Is there no end in sight to market volatility?
How will history remember the last years of the Twentieth Century and the dawn of the New Millennium? The events of 9/11 will overshadow our times – no question there.
From a capital markets perspective, we will remember the Tech Bubble, the Financial Crisis of 2008, and its aftermath, particularly in Europe, but affecting the global economy.
It is an era when capital appreciation in the stock markets has been elusive. For example, the annualized 5-year return for the S&P/TSX Composite Index is a paltry 1.3%.
It has caused pension fund investment officers to lose faith in the public markets, opting for alternative strategies such as investing in real estate or undertaking direct infrastructure investments. While effective, the opportunities for these strategies are limited to all but the large public sector pension funds.
The Dividend Investing Solution
It is hard to pick up a newspaper these days without reading about the benefits of dividend investing. With 10-year Canada bonds yielding less than 2%, and dividend yields of high-quality Canadian companies at 4%, it is difficult not to believe in dividend investing. Further evidence can be seen as financial institutions rush to introduce new dividend investing products.
For more than 70 years Leon Frazer has been investing in companies that grow their dividends. It is central to their investment beliefs. They do not waver in this belief – they have not wavered in this belief.
The Leon Frazer approach is simple. The hard work is in the discipline of sticking to “your knitting” over seven decades. That process and its discipline may have its roots in the dark days of World War II, but it is a strategy that is right for 2012.
“The amazing thing about dividend stocks in Canada is that you can have better returns with less volatility,” says Leon Frazer portfolio manager Ryan Bushell. “You can have your cake and eat it to.”
Other articles by this author
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