At the Allan Bush Investment Team, our investment recommendations have been consistent for decades and have worked well through all market cycles. We firmly believe that investing in vehicles that provide cash flow while you hold them helps provide consistent value through market ups and downs. We often look to dividend-paying stocks, as they make regular distributions to their shareholders and can be useful sources of income. The historical returns provided on many dividend stocks have proven to be an excellent way of increasing wealth over the long term.

Dividends have historically been much less volatile than the stock prices themselves, and in times of market volatility, owning stocks that pay dividends can help offset the negative impact of negative market returns. Much of 2022 hasn’t been pretty for equity markets, with many stalwarts coming off 6-15%. Buying equities with attractive dividend yields has helped to offset these drops by paying investors to own the stocks. For example, BCE’s quarterly dividend payout of $0.92/share hasn’t wavered, and the “relative yield” has gone up due to the drop in the stock price. Couple this with investors’ tendency to flock to relative safety in uncertain times, and you get another potential tailwind to help offset the lowering stock price.

Having positive cash flow despite a drop in stock price continues to work toward achieving financial planning goals. While there is no magic solution to eliminate the price volatility of the equity markets, the consistency of positive cash flow can provide investors with a real and tangible return to go along with the perceived positive experience of receiving actual cash or additional shares.

Dividend-paying stocks can help provide predictable income,  reduce risk and contribute to generating potential profits without selling. We remain steadfast in our beliefs, knowing that our investment philosophy has helped our families enjoy financial peace of mind over the last 30+ years. For this and any other questions you may have about your financial plan, we’re always here.