Mark Seed, 36
Mark Seed, 36
Occupation: Process manager
Portfolio: Owns dividend stocks such as Bank of Montreal, Bank of Nova Scotia, BCE Inc., Enbridge Inc., Coca-Cola Co. and Johnson & Johnson; also owns exchange-traded funds such as iShares Dow Jones Canada Select Dividend Index Fund and iShares DEX Short Term Bond Index Fund.
The investor: Mark Seed got hooked on personal finance in his late 20s after reading David Chilton's The Wealthy Barber. He continued to educate himself and made a commitment to manage his own investments just over two years ago.
Why he prefers dividend-investing approach: "First and foremost, I consider myself a dividend investor who predominantly invests in established companies that have a history of paying dividends," Mr. Seed says.
He started investing in dividend stocks after taking a close look at the top-10 holdings of the dividend and income mutual funds he held at the time. "I noticed the top holdings rarely changed, if ever. This got me thinking that if these funds never sell these stocks, maybe I should become an owner and never sell them myself."
Almost all of his Canadian dividend stocks participate in a full dividend reinvestment program (DRIP). "Full DRIPs allow me to buy partial stock shares each quarter the dividends are paid," adds Mr. Seed.
Reasons for buying BCE shares include: lots of cash flow and a long history of paying dividends. Moreover, as a customer of BCE services, "I might as well own what I consume!"
He also likes index investing: "Secondly, I would also consider myself an index investor in my registered accounts. In these accounts, I like to hold exchange-traded funds because of the low management fees, low tracking errors and again, the dividends they offer." ETFs also save him time and effort: He does not have to become an expert on a wide range of stocks.
Best move: "Although my stomach churned at the time, I made my first Enbridge purchase in April, 2009, when equity markets were low. Looking back, I guess I made the right decision." (The stock is up more than 35 per cent from its $37 purchase price while paying a dividend.)
Worst move: "In my early investing years, I had all my retirement savings in a bunch of balanced mutual funds that weathered the dot-com financial storm well but didn't come bursting out of the gate after the market rebounded."
Advice: "As scary or as challenging as it might seem, learn to take hold of your personal finances."
Special to The Globe and Mail
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