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Me and My Money

Dividend stocks are teacher's pets Add to ...

Myke Czikk, 33

Occupation: Teaches English as a second language in Japan

Portfolio:Index funds (Canadian, U.S., Japanese, International and emerging markets), cash, strip bonds and stocks including Bombardier Inc., Big Rock Brewery Income Trust, General Electric Co., High Liner Foods Inc. and National Bank of Greece

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The investor

Encouraged by his parents, Myke Czikk developed a savings habit while growing up in Canada. His first investment, a $1,000 Canada Savings Bond, was made at the age of 10. In high school, money from part-time work was put into mutual funds, and, in university, surplus income from summer jobs was funnelled into a registered retirement saving plan.

By the time the bear market arrived in 2007, Mr. Czikk had paid off his student loans and was sitting on a pile of cash. This allowed him to build up his holdings of index funds at opportunistic prices, while picking up beaten-down shares in several companies.

Investment style

He describes his investment approach as "buy and hold until broken." This applies both to his index funds and individual securities. Although individual stocks currently make up the core of his portfolio, he intends to have index funds eventually assume that role.

His index-fund portfolio seeks to spread risk and increase returns through compounding. "When it comes to index funds, I believe in regional diversification, dollar-cost averaging as well as reinvesting distributions," he explains.

As for individual stocks, Mr. Czikk is "a dividend lover." And he loves to plow them back into more shares: "The majority of my dividend-paying stocks are set up to reinvest dividends, thus compounding returns over time," he says.

He has a contrarian eye. He bought Big Rock Brewery Income Trust in December of 2006 - about two months after Finance Minister Jim Flaherty announced income trusts were going to be taxed like corporations. His return so far is over 45 per cent.

Best move

"In 1998, I started an RRSP and set up automatic monthly contributions into it."

Worst move

"I held onto Biovail for far too long. I didn't lose much, but the money could have been put to better use elsewhere."

Advice

Mr. Czikk comments on financial matters in his blog, In Search of Salt (insearchofsalt.wordpress.com). He suggests most people should set up a diversified portfolio of low-cost index funds, put it on autopilot through an automatic investment plan, and then "forget about it."

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