William W. Wood
Shares in Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Bank of Nova Scotia, BCE Inc., Pembina Pipeline Corp., Inter Pipeline Ltd., Enbridge Inc. and Sun Life Financial Inc.
Mr. Wood and his wife are in their mid-70s. They have no debt and receive income from TransAlta Corp.'s defined-benefit pension plan (which is inflation adjusted), Canada Pension Plan, Old Age Security and a registered retirement income fund. Splitting income with his wife reduces taxes.
He is also a leading member of the Calgary ShareClub, an investment club associated with the Canadian MoneySaver publication. One of the fun things they do is an annual stock-picking contest.
How he invests
In addition to his pension income, Mr. Wood and his wife have investments worth more than $350,000 in non-registered accounts. The holdings are spread over the banking (42 per cent), telecommunications (32 per cent), pipeline (18 per cent) and insurance (8 per cent) sectors.
These sectors have solid, entrenched companies that pay lucrative dividends. The average yield on his portfolio is 4.4 per cent, most of which is tax free since nearly all the dividends qualify for the dividend tax credit. His basic philosophy is "buy and hold, but not buy and forget."
"I have an agreement with my full-service broker that if he recommends selling any stock … he notifies me with the reason why," declares Mr. Wood. "If, after doing my own research, I agree, I will ask him what I can replace it with. Again, I research it myself before I commit to the purchase."
When it comes to purchases, he prefers "large-cap value stocks, since over the long run, value beats growth."
"Staying with stocks that have a written dividend policy, and raise their dividends yearly," he discloses.
It was investing in mining stocks or, as he calls them, "holes in the ground into which you can pour your money."
One of Mr. Wood's interesting recommendations is that "you and your spouse should not retire at the same time." Financial experts, he notes, say a steep drop in income can be avoided if one spouse works longer; it can also be stressful to suddenly start spending all your time together.