree with most of your points. But I think the capital safety should be on top of your 6 points you have discussed. I have to consider a balanced capital appreciation and a reasonable/sustainable dividend yield as a combination of investment returns . When a dividend stock price continuously declining year by year, but the fund pays a ultra high dividend, I would question on the fund safety and dividend sustainability. There are some "buy-write funds" out there. The institution fund managers invested in stocks, and then sell calls against those stocks, boosting the yield. Have you even experienced your fund been delisted from exchange?
I totally respect your investment strategy, Adrian. But I rise my questions to discuss the risk/reward in the dividend strategy. Appreciate your video!
I never had a problem with that , the proof is in the pudding ! , just because the yield is high it doesn’t mean it’s not safe , big misconception...
I couldn't agree more. Adrian, a large reason why individuals invest in dividend stock is for the income to live off of. If dividends are paid out for this reason rather than reinvested, in your examples you will have a lower principal base over time on the mentioned dividend stocks. This over time results in a lower principal and yield. I personally would rather take a lower yield with opportunity for principal appreciation and safety of the dividend. Its simply a personal choice
The principals you describe work if dividend reinvested. My only fear is when you reach to the top of the dividend chain it carries risks
Covered call ETF’s are safe , the capital might not go up like a single stock or non covered call etf but it’s mistake to think the capital will go down . Mine isn’t ... it’s following the stock market and I don’t use the drips...
Great info. Thanks mate.
Great video! It would be cool to see how you invested your TFSA limits !!
Great message. Smooth delivery. Thank you.
the more videos of you i see, the more i ask myself, where have your channel been all my life
nice vid as always. can u do a vid about investment trust/income funds. pros and cons of closed end funds? i heard a few cons about closed end fund. 🙏🏼
I agree with your strategy/points. The concern is that individuals with smaller portfolios can be tempted with *very high payout div stocks * in order to achieve a specific income. These stocks have much higher risk of reducing/eliminating payouts when times are tough, or at the very least not increasing their div to keep up with inflation. Therefore, for those investors (i.e. that are still building their portfolio size) I think that having a combination of lower dividend/lower payout% stocks (that have consistently increased their dividends), along with some growth stocks (for portfolio appreciation) is a good strategy. As well, there are some great Canadian stocks/ETF's that have decent payouts, while still having excellent growth potential (Fortis, Enbridge, TXF, industrial REITs, etc.).
That’s why I always push for diversification
Love what you said at the 18:15 mark and up, just so true.
Thank you 🙏🏽
You’re amazing, I’m definitely you’re royal subscriber 🙏👍
Your advice is what I'm looking for - Cdn perspective and consistent and safe passive income!!!
Don't fool yourself this is far from safe income. High yield traps will result in very low or negative real returns.
Why would these dividend investment vehicles go down in price over the last 10 years when the overall trend in interest rates was down? Shouldn't the share prices go up, since the stocks become more valuable when other interest bearing investments like bonds pay much less?
Love the video... converting my portfolio to passive investing... and this video has helped me get rid of my those stocks I like.... but that are not giving me great dividends... thank you
Enjoy it brother !
I am partially into income investing. The positive strategy in my opinion in Canada is that dividends gets taxes less than capital gains if your income through dividends is less than 100k. If above that then capital gains tax is more advantageous. The reason why people buy and sell, short term investing, stocks and options and so on is because the gains are much higher in a short period. Although the analysis is way more complicated due to the dynamic market.
Edit: the freedom from the rat race the main goal of income investing.
ok so I am glad you are practising your investing style which is good. the only question comes to mind is how do you protect your income you get from dividends from inflation and the Canadian dollar over time. in other words 5000 income today will not buy you as much in 20 years or even 10 years with the way North america is printing currency and damaging purchasing power of currency? how would you deal with that?
My compounding rrsp accounts. But even without them , I think inflation fears are hugely exaggerated. It’s just a part of life . It definitely doesn’t keep me up at night 😴
Good video, I had boeing stock when they dropped down, I kept holding then they decided to cancel the dividend. Be aware that some companies can cancel the dividends anytime.
That’s why I’m getting away from single stocks
Hi I have been following your UT presentations and I plan to buy some HDIF but I need one more info: Their current yield is over 11%, and I have been trying to determine what is their pay our ratio compared to their income. is there any place I can get this info? My worry is that if their payout ratio is higher than their income, they will not be able to sustain paying at such high rates.
its not a regular stock, there is no payout ratio. that's for single companies
Example of share price of $13 in 2014 which is now $26.80 over almost 20 years.. why is inflation it being factored in ????????
Interesting points. As we see at this very moment during the correction, having the peace of mind of secure dividend coming in and not stressing too much about the stock price is a good way to live stress free. Very interesting, thank you !
Going to be a correction of more like 40-50%
Lol how can you say that ... don’t play the what if game 😎
@@PassiveIncomeInvesting not playing what if game just trying to find value stock to invest in and there's pretty much nothing there...almost every stock I price out is pretty much double the price
@@aleksei7 the time is always now if you're a dividend investor there's lots to choose from.. Especially etfs haven't fluctuate massively since March.. Check his website if you haven't. The pkg he's offering saved me lots of time. Good luck.
@@aleksei7 do you have your crystal ball handy there? If you are in it for the long haul, time in the market beats timing the market. Just dollar cost average from there. Or maybe you can share with us when will be this 40%-50% correction happening.
Seems like this strategy is much more favorable to lump sum investors and not incremental investors…let’s assume a typical retail investor is consistently making small purchases on a retail platform, it’s easy to see how fees could quickly erode the gains made by the passive income...Giving up the larger growth of traditional funds would be very detrimental in the early stages of an investor’s time horizon…in other words, this strategy is actually a really good one…but only if you have larger amounts of cash to put to work on much fewer occasions or perhaps only once or twice…Adrian, you have a great channel and make very interesting videos…but I’d love to hear you address broker/platform fees and book costs of your portfolio. I believe that is a very important factor for a lot of us investors who put away money in small amounts every couple weeks. Thank you
I get what you mean but there are plenty of brokers now with no fees . That’s would I would is if you’re just getting starting and dealing with smaller amounts
very interesting I am a new investor and so far have put more in to growth stock but with all the recent volatility I think I am really a dividend investor lol ! I live in Uk
Look for uk dividend stocks and ETF’s ! I’m sure you have them there !
Great information
To summarize, its like buying a home that is losing value year after year and the only reason youre holding on to it is because its providing you "rental income".... when it comes time to sell or something happens in your life, you will be at a MAJOR LOSSS..... NEVER INVEST in anything that in a 10 year decline....This is financial advice, because nothing in life is certain and investing is risk management with emotions. Watching a 500K protfolio decline $5000( 5%) year after year brings anxiety even if your dividend income hasnt change.
What a garbage comparison . Stocks fluctuate , they don’t continuously go down . Your just assuming and predicting the future , exactly what I don’t do
You should be mentioning expenses as well, which at rates like 1% add up significantly over the years along with prices and dividends mentions.
When I invest in things like vanguard funds that yield like 3-4% yea, the 0.6-1% management fees would be a big concern...but most of these funds yield 7+%...so im willing to give that extra management fee
For these types of investments, the fees are not really that relevant. They are built into the yield already so it is not like you have to pay them separately. If you are happy with the yield then no need to worry about the fees. It is not like there is a comparable investment with lower fees and better yields. That the beauty of it.
@@ddelmarsmith There are always fees and they will always impact the compound interest particularly the longer you are invested.
Yes !!
Absolute gold. So glad I found this channel and subscribed. Great content and learning in this video. THANK YOU.
Great channel. Really like your strategy for myself. Thanks for the free tools. What would you suggest for getting a teenager started in investing. Growth or Passive. Do you have a video on this topic?
I totally agree with you.
Great video - Reconfirms why I am made the switch! Thank you!
Me too!
@@shootermacgavin1 Me too!
again adrian ,really good video .i love more and more my passive income portolio !!!!!!! your lesson make the concret of my investment style ...
Enjoy your life brother ! You will love it more and more every month that goes by , trust me ...
The main reson I watch your channel, Is I like your strategy. The only "what if" I have is if I bought more EIT.UN and DFN in March of 2020 lol!
Lol I know what you mean , that’s why it’s best to just invest regularly
Watched and liked, thanks Adrian!
Cash flow vs Cap gains. It takes 10 years to recoup principal on a 10pct yield. it would be good though to provide monthly updates on your portfolio to see progress especially against the market when it’s declining.
Lovely video, solid points. The time that gets wasted in this game topped by worries...just not worth it.
Exactly, better to own the game than play it
Your smart to enjoy your life now instead of waiting till you get old. I
You understand everything ...👍
Who cares what people say !
Love your videos Adrian! I have a quick question.
I am 21 years old looking to do a long term dividend investing strategy and was wondering what the better option long term is between ZWC and DFN.
I know DFN yield is higher however since they do not increase their dividends over time, I am slightly concerned about inflation.
Thank you very much, look forward to every video you put out!
Can’t answer that question really , I suggest getting both ! Diversification is key in terms of fund style , sector and region . Thanks for the positive comments 😎😀
I don't get it, lets say I have 300k in a 12% dividend portfolio, so 36k dividend per year, over 10 years that stock crashed 50%, so my 300k is earning me now 18k instead of 36k, thats a loss?
I understand we are chasing income but the stock price also matters?
Stock prices go up and down my friend … they crash , they recover . So why care if you hold them forever ?
Great explanation! Thanks
As a dividend investor, I care about the stock price really at 2 points: When I want to get in and if I want to get out. In because when I buy a stock, the lower the price, the more shares I can obtain. Out because if I do want to sell a particular stock, then I want to obtain as much profit as I can when I sell.
Yeah that’s if you’re buying single stocks , with my strategy you don’t even need to worry about it this
@@PassiveIncomeInvesting I'm a little confused about your strategy. When you are buying into a particular security, do you not seek the best price?
What’s confusing about it ? I buy to hold forever and never sell , so I don’t care stock prices . It’s the simplest strategy in the world
@@PassiveIncomeInvesting I get that price is not significant in the long run, but it is at the point of purchase because I want to make my money stretch as far as it can at that point.
Not as much as you think …
Thank you Adrian for another well made video. I agreed with 100% what you said and really appreciated your explanation on EIT and DFN. I noticed you mentioned below ..."the dividend yield doesn’t go down when the share price goes down . It stays the same ...". Didn't a few etf/stock/fund reduced their dividend in the past little while? Did I misunderstand something?
Cc ETF’s and most funds have not reduced dividends . That’s the beauty of covered call funds . There are 2 sources of income instead of one . Dividends + option premiums . Premiums are more valuable during volatility so it may offset any dividend reductions . Resulting in ... consistent income
@@PassiveIncomeInvesting - Thanks Adrian.
Truly an eye opener!!
What do you think of TXF.B covered call which has 12.86% yield now? Yield is so high not sure whats the catch? And why nobody is talking about.
Do you have it in your portfolio?
Thanks in advance!
Of course I do , did you see my portfolio unveil video ?
smart choices explained, also depending very much on the time horizon of the particular investor and his wish for peace of mind.
I try to never invest in a stock unless I plan to die with it or pass it on to my family; the money I invest I'm mentally prepared to lose it all as soon as I buy the stock. I've never understood the "fake 1s and 0s" of unrealized gains - even the name rubs me wrong haha. I can get 100 shares at $20 that pays me every month and I get my money back in a few years or I stare at make believe unrealized gains and hope they are there when I need them. I like your approach.
Sounds like we think the same way 😎 well said
Your 20 dollar stock will be 5 or 10 at the end , nowhere near 20 when the NAV crashes. These are long term losers
How do you feel about using a little margin for buying into an etf? Was thinking about using a little to boost my earnings and buy qyld.
Personally I would never use it to invest . It’s a fancy way of saying borrowed money that you need to pay interest on . Have a solid game plan and understand the risks if you go down that road
You nailed it man 🙏 👍
One question I have on this: if one never recontributes dividends to buying back stocks/etfs, would the account draw down over time? Is part of the strategy continually contributing some of the dividends to the growth of the fund so that the account grows over time?
Good question , my accounts are all up and I extract the income , so no , not necessarily … but I’m sure others will disagree , but I don’t care 🤷♂️ lol
Thank you clearing this very important point regarding dividend ETFs and dividend investments. This video was very reassuring to me, your investment technique is very unique and hope more people are able to see the genius behind it, I am a believer now. 👍👍👍👍
Appreciate it ! Thanks 🙏
I like your strategy!
like you i have a large portfolio and rely on dividend income . such as etfs and EIT etc .. i know EIT pays out as ROC and i get that its not a worry from your previous video and ROC is a tax gift . my main concern with only Div funds etc is the tax implications .. growth ETF's just grow and are only taxable when i sell . i know you will have a good answer . thanks for all the reassurances .
Roc is not taxed at all . Cc ETF’s are taxed better that regular dividends , and most of the time taxed better than capital gains because of the roc . Check out my roc video I discuss it a bit there
@@PassiveIncomeInvesting aweseome thanks Adrian
This is awesome. This is basically my thought process with interest payments. I USE my dividend payments to buy other stocks that don't pay dividends lol. Waking up everyday to those dividends feel better than anything, especially when stocks go up & down all the time lmao I just don't get how it makes sense to ignore dividend investing, when the dividends can literally outpace your principal & just become a guaranteed free cash flow lol.
Hi Devonia ... it made sense for me to use passive income and retire early from a very stressful IT position, vs investing in non-dividend stocks and having to continue to work. Living off of passive income allows me to be financially independent. I calculated my monthly expenses vs maintaining my lifestyle and figured out I could more than maintain that lifestyle.
Great job !
could you start a video how to invest 200 000$ in a portfolio for income?
This is so healing to just listen... I have a long-term mindset like you, and I agree 99% with what you said in the video. I'm just going to add my thoughts here as well.
Many people simply do not understand the mental peace and time you get from investing passively. You don't have to stare on your monitor at 9:30, and you don't have to check your portfolio every single day (although it is fun to do hehe) .
I am 19 years old (a bit late into the game (got in @18), but hey) and I don't plan to sell ANY of my investment until I hit the first 100k. Probably will not withdraw anything even after that. I think 10 years will be enough to get me 100k. This means I'm not selling for 10 years, so there's absolutely no reason for me to be happy when the stock goes up, and no reason to be sad when it goes down.
Also, since I only invest in ETF and funds, it is less volatile. I just think the market as a savings account with 10% interest haha.
All thanks to Adrian, even a young kid like me can learn the right mindset at home for free. what a world we live in...
Thank you so much, as a new middle aged investor, I am learning honest knowledge from you. God Bless you and your family.
investing in passive income is a lot less stressful than other forms of investing
Until companies start cutting dividends in bear markets lol
None of my covered call ETF’s or income funds have cut their dividends during 2020 ... you were saying ???
@@patricksuwala4090 I have gone through 3 bear markets and had no problem collecting my dividends but I have seen growth stocks go bankrupt and cease to exist during those bear markets your point is
@@moresugartradercc2744 Oh i dont doubt it, I only have dividend etfs. Dividends help create some kind of floor in share price. Especially helpful in a bear market. But I never hear people bring up the downsides to owning dividend etfs/stocks...and that is that there is a chance that dividend gets cut in really bad times. If we have a great depression 2.0, you can expect dividends to get cut across the board very hard. In 1932 dividends were cut 75% on average during the crash. Just something to keep in mind. Dividend investing isnt risk free, and I think many people forget that.
@@patricksuwala4090 nobody said it was risk free just a lot less stressful than growth investing but your point is well taken my grandmother lived during those times she held CP.TO shares they were one of the few companies that paid a dividend during those years so yes this could happen again but if that happens we will have a lot more to worry about than our dividends not being paid but even in good times companies cut their dividends that is why we do research to make sure the companies we invest in have enough cash flow to pay the dividend just because they are reliable doesn't mean they are risk free
Are you concerned about a sever market correction...that would likely also bring dividend reductions for the stocks ? What are your thoughts on RISK as it seems to be a logical possibility for the the near or distant ? future ?? AND I am in retirement so a significant loss is the next 10 years IS my 'time for fun " THANKS....!
Not at all , why would I if I buy and hold ? Dividend reductions are rare , especially for blue chips . There’s always exaggerated fear for another market correction, it’s inevitable, so why be scared of it ??
@@PassiveIncomeInvesting Thanks for the quick reply ! I understand your strategy and logic and Im Canadian so it's even better to have advice on our side of the fence ( without paying more for the stocks lol ) Thanks and happy to tune in to your channel !!
...at 65 I am more risk adverse but I also totally get your point...I will ponder this a bit :) s
I got videos lined up on this topic so stay tuned
another great video!!
As always, great content. thanks for the new video.
How can I calculate compound interest with dividen reinvestment?
Love your information & very much agree. However, I have a question I have been thinking about... You talk about some split funds stopping their distributions for some months during the 2020 crash. With traditional investing strategies they always talk about buying some Fixed Income to protect against bear markets, but then you only get like 2-3% return if invest in Bond ETF's (at least with todays rates). Would another strategy be to instead of bond Funds, buy some Preferred Share Split Funds (instead of just the Class A shares with high yields)? These Preferred Share funds basically guarantee the lower distributions & based on history I see this has been true (I have not been able to find any split fund history that missed paying any month on their preferred shares, even through 2008-2009 when some class A shares did not pay dividends for up to 2 years). They all provide yields significantly better than the Bond Funds (at least per current rates in Canada - FAP is an unusual exception with Fixed Income at 9% per international exposure), such as 5-6% and also taxed much better than bonds (with Dividend, Capital Gains or ROC instead of interest). I am thinking that these Preferred Shares would be a much better option for Income Investing (adding some more conservative safety but still fairly decent yields) than buying any Bond Funds, like ZAG. You rarely talk about the idea of buying the Preferred shares of these Split Funds.
Nah there’s better options out there for safety like zph or zpay , video in the works for these “safer” funds
@@PassiveIncomeInvesting Ok - thanks for the reply. I guess I am still struggling a bit to get my head out of the traditional way of looking at portfolio management. Also, after just watching your video on Covered Call ETF's, I guess it can be argued that they are as safe as bond funds anyway and certainly have much better returns. I also am currently struggling to properly understand those "Put Option" based funds & the relative risk of them - so will be looking forward to your new video on that topic then.
Keep learning , learning is good
Thanks bro! Also, can you move your wall street bull print so that is centred between the door and the furniture? ;)
Thanks So much again for great content ✌️✌️👍
Why aren't you selling puts to get into the underlying first, then sell covered calls at the same time of collecting dividends.
I completely agree with what you said, but doesn't share price directly affect dividend yield? I guess if you constantly invest every paycheque, it wouldn't matter in the long term, but I still think share price is important to consider (but I guess it's different with index funds and covered call ETFs since price stays relatively the same/not super volatile like growth stocks).
Volatility is good for covered call ETF’s !
Thank you both for your efforts and the clarity you present in your videos.
Maybe you have already made a video on this topic but my question to you is why did you go with TD direct instead of questrade or wealthsimple. My assumption is that QT and WS did not exist when you started out in investing, would that be accurate? Which of the 3 would you recommend now ?
As I a new investor I use Questrade and Wealthsimple. The advantage of Wealthsimple is I can take a small dividend payment of $30 and reinvest it the same day without paying a commission. The disadvantage is that they are limited in what they sell. For example, they do not sell ENS. They also have issues with dividend payments as we saw with the DFN dividend payout yesterday. This issue was rectified within 24 hours and the BMO trading platform had the same issue. I also like using the app, super easy to trade and to follow your portfolio. I had to use their customer service once and it was a positive experience. Questrade is an excellent platform. Their site is very easy to follow and has lots of features and I hope they develop an app soon. The only real issue is they will charge a commission for all transactions except the purchase of ETFs. The customer service is a bit of a challenge as it can take up to two hours until you can speak to anyone. But I understand they have more staff now. That said, if you are purchasing large quantities at one time the minimal commission is no big deal. As you receive your dividends you can put them directly into an ETF or wait until you get enough cash to purchase something like ENS or GDV which Wealthsimple does not carry. If you are trading in large volumes, I would follow Adrian’s advice and use the TD platform. He also recently stated that CIBC Edge is pretty good. At the end of it all, you get what you pay for. If you want a professional trading platform go with TD or CIBC, if you want to save a little money on commission use Questrade and if you want a discount trading platform that doesn’t carry all the stock and has the occasional issue use Wealthsimple. I hope this help.
It’s because I do all my banking with td . So all my accounts are connected which provides convenience. To be honest the broker you use makes little to no difference .... just like where you open a bank account .
Nomad , this was a great summary , you should start your own TH-cam channel !!!
@@nomad8279 Thank you for the quick response. I too bank @ TD like Adrian and I see the value in the "all in one place" mentality. Also I didn't know that not all stocks are available on WS... I have been on the fence between TD and QT. I will probably go with QT for the lower costs, as I most likely will not be doing the volume that Adrian does.
Thanks again
@@PassiveIncomeInvesting Thank you Adrian for your response and see the value with Nomads summary. I am leaning towards QT though for the lower costs, because I don't see myself doing any large volume purchases
Great points, thanks for the video!
Hi Adrian, ETHY went from 6.50 to 3.40 so I am down 11,000. Divident’s we’re cut too. Your opinion Sir
take a guess! (you already know)
@@PassiveIncomeInvesting not sure what you mean
Hold it
Thanks Adrian for the useful video. Question: If suppose a stock has a high dividend yield of 10%. and suppose worst case if the market crashes and the stock price goes down to 50% for next few years,. so will the dividend yield be still around 10%, or does it jump to about 20% to maintain the same dividend payout. My problem is in google search I am not able to get history chart of the dividend % for my stocks. for eg enbridge.
It depends on the annual dividend rate which is decided by the fund manager . If the dividend rate aka the annual dividend doesn’t change during the crash like it didn’t for eit than your yield stays the same . But if somebody snatches the stock at 50% off they lock in a 20% yield .
Thank you for your honesty
Curious of what happens when these funds drop so low that there's no value in the fund?
I can't see these funds maintaining some of these payouts as there prices reach lows. Like a $12 stock that yields 10% or $1.20 annually. If the trend is downward when that stock is worth $8 the yield is now 15%. When it eventually goes down to $1.20 then it's yielding 100%.
I enjoy your videos and the information, really awesome. I am just trying to understand the strategy which is betting on nothing changing in the funds you have invested in.
If your always thinking about nonsense “ what happens “ scenarios my friend your better off leaving your money in your bank account and work until your 75... why would it ever drop so low ?? It’s impossible , it would mean that all the companies the fund holds will go bankrupt ... have you looked as what the funds hold ?? There mostly all blue chips
@@PassiveIncomeInvesting if they are holding stocks that are going to increase in value then the value of the fund itself should remain flat or slightly grow. If it's decreasing in value then that means they are paying out more than is necessary to preserve your capital.
While I understand your side, you're also playing a game of assuming that your dividend payments will remain steady for the rest of your life. Being in your kid thirties you're assuming that these funds will be consistent for the next 60 years which is unlikely.
Again, I love your videos and perspective so these questions come from a place of curiosity and wanting to learn.
@@CPR1CHARDSON I agree with your comments completely. I also appreciate these videos very much but I'm struggling to understand how an ETF that holds primarily blue chip companies can steadily decline over an extended period of time while the market has gone up over that period. Doesn't that suggest that the payout is actually eroding the funds value and unless the payout changes, the value will continue to erode?
Gonna be turning on the drips first chance I get. I just invested in three etfs today. Drips don't show up in my account though. Can it take time for drips to be available?
It’s possible there’s a 1 month delay , you’ll have to check with your broker if they don’t turn off properly 😉
Well, you care about NAV vs market price, so it does matter a bit! And if a fund is poorly managed, dividends fall and price follows… price is important then. And when deciding what to buy, the price comes into it in all the ratios we look at. You want to invest in good funds, and that’s reflected in the price. BUT, ya, I do not want to pin my hopes and plans on the emotional inconsistencies of “the market” ( a narsacistic teenaged psychopath).
Thanks again for the valuable information, Adrian.
Some solid tips here - enjoy it now!!
Right ! Life is short as it is
Wouldnt you be better off investing in growth stocks and then selling to buy income stocks when your nest egg is big enough?
Not if you want passive income now !
Hi Adrian, Is your spreadsheet available for download as an editable version?
yes
Awesome video man!! Keep it up 👍
If DFN eventually starts dropping below the 15 NAV, will they just do a reverse split? Is that what split share corps do when there nav is getting too low?
Although it’s possible, it’s pretty rare from what I’ve seen. The fund rebuilds itself while it’s not paying out the distributions, helping it to eventually get back over $15
What trading platform do you use?
Td