Since 2012, I’ve initiated a tradition on this blog. Each year, I make a selection of 20 U.S. dividend growth companies and 10 Canadian ones. The goal is to build two portfolios of strong holdings that will beat the benchmarks. I’ve always used the same benchmark for the past four years:
VIG: Vanguard Dividend Appreciation ETF. VIG seeks to track the investment performance of the Dividend Achievers Select Index.
XDV: iShares Dow Jns Cnd Slct Dvdnd Indx Fnd. XDV seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the Dow Jones Canada Select Dividend Index (the Index) through investments in the constituent issuers of such Index. The Index consists of 30 of the highest yielding, dividend-paying companies in the Dow Jones Canada Total Market Index.
I’ve selected both benchmarks because they are good and reliable examples of a dividend growth portfolio. If I wasn’t selecting my own stocks, I would probably buy thsse two ETFs to create a dividend portfolio.
Each year; I put myself to the test
Some people may think I put this list of stocks together the way you build your hockey pool for the season. Well it’s a little bit more complicated than that. I take about 2 months of research putting my information together and analyzing companies. Each company has to go through the 7 investing principles of dividend growth investing. These principles have been proven by several academic studies and tested through several years of investing. Then, I work on the selections to make a whole portfolio. It would be easy for me to aim at a specific industry and try to hit a home-run by selecting a sector as a whole. Instead, I’m doing my best to pick among various industries to make sure my selections as a whole could stand up as a portfolio. The idea is to show investors how they can successfully build a portfolio, anytime of the year.
By revealing and tracking my performance year after year, I put myself to the test. I think it’s important to be transparent and to show my readers how I’m doing. If not, what’s the point of reading my stuff right? For all that you know, I might be the worst investor in the world and you read about my theory… This is why I’m not afraid to share my findings with you and follow-up on my results.
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