# Dividend investing vs passive investing



## gibor365 (Apr 1, 2011)

When about 4-5 years ago I started DIY investing, i was in doubt(actually I'm still in doubt ) what approach to implement: dividend investing or passive (index) investing.... so , like MOA, I selected "hybrid" approach, i hold some dividend stocks and some index ETFs....
Now I did approximate calculation which approach is better, for simplicity I just calculated returns on 2 LIRAs (no new contributions), but likely results would be similar for whole portfolio.
Thus, if 3.5-4 years ago, I would start passive index investing (as per canadiancoachpotato.com) simplest portfolio, my return would be just 4-4.5% (in total) less than I have now , so it's just A bit higher than 1% annualized.

So, I'm questining again ... what approach is better 
Is anybody from dividend investors's camp compared their return to passive indexing for a long term?

P.S. also compared to just one ETF XDV (remember somebody recommended to invest all in it ), probably because of junky CAD$, i outperformed XDV by 7% annualized...


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## cainvest (May 1, 2013)

gibor said:


> i hold some dividend stocks and some index ETFs....


I started branching out from pure index to include dividend funds (only ETFs right now) for my CDN assets, kind of a hedge against a sideways/down turning market. Also, recent history (5 yrs) shows the returns (CDN side) are better than the indexes so I decided to expand into them. What the future returns will be really depends on what the market does .... so who knows.


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## fatcat (Nov 11, 2009)

here we go again ...

i suspect most people use a mix of both, i certainly do

both work well enough if the person sticks to a disciplined plan

they appeal to different personalities, different temperaments


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## gibor365 (Apr 1, 2011)

From what I see, my dividend income (I DRIP or buy other stocks right now) got increased substantially (yes, some stocks I hold -and it's mostly very small positions (BTE, CPG, LRE, TPH)) suspended dividends, but others increased) .... but index appreciation is better than my dividend portfolio...
Also, when I retire and switch to RRIFs/LIFs, with dividend portfolio , I just turn DRIP off and withdraw required minimum, and with passive index investing I will neeed constantly to sell assets. And with index investing, I practically eliminate REITs and other UNs 
So, I'm still in doubt....



> they appeal to different personalities, different temperaments


 this is the problem..... for me it changes day-to-day  . Now I'm working , so sometimes don't have time at all to follow my portfolio.... on other hand, when i retire, I can be one of the hobbies...  .
Now my portfolio about 25% indexed ... the question what to do with new money.....



> i suspect most people use a mix of both, i certainly do


 not sure it's true... just know many bloggers, half - 100% index investors, half - 100% dividends.....
MOA is the only exception lol


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## cashinstinct (Apr 4, 2009)

Index investing is yielding around 3% for now in Canadian / International markets, around 1-1,5% for US or emerging markets.

It could reach higher % on your cost.

you get distributions from index investings, you don't necessarily need to sell, depending on how much you need.


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## gibor365 (Apr 1, 2011)

> you get distributions from index investings, you don't necessarily need to sell, depending on how much you need.


 not really depends on me... there are RIF/LIF withdrawal minimium


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## cashinstinct (Apr 4, 2009)

gibor said:


> not really depends on me... there are RIF/LIF withdrawal minimium


well it's the same issue with dividend stocks, if the yield is less than your withdrawal minimum, you will need to sell some stocks too.


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## My Own Advisor (Sep 24, 2012)

I think many/the majority of investors have a mixed bag of investments gibor, probably too much of a mixed bag!!

I would think (although I don't know for sure), there are very few pure indexers. They would be the rarest breed. 

I also believe there are very few, strict dividend investors (who don't own any ETFs, or other financial products).

To answer your question, I recently wrote how I manage my DIY portfolio here:
http://www.myownadvisor.ca/how-i-manage-my-diy-stock-portfolio/

"I do not constantly gauge how well my DIY stock portfolio is performing to a relative benchmark other than maybe to check this one or two times per year. For the last five years I’ve obtained an annualized return just above the annualized return of the TSX Composite Index. (This is not surprising since I own most of the largest companies in this index.)"

I honestly don't follow my portfolio very much. I don't feel I need to. Besides, I'm reading CMF, MMM Forum, G&M and other sites too much. I don't have the time!


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## cashinstinct (Apr 4, 2009)

I am a pure indexer, no stocks.... I had some stocks in 2006-2008 but sold them all to replace them with ETFs.


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## gibor365 (Apr 1, 2011)

> I would think (although I don't know for sure), there are very few pure indexers. They would be the rarest breed.


Just from blogs ...Dan from canadiancoachpotato or Andrew Hallam are pure indexers, Dividend mantra , dividends4life, dividend growth investor are pure dividend investors


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## Moneytoo (Mar 26, 2014)

cashinstinct said:


> Index investing is yielding around 3% for now in Canadian...


True - I'm even considering to double or even triple our Canadian index ETF position! (Currently it's ~1.2% of our combined portfolio lol)

We'll stay the course for the time being: mostly stocks for Canadian portion, about 50/50 for US, mostly index ETFs for international. Most of our dividend stocks are down (some a lot), but we started buying them last year near their highs - and now learned the lesson that entry points are very important...

Too bad my husband's PT TFSA transfer didn't make it in time for this correction (the goal is to increase our equity exposure to 90%) Oh well, hopefully it's not over yet and we'll have another chance to load up on indexes at good prices


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## uptoolate (Oct 9, 2011)

Pretty much a pure indexer here. I own one stock, RY, but it is a very minor holding. TSX hasn't done much but my largest holdings are IVV and VTI. VTI is almost 16% annualized over the last 5 years plus another 25% on the USD strength. Everything has its season, TSX will come back when commodities get going again. And bonds... well who knows but it's all about diversification for me.


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## GreatLaker (Mar 23, 2014)

I am a strong believer in indexing. I have some GICs as part of my fixed income. But excluding that, >95% of my portfolio is indexed. Other than the GICs, my only non-indexed investments are a small amount of company stock in an ESOP and Mawer Tax-effective Balanced fund, which is for a lump sum I want to keep separate from my main portfolio (mad money). Dividend yield of the ETF portfolio is around 2%. Could be higher but I have some HXT in my non-registered account to defer taxes.

Lots of reading of articles by Larry Swedroe, Rick Ferri, Dan Bortolotti and William Bernstein have convinced me that relying too much on dividends leads to a portfolio that is concentrated and somewhat risky. Plus I don't have the patience to try to pick stocks.

I saw a comment recently that looking at the past 20 years, high dividend paying stocks have performed better than the total market. The trick is to choose the high dividend paying stocks today that will have superior performance over the next 20 years.


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## Canuck (Mar 13, 2012)

100% Dividend stocks. No ETFs


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## Echo (Apr 1, 2011)

I was a dividend growth investor from 2009-2014 and then I switched to pure indexing (just two ETFs: VCN and VXC) in January of this year. I tracked my returns and compared them to an equivalent ETF benchmark. While my stock portfolio did beat the benchmark over the five years, I decided that was more due to luck than skill. I also just held Canadian dividend stocks and so now my portfolio is much more diversified (over 3000 stocks from around the globe with just two ETFs).

http://www.boomerandecho.com/my-2014-and-final-portfolio-rate-of-return/


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## treva84 (Dec 9, 2014)

gibor said:


> Also, when I retire and switch to RRIFs/LIFs, with dividend portfolio , I just turn DRIP off and withdraw required minimum, and with passive index investing I will neeed constantly to sell assets.


While this is true and I don't disagree, to get the same annual income from dividend stocks your portfolio needs to be larger, as you're not drawing down on your assets. 

So for example, lets assume you have an average of 4% yield and you want to live on 80k a year in retirement - that would mean you need at least 2 mill in dividend stocks. And then when you die, you leave that money to your estate and are hit with a massive tax bill (you may not care, as you are decreased). 

However if you have index funds and you're selling your positions to fund your retirement you need far less money. The trade off, of course, is you need a plan to make those assets last. 

To answer the question posed, I do both. I've been indexing since 2013 and then this year I started buying a few divvy growth stocks (just on the TSX) to see how I like it. I have not compared my returns as I think the time frame isn't long enough (8 months!)

So far, I greatly prefer indexing. Emotional buys aren't an issue with indexing but they can be with individual stocks. Also I find it very hard to diversify with divvy growth stocks on the TSX as most of them are either financials, utility or commodity based (but that's like 80% of the TSX as well). I have yet to branch out and buy individual stocks from the NYSE, perhaps next year? My biggest difficulty with stock picking to date is trying to determine how much a company is worth and if the current price is reasonable or over valued. I bought Atco earlier probably overvalued and it's since burned me (but, don't need to sell anytime soon). With indexing, you don't need to really worry about that stuff.


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## gibor365 (Apr 1, 2011)

> Also I find it very hard to diversify with divvy growth stocks on the TSX as most of them are either financials, utility or commodity based (but that's like 80% of the TSX as well).


 This is also the point... I also hold TSX index ETFs, but my Canadian dividends stocks has more diversification than XIC or XIU



> So for example, lets assume you have an average of 4% yield and you want to live on 80k a year in retirement - that would mean you need at least 2 mill in dividend stocks


 not really true... first of all, my core stock YOC is higher than 4%, for example mo 8.7, T 6.8, ry 5.3, bce 7.3, jnj 4.95 and I bought them 4 years ago, very likely they will continue to increase dividends....
also, except stocks, we have 40-45% in HISA and GIC - so interest + some cash spensing will help. And lastly, at some point we start receiving CPP and DCPP (my wife`s), than OAS... so probably dividend stream will be enough without having 2 mil


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## My Own Advisor (Sep 24, 2012)

@treva84,

Fair points...re: if 4% yield and you want to live on $80k a year in retirement - that would mean you need at least 2 mill in dividend stocks. 

The thing is, equity returns going forward (I don't think) will not be what they were over the last 20-30 years. Economic growth is slowing worldwide; this is partly due to a demographic shift. This will continue. Investors may be forced to sell at an inappropriate time in retirement especially with bond yields to potentially remain low for decades.

I simply don't want all my eggs in the low yield equities, low yield bonds basket.

Besides, you get $1 M in the bank with dividend stocks (say $40k per year to use your 4% yield), most of that can be tax-efficient with the dividend tax credit, a good portion could be tax-free (TFSA) and with CPP and OAS on top of that, a retiree is _living pretty well_ IMO as long as they are debt free. Just my $0.02.

Lastly, who doesn't like to get a raise while doing absolutely nothing?
RY and CIBC raised dividends this week.
Enbridge will raise their dividends this fall.


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## treva84 (Dec 9, 2014)

My Own Advisor said:


> @treva84,
> 
> Fair points...re: if 4% yield and you want to live on $80k a year in retirement - that would mean you need at least 2 mill in dividend stocks.
> 
> ...


You and Gibor raise valid points. I won't comment on the expected future returns of equities and the effect that selling boomers will have; I don't really like to speculate 

I do own RY though as part of my divvy explore portfolio and you are right, it does feel nice to get a dividend raise for doing nothing. I guess the question that remains to be answered is what is the real total return for both (dividend growth; indexing) strategies moving forward.


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## My Own Advisor (Sep 24, 2012)

Correct, the $64,000 question for all investors...or more(!): 

in the future...will a collection of stocks you (I) select (paying dividends or not) earn more total return than the total return of the indexes those stocks are held within?

I have no idea, so I employ both strategies. So far, more than 5+ years in, it's working for me. Over 20+ years, well, we'll see!


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## Freedom45 (Jan 29, 2011)

Like most, I fall somewhere in the middle. 45% of my portfolio is comprised of index ETF's. The remaining 55% is individual stocks, most of which are dividend oriented choices.


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## Eclectic12 (Oct 20, 2010)

GreatLaker said:


> ... Lots of reading of articles by Larry Swedroe, Rick Ferri, Dan Bortolotti and William Bernstein have convinced me that relying too much on dividends leads to a portfolio that is concentrated and somewhat risky. Plus I don't have the patience to try to pick stocks ....


For a large market such as the US ... maybe. For any market, I can see the patience part.

For a small market like the TSX ... exactly how does one go about investing in say banks or pipelines that *don't* pay dividends?
There are whole segments where choosing to avoid dividends at best means going with smaller players that are starting out or at worst, avoiding the area.

I seem to recall a post that when looking at the S&P500, only something around 25% of the stocks did not have dividends. 
Chasing risky dividends is bad IMO but so is avoiding sectors or bigger players simply because they do.




GreatLaker said:


> ... I saw a comment recently that looking at the past 20 years, high dividend paying stocks have performed better than the total market. The trick is to choose the high dividend paying stocks today that will have superior performance over the next 20 years.


What's the definition of "high dividend paying"? 

As I understood it, unless one is identifying a bargain properly - high dividend payers were more likely to have bigger risks attached. For example, buying TransCanada after they'd cut their dividend and implemented a "get rid of non-core business" had more risk attached to it at the time.

From the checking I did for the "Gold performed better than the TSX" thread - some of the dividend stocks that beat both Gold & the TSX index I would not have called "high dividend" types. I'd have to go back to check but I seem to recall Metro, Agrium & Enbridge being a few examples. I seem to recall most of the banks being on par with Gold and well above the index. 

It would also be interesting to check Sobey's and Ipso but they were both bought out so I'm not sure I held them long enough for the comparison with Gold timeline.


IAC ... these were all in the top ten holdings of most funds so it's not like a small market like the TSX offers a ton of choices.


Cheers


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## Eclectic12 (Oct 20, 2010)

treva84 said:


> While this is true and I don't disagree, to get the same annual income from dividend stocks your portfolio needs to be larger, as you're not drawing down on your assets.
> 
> So for example, lets assume you have an average of 4% yield and you want to live on 80k a year in retirement - that would mean you need at least 2 mill in dividend stocks.


Where everything is in the RRSP, it's the sole source of retirement income and nothing's been held a long time with flat dividends ... sure. 
How many who can put away $2 million (or something less and grow it reasonably) are going to skip using a TFSA, taxable investments and have no other source of retirement income?
I'm thinking not many. 




treva84 said:


> And then when you die, you leave that money to your estate and are hit with a massive tax bill (you may not care, as you are decreased).


Maybe ... but then again, if one's spouse is the beneficiary, it may rollover tax deferred. If the high earner dies first (as happened to my parents) then the RRSP may be able to be drained quicker at a lower tax rate. At this point, mom's outlived dad for almost as long as he's been retired.

Then too, if the TFSA is being stuff, it goes mostly tax free or completely tax free over the beneficiary.

Or ... as mom has done, she's decided she has more than she needs so she's paid the tax at her lower income rate and gifted money over to us kids.




treva84 said:


> However if you have index funds and you're selling your positions to fund your retirement you need far less money. The trade off, of course, is you need a plan to make those assets last.


I'm not following ... whether one gets $80K out of the RRSP from dividends or from a combination of distributions/selling index funds - one is still withdrawing $80K to live on.

[If one was successful getting the $80K from dividends, then the sell commission likely means one needs a bit more.]




treva84 said:


> To answer the question posed, I do both.


Same here ... I didn't want jump into stock picking with retirement money from a DB pension.




treva84 said:


> So far, I greatly prefer indexing. Emotional buys aren't an issue with indexing but they can be with individual stocks.


Interesting that the product deals effectively with your emotions ... those I've talked to who sold in the fall of 2008 sold both to move into GICs. 



Cheers


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## gibor365 (Apr 1, 2011)

> How many who can put away $2 million (or something less and grow it reasonably) are going to skip using a TFSA, taxable investments and have no other source of retirement income?


 you don't put away 2 mil right away, but you hoping to reach it with proper investments 
Agree about TFSAs, but we don't have any taxable investments (except HISA/GIC) and not planning to have it in foreseeble future ... 20K in TFSA plus max possible of RRSP room every year (for both of us) plus RESP is exactly enough for us to keep cash portion of at least 40%... also we have LIRAs....
so far with our cash , moving money from bank to bank, we easily beat inflation....
P.S. The problem can be if NDP/LIBs reverse TFSA limits than we'll have too higher cash allocation... but maybe those guys will increase RRSP limits or CPP ... in the worst case, I goona "borrow" cash to my kids TFSAs while they are students and may not have enough cash to max up TFSA


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## RBull (Jan 20, 2013)

Eclectic12 said:


> For a large market such as the US ... maybe. For any market, I can see the patience part.
> 
> For a small market like the TSX ... exactly how does one go about investing in say banks or pipelines that *don't* pay dividends?
> There are whole segments where choosing to avoid dividends at best means going with smaller players that are starting out or at worst, avoiding the area.
> ...


Pretty much agree with what you're saying although to me there is a difference between "relying too much on dividends" and "avoiding dividend payers". I infer relying too much on dividends is looking only at the higher dividend payers that may have less growth potential or dividend sustainability risk. You're right in Canada many companies on the TSX pay dividends although the same thing may apply if someone invests purely in highest yielding stocks without considering other factors. 

Not so sure about Sobeys being bought out. Empire (started by Sobeys family) has owned them for many years and recently bought out Safeway to build the Sobeys brand in Western Canada.


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## Eclectic12 (Oct 20, 2010)

gibor said:


> you don't put away 2 mil right away, but you hoping to reach it with proper investments


I don't think you will need to either ... especially if you are using TFSAs where every $ paid can be spent without taxes creeping into the picture.

I guess a better way of putting it is why would someone with the investing smarts and cash flow to fund so much skip the tax benefits of the TFSA?



Cheers


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## Eclectic12 (Oct 20, 2010)

RBull said:


> Pretty much agree with what you're saying although to me there is a difference between "relying too much on dividends" and "avoiding dividend payers".


Isn't "relying too much on dividends" moot when for the tier I and most if not all of tier II banks pay dividends for Canadian banks?
Sure ... one can get caught preferring a particular bank based on a bigger dividend but with basically none of the big ones offering shares that are capital gains only, it seems a waste of energy to be talking about wanting to avoid dividends when there is no choice.




RBull said:


> Not so sure about Sobeys being bought out. Empire (started by Sobeys family) has owned them for many years ...


I bought my shares on the TSE sometime after Empire had spun out around 28% as public shares. Later on, Empire re-bought what they didn't own to take Sobey's private again.
http://www.cbc.ca/news/business/empire-to-take-sobeys-private-in-1b-deal-1.638028

I don't recall it being as rich a buyout as Ipsco but I recall it being a nice profit. The article says the offer was at a 58% premium compared to the trading numbers.

Hudson's Bay is another I did well with when it was bought in 2006. It re-listed in 2012.


Cheers

*PS*

As an aside, TD bank made a bundle spinning out a percentage of TD Waterhouse Canada onto the TSE for a debut price of $24 a share. The initial offer to take it private again was for $9 a share, two years or so later. 
http://www.cbc.ca/news/business/td-bank-to-take-td-waterhouse-private-1.281141


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## GPM (Jan 23, 2015)

100% indexed equity, my mortgage as my only bond - 6.25%. Why not I was happy paying way more than that when I graduated and can afford it? Grows my RRSP like crazy. Would've gone 6.75, but I didn't know you could do 22 year mortgages. I'll buy an annuity, if rates are ok, and index 100% of the rest with a cash/gic wedge at retirement. ALWAYS tempted by dividends and live off them, but I bought permanent life insurance at 30 and a big house for the kids to have a tax free inheritance. Insurance, before kids, was a scam, but fit in nicely in the end and has a 9% return if I die at an average age. Not going to, so my insurance may be the best pick of my portfolio. I'm spending/gifting/donating the rest, not living off dividends. Besides, I love investing, but picking stocks is something I'm not going to trust myself to do at 75! I don't bother exploring, because I'm lazy. Likely a fruitless adventure to me.
Canadian Couch Potato compares the two methods of retirement on his blog.
Pure investor? Ben, Charlie, Warren and Sir John might disagree.
Also, too many valid ways to invest. Do what you are comfortable or good at. I like indexing because it's backed by research and simple. No other reason.


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## gibor365 (Apr 1, 2011)

Ran numbers for 2014, 2015, and YTD ... my mostly dividend portfolio vs portfolio just with 4 ETFs one : VSC, XIC, SPY, VEA (without any relocation) .
Returns for both are practically identical... Still not sure what is preferable


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## Eclectic12 (Oct 20, 2010)

Is there a difference?

When I checked the TSX Composite, something like 70+% of the index are dividend paying stock. I'd have to check again but I believe the S&P500 index has a higher percentage of dividend paying stock.


Cheers


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## treva84 (Dec 9, 2014)

Eclectic12 said:


> Interesting that the product deals effectively with your emotions ... those I've talked to who sold in the fall of 2008 sold both to move into GICs.


Over the last 6 months this is something I've tried to address. Specifically, with stocks, it's not fear that drives me but exuberance / greed / euphoria that comes with rising markets. I want to get in on the ride, regardless of the price, which had led to me buying over-priced stocks in the past. Back in 2014 (which is when I first started buying stocks, after indexing for many years) I didn't have a good handle on how to properly do a valuation for the stock price of a company. This is something I worked on addressing (i.e. learned more about it) and I feel like today I have a better handle on recognizing whether or not something is priced attractively. 

This has led to me largely controlling my emotional buys, because I have objective measures that help me to determine whether or not something is worth buying today, vs waiting until tomorrow (for stocks specifically). For my index funds, I continue to DCA with fixed contributions, regardless. I haven't sold any equities / index funds since I started investing - just some bond holdings to move into more equities. 

Do I still prefer indexing? I think so - it's lower maintenance, knowledge gaps don't exploit me, and it's boring so I don't compulsively check my share prices and company quarterly reports to read about dividends. I literally set it and forget it and check my account balances every 6 months when I do my family net worth re-assessment.


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## My Own Advisor (Sep 24, 2012)

FWIW, I asked Millionaire Teacher (Andrew Hallam) some questions about my 'hybrid' approach to investing. Stay tuned for the interview on my site this week. I liked his answers. 

For the foreseeable future I will continue to use a mix of CDN and US stocks, then keep DRIPping my indexed products for extra diversification.


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## gibor365 (Apr 1, 2011)

> For the foreseeable future I will continue to use a mix of CDN and US stocks, then keep DRIPping my indexed products for extra diversification.


 I also have this kind of "hybrid" portfolio  and for know not planning to do drastic changes.... however, probably after I laid off/retire, probably I will open second RRSP (after transfering existing GRRSP from GWL) and will be doing passive index investing only there


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## Eclectic12 (Oct 20, 2010)

Is there some advantage to opening the second RRSP?

Maybe one that allows ETF buys for free?


If there isn't an advantage, why not keep the records simple by transferring the Group RRSP into the existing RRSP? Nothing stops you from allocating whatever you want to whichever style.


Just a thought ...


Cheers


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## gibor365 (Apr 1, 2011)

imho, I'll get free trades regarless opening the mew one or existing.... if IE won't give me free trades I might open it in another brokerage . but this is different story...

I was thinking to open 2nd RRSP in IE, as it would be much easier to manage passive indexing (in the 1st one I have "hybrid" portfolio). Also is I'd like to convert first RRSP to RRIF, I can leave 2nd as RRSP and continue contributions just in case


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## protomok (Jul 9, 2012)

I track investment return every year using XIRR for each account for myself and the wifey. I don't specifically track our index performance vs dividend performance but I would estimate that index funds outperformed the dividend stocks 4/5 years. And in the last 2 years the index funds significantly outperformed the dividend stocks.

Every year I've been switching more and more investments from dividend paying companies to index funds.

At this point I just lump the "dividend strategy" with all the other individual stock picking strategies. For those who are fortunate to pick the right stocks you can make some nice returns but I'm not convinced the dividend strategy will outperform the market over the long term.

This is particularly noticeable during the current energy crash where dividend paying stocks got hit pretty bad and in many cases will be going bankrupt or sold for next to nothing which is not a concern when indexing.

But hey, maybe I'm just biased after watching my O&G stocks crash!


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## Eclectic12 (Oct 20, 2010)

Re: Open second RRSP

I am sure other posters have indicated that one can leave part of the $$$ as RRSP and convert part to RRIF, up until the age deadline.

But if the broker will assign a new number and allow it where that is what you want ... go for it.


Cheers


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## Eclectic12 (Oct 20, 2010)

protomok said:


> ... For those who are fortunate to pick the right stocks you can make some nice returns but I'm not convinced the dividend strategy will outperform the market over the long term.
> 
> This is particularly noticeable during the current energy crash where dividend paying stocks got hit pretty bad and in many cases will be going bankrupt or sold for next to nothing which is not a concern when indexing.
> 
> But hey, maybe I'm just biased after watching my O&G stocks crash!


I suspect it is the bias ... I have some O&G that has been hit hard, had dividends cut but the bulk of the rest have increased their dividends and been fluctuating at a narrow range or gained compared to the O&G drop.


Cheers


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## gibor365 (Apr 1, 2011)

[


> But if the broker will assign a new number and allow it where that is what you want ... go for it.


 I don't think brokerage will resist... I'm working in company that developes soft for Mutual funds companies and we can open even 10 RRSPs on the same investor number...I've hear that "can leave part of the $$$ as RRSP and convert part to RRIF", but it looks simplier with 2 RRSP accounts


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## james4beach (Nov 15, 2012)

The TSX Composite (say ZCN) already pays a ton in dividends. Surely there is not any real difference between holding a basket of "dividend paying stocks" versus ZCN? This fund *is* a basket of dividend paying stocks. I still don't understand why bother go out and hunt for dividend stocks to make up your own portfolio when you get a whole index, that's also chock full of dividends, at only 0.05% management fee.

I understand that the goal of picking dividend stocks is to achieve a better total return than ZCN. That's a tough goal to achieve.


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