AgentBearBulls Ride to Early Retirement

Ladies & Gentlemen.. This thread is going to follow my long term portion of my portfolio which is geared towards an early retirement.

A bit about me and where I am starting. I am a 22 year old Canadian (Yes almost all of these stocks are going to be Canadian) I am professionally employed and make a well above average salary for my age & home province. I am already a home owner, with mortgage and rental income.

I am involved with a company pension plan & stock plan, both returning me double what I put into them up to the maximum amount I can contribute - Based only on what my company is contributing - this does not take into consideration actual growth of each.

I also of course have a Canadian Pension Plan as required by the Government.

The plan is to invest $416/mth ($5000 a year) into my Tax Free Savings Account (this is the maximum yearly contribution). I will then be purchasing stocks that follow roughly these guidelines:

-Pay Dividends of at least 3-4%
-Only invest in companies that are in the top of their industry
-Are a safe medium/long term investment - bit of both
-On a 1, 5 & 10 year history have every year continued upwards in value of at least 7% a year before dividends (average).
-Have increased dividends yearly for 5-10 years or since started on the market if less then 5 years.
-Are expected to keep increasing dividends.
-Scrap any company that cuts dividends
-Ask "Would I consider investing in this if it wasn't paying dividends" If the answer is "No" Then I would pass.

The dividends are all going to be in a DRIP account to reinvest them all back into the stocks.

I will be adding to my portfolio to spread around risk from one certain industry.

Long Term Goal is to comfortably be able to retire by 35-45 (depending how much additional money comes into my hands between 22 and when I went to retire, and how much more I am able to reinvest each year above and beyond the original $5000/yearly.) living off dividends, rental income, company stocks and pensions. However Pensions wont be available to me without penalty until 60 & 65.

The first Stocks I am considering putting in the portfolio are:

BMO & BCE - This is based on my guidelines above.

Any comments, suggestions, advice is all very much appreciated. I am new to the dividend side of things and would be happy to hear any input from a seasoned Veteran.

Thanks! It's one of those Get rich, without being rich - start young plans.

Thanks Drew. No doubt you and I will be playing some Pinch's are slightly more high risk stocks outside of this plan.

What sort of return can be expected off a medium risk Mutual fund? This is not an area I am very familiar with. With a mutual fund I'd simply add funds to it and not manage it myself, is that correct?

As Per our convo - this is for PWT.UN

The dividends are pretty good, but I don't like the fact that they've been cutting dividends for the last few years instead of increasing. Maybe something to consider short term and keep a close eye on, but I don't think it would be the first I put in my long term account.

Thanks Craze, that sounds good.. I'm a bit concerned even with being in safe Canadian stocks and spreading the wealth around, that if the market tanks ill lose overall.

My Bank would likely be a good place to start looking at mutual funds, yes?

Jesus.. Wouldn't mind haven picked that up at the start of 2009. You think dividends are being cut in 2011?

I am considering adjusting my buying plan slightly for a short time. Since I am buying with Canadian dollars and the dollar has now reached parity for the USD and expected to possibly reach 1.15 within 2011, I figure I should buy buying American stocks and holding until the USD overtakes the Canadian again.

After looking over several dividend stocks (Canadian right now) I have decided to jump in BCE.TO this morning. Picking up shares at 33.88. This is a small dip in price from the average for the last couple of weeks. Considering this will be a long term hold small fluctuations are not a major concern for me overall.

My reasoning behind this purchase:

-Dividend: 5.4% - Above the 3-4% Minimum I'm looking for
-a Leader in their industry
-(Seems like) Safe Mid-Long Term investment
-Stock is up 28% over the last 5 years - Steady Growth for the most part
-Have Kept dividends the same or increased each payout (mostly increased)
-Expected to keep increasing div's

Although this doesn't exactly meet my criteria, I like it for a mid term hold. - Purchased DAY.TO yesterday on the dip. This has a dividend paid monthly and a yearly total of 6%. I expect over the next 12-18mths it to reach the $15 level.

Looking at a few different stocks this week to jump into if I don't buy more BCE or DAY.


Bank Stocks
NA.TO
CM.TO
BNS.TO

Energy Stocks
POW.TO
EMA.TO

All input appreciated.

I like this is a long term Div stock as well as a short term pinch play.