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Me and My Money

Taking a long view on dividends Add to ...

Susan Brunner

Occupation: Early retiree, living off dividends.

Portfolio: Mostly dividend stocks, including Royal Bank of Canada, Power Financial Corp., Enbridge Inc., TransCanada Corp., Saputo Inc. and Canadian National Railway Co.

The investor

Susan Brunner began investing in the mid-1970s with a 30-year plan to build a portfolio that would let her retire early and indulge in her favourite pastime of reading. "I especially like to read history, but also enjoy economics, investing, science and sci-fi."

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In 1999, she was laid off from her job. At first she thought she would have to get another position because, among other things, her son was about to go to college. Then she did some calculations and realized she didn't have to go back to work. "If you do not work ... and if your income is mostly dividends rather than salary, taxes are a lot less," she explains.

Investing style

Her core portfolio is invested in dividend stocks for the long term. "I still have the first two stocks I bought in the 1970s, which were BMO and BCE," she said. Outside her core portfolio, she has invested in tech and small-cap stocks.

She likes companies that are easy to understand and regularly raise their dividends. She also looks for growth in revenue, cash flow and book value.

A good move was buying TransCanada shares when they sold off and became cheap after the dividend was cut in 2000. "It was a solid stock with a solid plan, but nothing angers dividend investors more than a company cutting their dividends," Ms. Brunner said. Another move was selling AGF Management in 2006 and 2008 because dividend increases were cutting into cash flow.

Best move

"Maybe the best move was buying Research In Motion. I invested $13,000 and have sold off $30,000 of the gains and still have some $30,000 [worth of stock]left."

Worst move

"I bought Onex Corp. in 2001 and sold it in 2008…. I thought it would act like a hedge fund, but it never made much money."

Advice

Dividend stocks are the best investment. "I tend to focus on the slow growth of my dividend income rather than the fluctuating value of the stocks themselves," she added. "I feel that you need to invest in stocks that allow you to sleep at night. If you worry too much about your investments, you might end up selling them at the wrong times."

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