Ever since I started making my own money, I was intrigued by the stock market and the fascinating stories about traders who buy and sell shares of companies and making profits.

So, I also dipped my toes in these strange waters of the share market. I got into day trading as a novice and had a little success. However, a stock market crash followed and day trading was not possible on my portfolio since all share prices that I owned had decreased in value. Selling these would generate a loss. I could not invest more money into the stock market, and potentially lower my average cost, since I was strapped on cash and the market did not look like it was recovering. So I held on, and on.

Fast-forward a decade, we are in 2020, I am finally making decent money from my 9 to 5 job, that I can start investing again. I liquidate my old portfolio and decide to jump ship.

Jump ship into dividend investing!

There are a couple of reasons to change course from day trading to dividend investing. First, day trading requires a lot of time spent on constantly monitoring the stock market. This is not very practical when I spend the stock market open hours at my regular 9 to 5 job. Without continuous monitoring, I am bound to miss out on daily trends in the market that I could capitalize on. This is, in essence, the whole act of a day trader.

Secondly, dividends are a little more reliable than waiting for market ups and downs. As long as the companies are doing okay, they will pay out dividends. Day trading involves taking advantage of market fluctuations of share prices, which is highly unpredictable.

Third, dividend investing allows me to grow my wealth exponentially with dividend reinvesting. Granted, day trading allows you to cash in big if you buy and sell at the right time. But for this profit to be of any significant size, your investment in it needs to be sizable too. I am not there yet. I am dipping my toes into dividend investing–not head on diving. So, I will be investing small amounts frequently and growing the dividend portfolio over time.

There are plenty more reasons relating to tax implications (in Canada) and convenience of tracking the progress, and finally, my preference.

My Dividend Portfolio Update: December 2020

This is my first month of dividend investing. So far, I have only made $200 Canadian dollars into my portfolio. My third investment of another CAD 100 is pending bank clearing and should be available for trade soon.

So, below is my dividend portfolio so far;

Company	Tick	No. of Shares	Purchase Price	Total Value
Keyera Corp.	KEY	4	$22.89	$91.56
Manulife Financial Corp.	MFC	4	$23.12	$92.48
Total				$184.04

The benefit of investing in 2020 is that the ongoing pandemic has scared aware investors and dragged the share prices down. Most shares are cheaper than what they were a year ago. So, on top of dividend income, you are grabbing these shares at a very lower cost. And in 2021, these share values are bound to recover. You will have an appreciation in your portfolio, should you decide to liquidate your investments, thus giving you a good chance of a profit/capital gain.

Some of the factors that helped me make my dividend investment decisions into these companies are stated below;

Keyera Corporation (KEY.TO)

Found in 1998, Keyera Corp. is one of the largest players in midstream oil and gas operators in Canada. The company has a market capitalization of $5 billion, hit by the pandemic and slowly recovering. Before March 2020, the share price of Keyera was around $35/share and in December, it trades around $25, recovering from a massive drop to $10/share in March.

Keyera Corp also comes with a solid reputation for high dividend yield (usually above 5%). Even though the pandemic hit, Keyera continued to pay out a dividend of $0.16 per share, all 12 months of 2020. That totals to a grand $1.92 per share. Assuming a share price of $25, the dividend yield is 8% per annum!

Not only does, Keyera flash fancy dividends, the company itself is propelling towards growth in 2021 with new projects, investments, and being environmentally friendly. So far, the company’s future outlook looks positive!

Manulife Financial Corporation (MFC.TO)

Founded in 1887, Manulife Financial Corporation is a giant in the insurance industry. With an asset base of $750 billion, Manulife Financial Corporation weathered the 2020 pandemic quite well. Although revenues are down compared to 2019, the company is on route to bouncing back in 2021. Further, the company boasts a market capitalization of over $43 billion.

Manulife, too, continued to pay a strong dividend payout throughout 2020. The company paid $0.28/share in all three quarters of the year so far. Assuming this trend continues for the fourth and final quarter, this signifies a dividend yield of nearly 5% per annum.

Just like Keyera Corp. share price, Manulife’s share price is also down right now. The stock price is down by about $5 compared to the beginning of 2020. On its worst day, the share traded at just $14, which would have been a steal. Still, my purchase price of $23/share is not too bad.

Next up…

With the next CAD 100 pending clearance in my trading app, I plan on purchasing either Pembina Pipeline Corporation (PPL.TO) or TransAlta Renewables Inc. (RNW.TO). The two stocks are trading at $22.19 and $19.30 respectively. Year-to-date, Pembina stock is down by about $5 per share. However, TransAlta has been having a stellar year and the stock price is higher by about $4 per share compared to the start of the year. Both companies boast a dividend yield of about 5% per annum.

While both of these stocks are quite attractive, I have not made up my mind on where my money should go next. TransAlta is expected to continue to appreciate its share price, and as an investor, you have two options: 1) jump on the rise and hope it continues to go up, or 2) wait for the share price to fall. For a dividend investor, this doesn’t impact a whole lot since they will be holding on to the shares for the long run. However, an investor should try to minimize the investment cost as much as possible.

So, this is a much longer post giving an introduction to my dividend investing journey and portfolio. In the upcoming monthly update articles, there will be much fewer stories and more direct-to-point content.

Catch you in the next one. Happy investing!

Disclaimer: I am not a licensed investment Advisor or Tax professional; therefore all content posted on this blog represents my personal views and opinions and should never be considered as professional advice.  This blog should be viewed for entertainment or educational purposes only; not a recommendation to buy/sell certain stocks.  Please do your own research before buying/selling stocks.