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MY updated annualized returns since 2013

I am very proud of my performance in terms of Total return since 2013. See below

the last 2 lines are the S&P 500 benchmark in CDN$ and US$, line 1& 2 are very recent accounts and it is normal that at this stage of the bull market I don’t get the same returns.

one of my account beats the S&P 500 by over 12% on average since 2013, which is for me a very big accomplishment. It really proves that if you do your homework professionally you can get much better results.

total return since 2013

1 picture to show the pace of tech evolution

This is the picture of the 1st iphone vs the most recent one. Beyond the the parts improvements in terms of performance, one can clearly understand the thirst of the world for better and faster technology to support the exchange of information.

As an investor you then understand that the tech sector has still a good foundation for growth and will definitely see good cash flow progression on balance sheets of large cap companies like Microsoft, Apple, Google etc…

I am myself overweight in tech 🙂

 

iphone 2007 vs 2017

Yield on cost is key to let your winner stock run

yield

When you are able to buy a stock at a fair value with a solid track record of dividend increases, you can end up with very good total return and the concept of yield on cost helps you with that.

Simply put, yield on cost measures the rate of dividend income your original investment earns today. Put another way, yield on cost is essentially the dividend yield based on your initial investment in a stock.

If a company increases its dividend after you purchased shares, you will enjoy a higher rate of income return on your original investment – your yield on cost rises.

Dividend investors like tracking the yield on cost of their holdings to see the power of consistent dividend growth. It is exciting to see an investment literally begin to pay for itself with higher dividend income over time.

Let’s try an example. Suppose I bought 50 shares of Colgate at $55 per share. The stock currently trades at $70 and pays annual dividends of $1.56 per share.The company’s dividend yield would be 2.2% ($1.56 per share in dividends / $70 current stock price).However, my yield on cost would be 2.8% ($1.56 per share in dividends / $55 cost basis per share).If Colgate raised its dividend by 8% to $1.68 per share, my yield on cost would rise to 3.1% ($1.68 per share in dividends / $55 cost basis per share).

Yield on cost increases when a company raises its dividend and decreases when a company cuts its dividend.

The key element in this logic of dividend growth investing is to be patient and let your winning stocks run. Very often investors pull the sell trigger to soon and buy stocks of average quality.

Be patient and let the compounding do the work

In One of my accounts I bought Appl shares at a 65$ cost basis in 2013. Current yield is 1.57% (2.52 $ dividend per year @ 160$/share) , but my yield on cost is amazing !!! it’s a whopping 3.87% (2.52$/65)

 

nobody got into trouble paying down debt

mortgage freeI knew with this bull Market that started in 2009 that there would be a time I would consider paying down my mortgage faster. I have decided that at this point in 2017, it became a good option.

Now let’s be clear, it doesn’t mean I am not going to buy any stocks going forward, it just means the percentage of my investment allocation is not going to be the same. Yes my current mortgage rate is only 2.7% for the next 5 years. And there is a good chance I could get a better total return in the long run with my cash.

However there is a bigger motivation for me and that is the flexibility of my daily cash flow. If you ask anyone if they would like to have a debt load diminished by 30% (or more depending of how much your mortgages payments take of your home pay of there monthly expenses): the answer will be a yes sir!!!!

Being mortgage free allows you to take off financial stress. It allows you to take unpaid holidays, work part time…. you name it. It’s a tool to add flexibility to your life. My current portfolio will grow over time anyways. Valuations have become high enough for me to acknowledge and practice the quote of the day.

 

 

NOBODY GOT INTO TROUBLE PAYING DOWN DEBT.

261.5 Billions on cash balance

Sometimes you’re just trying to understand what this staggering figure could mean. To Give you an Idea Apple could buy every single Professional team in the following leagues

NFL/NBA/NHL …. and would still have some extra cash to invest in their business. What’s even more impressive is that with 1 Billion iOS users with a retention rate of 92%, you’re looking at a very stable and recurring income stream. Eventually I believe Apple will have to deploy this mountain of cash and it will be interesting to see how they will grow their business.

 

cash reserve

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