Thoughts on investing

I'm old and retired but my days of investing for the long term are not over. To a great extent, my wife and I live on the dividends from our investments. We like companies with long histories of honouring dividend commitments. The big five Canadian banks all meet this criteria. And the big utilities, like Fortis and Emera, are also in this league.

My wife and I treat our retirement portfolio like a vegetable garden except our financial garden produces money. Take Fortis, the giant Canadian utility, it has not missed a dividend payment in almost 50 years. In fact, Fortis has raised its dividend in each of the past 49 years.

Does that mean an investor could not lose money investing in Fortis? No! Recently, Fortis hit $62. Now, one can pick up a share for less than $57. Clearly, there are investors who have lost a good chunk of their recent investment in Fortis and if they sell today they will realize that loss. But, if they don't sell they can enjoy the growing dividend and at some point they will realize a capital gain with the recovery of the share price. And it will recover. Of that, there is absolutely no doubt.

Which brings me to two recent stocks that attracted my attention and I acted on that attraction: Telus and TC Energy. Both dropped in value soon after I increased my exposure. I had owned some shares of both. I even wrote posts proclaiming that these stocks were buys; a relative acted on the advice and bought. He and his wife have lost a lot and I worry they might lose faith and sell. Gosh, I hope they can hold on. I still believe both stocks will prove to be good, long-term buys.

With Telus, I am not alone at seeing a buying opportunity. When I check the Analyst Consensus page on WebBroker, I find Telus rated a Strong Buy. I could not agree more.

The 6% dividend not only looks secure, many believe it will increase in the coming year. With a target of more than $29, I happy to own Telus.

Now, look at TC Energy. TRP is almost 30% off its high of the past year. That puts the stock firmly in bear market territory and yet Morningstar only rates TRP a 4**** (four star) stock. Bottom feeders may want to wait but I am happy buying today. Why? Well, for one thing, I immediately begin enjoying the TRP 7.3% dividend. That is the kind of safe dividend that every retiree covets. 

Thanks to dividend paying stocks like Telus and TC Energy, plus the Canadian banks, the large Canadian utilities and a big, smattering of North American REITs, my wife and I withdraw more four percent or more annually from out retirement portfolio without worry. Do we worry about running out of money? Maybe we should but we don't as our portfolio is about twice as large today as it was when I retired some fourteen years ago.