For many investors, the question feels timeless. Should I try to time the market, or should I focus on building reliable income through dividends?

In periods of market volatility, rising interest rates, or economic uncertainty, this question becomes even more pressing, especially for high net worth investors across Ontario, including Waterloo and Kitchener.

At the heart of this debate is a classic chicken and egg problem.
Do strong returns create reliable income, or does reliable income create strong returns?

This question sits at the centre of what Allan Bush refers to as The Chicken and the Egg Theory of Dividend Investing, a framework he has applied for years with clients through CIBC Wood Gundy, including families and business owners throughout Waterloo Region.

Why Market Timing Is So Tempting and So Risky

Market timing appeals because it promises control. Buy low. Sell high. Avoid the downturns.

In reality, even professional investors struggle to consistently predict short-term market movements, interest rate changes, geopolitical shocks, and investor behaviour.

Missing just a handful of the market’s best days can significantly reduce long-term returns. Those days often occur close to the worst ones.

For investors working with advisors such as Allan Bush at CIBC Wood Gundy, the risk is not just missing upside. It is introducing unnecessary volatility into capital that is meant to support long-term goals.

Dividend Investing and the Often Overlooked Advantage

Dividend investing flips the conversation. Instead of asking when to get in or out, it asks how a portfolio can work consistently over time.

Dividends provide predictable income, a tangible return regardless of short-term price movement, and the ability to reinvest during market downturns. They also create a psychological anchor that helps investors stay disciplined during volatile periods.

Over time, reinvested dividends can meaningfully contribute to total return, often more than investors expect.

The Chicken and the Egg Theory of Dividend Investing

Allan Bush’s Chicken and the Egg Theory challenges a common assumption. Many investors believe strong price performance must come first, and income follows later. The theory suggests the opposite may also be true.

When dividend income is consistently reinvested, it increases share ownership, compounds quietly over time, and reduces reliance on perfect market timing. Income becomes an active participant in portfolio growth, not just a byproduct of it.

This philosophy has guided portfolio conversations for clients of Allan Bush CIBC and CIBC Wood Gundy Allan Bush across Waterloo, Kitchener, and surrounding communities.

Why This Matters for High Net Worth Investors

As portfolios grow, investment priorities often evolve. The focus shifts from accumulation alone to sustainability, tax efficiency, income planning, and capital preservation.

Dividend-focused strategies can support retirement income planning, philanthropic goals, and intergenerational wealth transfer. They also tend to create a smoother investment experience across market cycles.

For many families connected to the Waterloo community, including those involved in local sports organizations such as KW Lightning basketball, disciplined investing mirrors the same values seen on the court: patience, teamwork, and consistency.

A More Grounded Question to Ask

Instead of asking what the market will do next, a more useful question may be: How can my portfolio support me in both strong markets and challenging ones?

For many investors in Waterloo and Kitchener, the answer lies not in prediction, but in participation. Allowing income, discipline, and time to do the heavy lifting.

Things to Think About

Wealth is rarely built through perfect timing. It is built through thoughtful structure and strategies that work across cycles.

Understanding how dividend income and long-term growth reinforce one another, as outlined in the Chicken and the Egg Theory of Dividend Investing, can be a powerful step toward a more resilient approach to wealth management.