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This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. For a list of the stocks for which I have put up spreadsheets on my web site click here.
Wednesday, August 22, 2012
I made a spreadsheet when I started this article. I have put it on my site. If you want a copy of this spreadsheet, just email me. This spreadsheet, because it is using formulas smooth out dividend increases. However, dividend increases are really lumpy, not smooth.
I have put on my spreadsheet what I think the likely growth in dividends would be based on what has occurred over the past 5 and 10 years. I have also included a line with growth that I have experienced with the particular stock.
For dividends yields on original investments nothing seems to beat the banks with their good dividends and good dividend increases. With the Royal Bank (TSX-RY) after owning it for 17 years, I have a yield of 31% on my original investment. My original yield on this stock was 4.13%. SNC-Lavelin (TSX-SNC) has not done badly. I started with a 2.35% and currently, after some 14 I have a yield on my original investment of 25.9%
I had at one time hoped that companies with low dividend yields, but high dividend growth would produce great dividend yields on the original investment. However, if you had bought Saputo stock at an average price in 1997 (15 years ago), when it was first issued, your dividend yield on your original investment would only be 11.2%.
The thing is that to beat the good growth, good dividends of banks with a lower dividend yield, the company would have to grow very fast. The problem is that fast growing companies do not maintain that fast growth over the longer term. At some point fast growing companies turn into mature companies and growth slows down.
Thursday, May 24, 2012
Some companies pay monthly, especially the old income trust companies, but there are fewer and fewer of these. A few pay semi-annually. Some companies are consistent in what months their dividends are paid, some are not. Most annual reports show what dividends have been declared in a year, not what dividends they have actually paid. (What a company declares in a year and what they pay in a year may or may not be the same.)
As a shareholder you want to know what you actually get paid and when. It can get confusing.
For dividends, you have a declaration date, ex-dividend date, dividend record date and dividend payment date. The declaration date is the date a company declares it will pay a dividend. The ex-dividend date is 2 business days before the dividend record date. (Most charts that give dividend information use the ex-dividend date.) The dividend record date is date that if you are the shareholder of record you will get the dividend. The dividend payment date is the actual day the dividend is paid.
In the following notice, August 3, 2011 is the Declaration date. The ex-dividend date is August 25, 2011. The dividend Record date is September 15, 2011 and the date the dividend is paid is August 29, 2011. This puts the dividend payment into cycle 3.
The notice: “TORONTO, ONTARIO--(Marketwire - Aug. 3, 2011) - Russel Metals Inc. (TSX-RUS) announced today that it has declared a dividend in the amount of Cdn$0.30 per share on its common shares, an increase of 9% over the prior rate. The dividend is payable on September 15, 2011 to shareholders of record at the close of business on August 29, 2011”.
When you are buying or selling a stock, it is the ex-dividend date that you should look at. This is the date used in determining who gets the dividend.
The thing is, some companies pick a cycle and stay with it. Others do not. A company may pay some dividends in cycle 1 and some in cycle 2. Some may pay in Cycles 2 or 3. Some may pay in cycle 3 or 1. If a company pays dividends sometimes in Cycle 3 and sometimes in cycle 1, you can get a situation where one year has 3 dividends and the next year has 5 dividends. However, you do get all your dividends in the end.
As I said about, the annual reports do not help in this as they using show dividends that were "declared" in a year. That does not mean that they were actually paid. They could or could not have been.
You can get an idea of this from Yahoo finance. As with most sites, they give the ex-dividend date. Since the ex-dividend date is 2 business days before the dividend record date, there will be some variation. However, if the ex-dividend date varies by more than 2 days, it could be an indicator that a stock does not stick to a cycle.
If you look at Wal-Mart’s ex-dividend dates they are all over the place. This would suggest that dividend payments are not consistent. Commenter said Wal-Mart pays in January, April, June, and September. Not exactly every 3 months but still 4 times each year.
The Canadian Stock Metro (TSX-MRU.A) has an interesting payment schedule which seems to be March, June, September and November. Also, Richelieu Hardware (TSX-RCH) has a different schedule of February, April, August and late October or early November. Sun Life (TSX-SLF) declares dividends and had 3 payments in 2005 of March 31, June 30 and September 30 and 5 in 2009 of Jan 2, March 1 June 30, Sept 30, and December 31.
Other stocks like TransCanada (TSX-TRP) are consistent. Their dividends are paid at the end of January, April, July and October. Enbridge (TSX-ENB) is the same; they pay a dividend on the 1st of March, June, September, December each year.
Table of stocks I follow and their Dividend Payment Cycles is partly shown below. You have to click here to get full of table. You can use your mouse to high light a line (i.e. the stock, symbol and corresponding DP).
|Ag Growth International||AFN||M|
|AGF Management Ltd, Class B||AGF.B||1|
|Algonquin Power & Utilities Corp||AQN||1|
|Alimentation Couche Tard||ATD.B||3|
|Alliance Grain Traders Inc||AGT||1|
|Click here to get rest of table.|
Wednesday, May 16, 2012
Do you find that analysts’ recommendations are confusing? It is not so bad when you realize that almost all analysts’ recommendation are on a 5 point scale.
Most places where you find a collection of analysts’ recommendations, they will be using a 5 point system, and they will make a consensus call based on what the majority of the stock analysts think, according to this scale.
Say, according to Morning Call, there are 9 analysts and 5 say a stock is a buy, 3 say a buy/hold and 1 say hold. You should consider this a buy. If you take the Morning Call ratings, you would give the buys 1 point for each analyst (or 5 points) and buy/hold 2 points for each analyst (or 6 points) and the hold 3 points for each analyst (or 3 points) for a total of 19 points. Divide by 9 to get 1.5, which is a buy.
The Globe & Mail rates stocks as Strong Buy (1), Buy (2), Hold (3), Underperform (4) and Sell (5). For the stock Genivar Inc. (TSX-GNV), see ratings at Globe Investor. The Financial Times uses Buy (1), Outperform (1), Buy (2), Hold (3), Underperform (4) and Sell (5). For the stock Ag Growth International Inc. (AFN:TOR), see ratings at their site.
Morning Call rates stocks as Buy (1), Buy/Hold (2), Hold (3), Hold/Sell (4) and Sell (5). See their recommendations at their site.
Possible ratings you will come across are:
|Strong Buy||Moderate Buy||Hold||Moderate Sell||Strong Sell|
|Top Pick||Buy||Hold||Don’t Buy||Sell|
Got a Buy on Weakness or Watch recommendation? Generally this is because they think that the price is currently too high and it might go lower. Sometimes the “Don’t Buy” recommendation is meant as a Hold.
Wednesday, May 9, 2012
Sell in May and go away? Frankly I do not do that. It is not that I do not believe in the seasonality of the market, because I believe there is a certain seasonality to the market. There is support for this idea, because historically, the rise in the stock market between May and September is minimal at best, but the rise in the stock market between October and April is close to the long term rise in the market.
Because I will not sell everything in May does not mean I would not take advantage of the seasonality. The problem with market seasonality is that it is hard to apply it to a particular stock. Some types of stocks have their own seasonality. Some have their own relationship to the business cycle. Selling also involves fees and taxes. If I have a stock I want to hold for the long term, I will not sell it just because the market is underpricing or overpricing it.
However, if there is a stock I want to sell, or if there a future need for cash in one of my RRSP accounts, I look to sell in April or May. Since October is probably the worse month for market crashes, I look to buy something I want around October.
Also, being Canadian, we also have a bit of a run up in the markets to the end of the RRSP season for the 1st of March each year.
Don Vialoux is the Canadian name in market seasonality. He has a couple of websites. One called Timing the Market and the other one called Equity Clock . Don also writes for the G&M. See his columns in the Globe Investor at the G&M. Don talks about how and why the sell in May and go away is really a myth. See is G&M article on this subject.
Another person you might be interested to read Ron Meisels, President of Phases & Cycles Inc. He also writes in the Globe & Mail. See his articles at the G&M.
A site you might want to know about is the one for the Canadian Society of Technical Analysts at csta. Both Don Vialoux and Ron Meisels have belonged to or still belong to this organization.
Wednesday, May 2, 2012
Safe Withdrawal Rates
The research I read that came with the 4% withdrawal was making 8% return and with 3% inflation. Do not forget with the earn 8% and take out 4% scenario you will be able to take out an increasing amount of money each year. I would not expect to earn 8% returns over the short term and but I do expect to do so over the long term.
I started to live off my portfolio in 1999. At that time I had half my money in Trading Accounts and half in RRSP accounts.
Saving For Retirement
I just wished there were TFSA when I started to invest. The problem is that I am currently paying higher taxes on RRSP withdrawals than when I was putting money into my RRSP. Unless you are currently in the highest tax bracket, RRSP may not be the way to go.
The reason I am in a higher tax bracket is that my investments have done well. I did get some pension money, but no full pension as I switched jobs during by working career. I was in some defined pensions, but if you do not work until retirement in the same company, you do not get much from them.
When I was investing it was always put money into RRSP now and get a tax benefit. It was also said by everyone that in retirement you will be in a lower tax bracket. This did not work that way for me. I was in a high tax bracket when I stopped working, but most of the years putting money into my RRSP account I was not.
How have things worked out?
I started with a 4% withdrawal, but have since gone lower. What I was worried about was that I was taking out some capital as my dividend income was running at around 2.8% per year. We also had a bear market just after I stopped working. I set about to increase dividend income and only take out dividend income. My portfolio has grown at 4% per year, my current dividend income is 3.5’% and I now withdraw 3%.
One thing that has happen is my dividends have increased much fast than inflation or the growth of my budget. The 5 year median growth in my dividends is running at 11.4%. My yearly dividend increases range from low of 5% to high of 24%. This really helped reduce my withdrawals to just dividend income.
One of the original financial bloggers I read talked on and on about dividend paying growth stocks. These companies tend to pay dividend around 1%, but they also tend to increase dividends by 15% to 30%. With some of these and other dividend stocks my dividends in 1999 was rather low. To increase dividends I bought some companies that paid a higher dividend and raised my dividends income. So now I have a mix dividend stocks with low, medium and high yields and low, medium and high growth in dividends.
Taking Money from RRSPs
When I stopped working, half my money was in a Trading Account and half in RRSP accounts. One RRSP account was a locked in one because the money came from Pension money. Split was Trading Accounts with 49.5%, RRSP 37%, Locked in RRSP 13.5.
I initially tried to run down my RRSP account, which I sort of did, as the split between the accounts is currently at 52.5%, 26.5 and 21%. Part of the reason for this is that my investments in my Locked-in Account worked out better than in my RRSP account. Also, I was only taking from my RRSP account initially, but lately I have switched my Locked-in Account to a RIF to take money out of this one also.
I am current moving money from my RRSP accounts into my Trading and TFSA. That is, I am taking proportionately more money from my RRSP account than my Trading Account. I am not taking anything from my TFSA account.
I always make sure that I have 5 years’ worth of projected money in my RRSP accounts for withdrawals so that I never have to sell a stock at an inopportune time. I use current cash and projected dividend income to ensure this 5 year coverage.
Dividends and Recessions
I have a portfolio rich in increasing dividend paying stock. In the last bear market my portfolio lost value (i.e. stock prices went down on the stock I held went down), but my dividends went up. The same thing has happened in all the bear markets I have experienced. I really have had no year when my dividends have not gone up.
Thursday, April 26, 2012
I think we need to get out of the mind set of retiring at a particular age or any age. I know people 65 plus who are still working. They have jobs that they love. Healthy seniors are active. They are working or volunteering or have a hobby. They exercise. They socialize.
You might think that this is laughable comment coming from someone living on investment income. However, I have not stopped working, I just have changed jobs. Personally, I have always enjoyed working and I still do. I run, I blog, I socialize. Healthy retired people are active people.
Recent studies that I have read show that the best way to keep your mind alert is to exercise. Here is one link but it is not the one I had read a while back. See Pick the Brain site. Here is another link on this subject at BBC.
I think that if you are looking forward to retirement, you probably need to change your job. We are living longer and longer. In the 1920’s Canadian men and women could expect to live until of 59 and 61 years on average. By 1940’s, the ages had moved to 63 and 66. By the 1960’, the ages had move to 68 and 74. By 2008, the last year that I can find, ages were 79 and 83. See Stats Canada.
Do not forget that I am quote mortality average mortality rates. That means that by age 83 for women, half the women would be dead and half alive. These mortality rates are from birth. Also, if you are 65 today, men can expect to live 16 more years or until 81 and women are expected to live 21 more years to 86.
Going back to the problem that mortality rates are average. I would not plan to have enough money to live until 86 when there is a 50% chance I would live longer. A lot of retirement planning is to age 90 or 100. My plan goes to age 100. JDM Actuarial has an article on this subject on their site.
In actual fact, I have really designed my retirement money to last forever, not just to 100. The age 100 is just when my spreadsheet end. I do not want to be old and near the end of my life and not have money. I will leave an estate, I realize that. It was not my main intention, but that is how it will work out. I do not want to be old and not have money.
The other thing is that I know that both my in-laws and parents spend lots of money in the last few years of life. The potential is to need money and quite a bit, like a $100,000 or more. Yes, you can get some help from the government, but probably not enough. If you want to stay in your home you might have to hire someone to come in a help with cooking and cleaning. This is not cheap. It is also not cheap to get into a reasonable retirement home. Do you really want to go into a government home where they have been scandals about the ill treatment of seniors ever since they have been set up?
So, we are not going to have a few years in retirement; we are going to have 20, 30 or more years in retirement. What are we going to do with so much leisure time? And, how are we ever going to pay for it? Indeed, that is the big questions. We are already bearing huge governmental debt and boomers retirement is just getting started.
If a person today retires at say 55, they have the potential of working for only 33 years, but living for another 35 years after retirement. Was any pension plan every designed with this in mind? I do not think so. If you retire at 65 after working some 43 years, you might live another 25 years. I do not think that retirement plans were designed for this neither.
We have an aging population. Can we afford to have a huge portion of adults not working? The next generation is looking to have a long retirement and we cannot support our current retirees. If you think this is untrue, you have obviously missed the debt problems in the western world. We are in deep problems and it will probably get worse before we are forced to fix our debt problems. Politically, we tend not to do the hard things until we are forced to.
Yes, I know that we paid for our parents’ retirement plans. However, there were lots of us and few of them. The problem with the next generation paying for ours is that there are still lots of us but there are few of them. The generation coming after the baby boomers are not only a lot smaller than our generation, they are having and probably will continue to have trouble getting and keeping good jobs.
If we do not do something to get our debts down, then the economy will not grow and if it does not grow there will be few jobs for younger generations. It is not just that the last recession was harsh and long lasting. The real current problem we have is debt.
I live in Ontario and the provincial government has unrealistic plans to balance the books sometime within the next 5 or 6 years. That means that the debt will grow by each year’s deficient for another 5 or 6 years. And do not forget, I said that they plan does not seem attainable. The deficient is the new debt we incur each year and we are only currently discussing cutting this. There are no plans to pay down the debt. And, Ontario is not as bad off as other provinces, states or countries.
The other problem is that most of our debt was run up to pay for social programs. The problem with using debt to pay for social programs is that there is no pay back. When the USA built the interstate highway system, it increased commerce and increased tax flow to the governments. The US economy boomed. You do not get this reaction from going into debt to fund social programs.
I also noticed an article in the Globe and Mail asking Is 75 the new 65? See G&M.
Wednesday, April 19, 2012
The following is an interview with a friend who wanted to understand what it is I am blogging about, so this is for all you novice investors who are not sure about what I blog about.
I must admit that I am in information overload and spread sheets are beyond me!
I get about 150 people looking at my blog daily and sometimes none or sometimes one or two look at the spreadsheets. You are not alone in this.
You are currently reading "Economics of Good and Evil" by Tomas Sedlacek, how has it helped you to better understand the current economic situation?
I understood the situation before I read the book. I read a lot of economic books, magazines and articles. Tomas Sedlacek is considered to be one of the ‘five hot minds in economics’ by the Yale Economic Review. If you Google Tomas Sedlacek and RSA, you should get his 20 minute video that explains very well our current economic problems.
What advice would you give to the low risk, medium risk and high risk investor?
Risk is a very subjective thing. What I might think is low risk others may not. Maybe we should go to smarter risk or smarter investing. First a smart investor should know his/her comfort level. Do not invest in something that might keep you awake at night. The second big cardinal rule is “do not invest in something you do not understand”.
If you are going to invest what are your goals? Are you trying to retain your capital or to make some money? People who are currently investing in bonds often say that they are safe and they want to retain capital. Of course the current problem with our extremely low interest rates is that you are probably not even retaining capital with bonds as your capital is being eaten away by inflation.
If you are out to make money, you have to realize that often with high returns comes with high risk. This is generally true but not always, because for some high risk investments you make lousy returns. However, you are not going to make any money without taking some risks.
I invest in high quality dividend paying blue chip stocks. Often such stocks make more money than other stock because they are less volatile. My portfolio does not reach the lows of the stock market. It also does not reach the highs either. Less volatile sock often produce higher returns over the long term.
At 45+years, how much money does one really need to start to invest meaningfully?
Usually, when starting out investing, one does not have much money. I started out by buying Canadian Savings bonds on a monthly plan and then cashing them in in November to buy some shares. To buy stock you need a minimum of $3,000. You have to buy stocks in a board lot that is 100 shares. Quality shares start around $30, but can be a lot higher. TD Bank is currently around $82. So for TD Bank you will need $8200, plus commission.
It is a wise idea to have more than one stream of income. A job is generally the first steam of income a person gets. Investing can give you a stream of income. In fact investing can give you a number of different streams if you diversify. Some diversify into commodities, bonds, GIC and stocks. Others make money out of buying and selling or renting real estate and still other make money on the internet.
Personally, I diversify my income using different sectors of the investment market. I have stocks in industrial, consumer, real estate, financial and utility sectors. I have very little in resources as I find this sector very risky.
Should one be looking at GICs and Bonds v mutual funds and stocks?
We have gone from a climate of extremely high interest rates to one of extremely low interest rates. I used to have GICs and Bonds. I sold my last bond in 2007. It was a 30 year CIBC bond due in 2014 with interest rate just below 10%. I sold my last GIC in 1997.
The problem with any interest bearing investment vehicle at the moment is the very low interest rates. A lot of high quality government bonds in Canada have interest rates around 2% and some are lower. Inflation is running current around 2%. And, do not forget that you have to pay tax on any income. This is the reason I have no bonds currently. Interest rates are much too low.
The other reason I have no bonds is that we are at the tail end of a very long bond bull market. With bonds, the interest rate and value of bonds go in the opposite directions. So if you buy a $50,000 bond with a 2% interest rate and interest rates go up, your bond will be worth less than $50,000.
The volatile of the bond value depends on how much interest rates change and what the bond duration is. The longer the period to the bond’s maturity the more volatile the bond’s value will be. Interest rates are extremely low. They have nowhere to go but up. At some point we are going to go into a bond bear market.
People generally do not buy mutual funds, they are sold mutual funds. One problem with a lot of mutual funds is the high fees. However, you cannot expect people to invest for you for free. Another problem is that there are more mutual funds to choose from than there are stocks on the stock exchange. You have the same problem with ETFs (Exchange Traded funds)
Currently, I am into stocks and mostly dividend paying Canadian Stocks. My blog mostly talks about specific stocks.
How about paying off the mortgage v buying RRSPs?
The general rule is always paying off debt before investing. However, this is a general rule. You may have a good reason to do otherwise. If you are going to invest before paying off your debt can you articulate why?
What is the situation with the Toronto housing market from the investment point of view?
I have not owned a house or condo in Toronto yet. I love apartment living, so if I buy it would be a condo. However, I am worried about the number of condos being built currently in Toronto. I also worry about what the future holds for those monthly condo fees. They seem to keep go up and up.
I have always rented an apartment in Toronto. However, when my son was growing up I did have a cottage.
What is your tip of the month to the average zoomer?
Now is not the time to buy utilities and REITs. Everyone is looking for income because of the low interest rates. The stock of utilities and REITs are currently overpriced.
What books would you recommend to the new investor, the low, medium and high risk investor?
I do not read that many investments books. One I did like was Stocks for the Long Run by Jeremy J. Siegel. He is an American, but what he says also applies to our market.
I know a blogger I follow called Dividend Ninja has recently recommended “Never Too Late, Take Control of Your Retirement and Your Future” by Gail Vaz-Oxlade. Another blogger I like, My Own Advisor has recommended Millionaire Teacher by Andrew Hallam.
Maybe you could give me some examples of what you are typically asked by people
Usually people ask me to recommend a stock and I cannot do that as I am not a licenced advisor. Of course, I can tell them what I am buying or what I am reviewing. The thing is I am investing to live off my dividends. It may not be what others want to do. However, the stocks I have and review are often just as great for new investors as they are for people living off dividends.
Would you think it is a good idea for parents/grandparents to buy stocks for their children/grand children?
If the child is 18 or over, there are no problems. You can get into tax complexity if the child is under 18. Any income is taxable back to the parent/grandparent. Capital Gain is taxable in the hands of the child.
If you are using the RESP vehicle, you can of course have stocks if the RESP is a trading account. The problem here for stocks is that you have to plan 5 years before the RESP money is need to get out of the market. No one knows exactly where the market is at any time, but you do know if it is relatively high or relatively low. Within the 5 years to when money is need, you need to pick a time when the market is relatively high to sell the stocks.
I know people have often suggested giving children shares in toy game companies, but I think that is a bad idea. They are not good long term investments. Games and toy changed very rapidly. You need good stable companies. Utilities are probably best. I know utilities are currently overpriced, but they will not always be.
Please Susan, now that you know how very basic my questions are, could you please make your responses at a very simple level?
Let me know what you do not understand and we can fix it.
Wednesday, April 4, 2012
A TFSA Account
I was looking at what could possibly be done with a TFSA account and I just thought I would throw this in.
A Model of TFSA Investing
I made a model of investing for TFSA, assuming you were putting in $5,000 a year and got a return of 10% with 7.5% of capital gain and 2.5% of dividends. Dividends were increasing at 9% a year. Dividends were being reinvested. At the end of 12 years you could have $86,061.22 and at the end of 20 years $315,740.56.
I am assuming you are investing in good quality dividend paying stocks.
How realistic is this model?
My long term results on Fortis (TSX-FTS), which I first bought in 1987, are 13.4% per year to the end of 2011. Of this total return, 4.9% is attributable to dividends and 8.5% to capital gain. Dividends are 49% of my return. The 10 year median dividend yield is 3.3%. The 10 year dividend growth is 9.5%, per year.
My results on Enbridge Inc. (TSX-ENB) that I have had for only 7 years is 20.1% per year to the end of 2011. Of this total return, 3.5% is attributed to dividends and 16.6% to capital gain. Dividends are 17% of my return. The 10 year median dividend yield is 3.3%. The 10 year dividend growth is 10.8% per year.
I bought Power Financial Corp (TSX-PWF) first in 2001 and more in 2011. My total return to the end of February 2012 is 8.5%. Of this total return 4.4% was attributed to dividends and 4.1% to capital gain. Dividends are 52% of my return. The 10 year median dividend yield is 2.8%. The 10 year dividend growth is 14.47%. (This is mostly life insurance, but they do have some mutual funds. They have done better than Manulife and Sun Life. Like more life insurance companies, they have not raised dividends recently and for this company, since 2009.)
My long term results on Bank of Montreal (TSX-BMO) that I first bought in 1987 are 15.9% per year to the end of 2011. Of this total return, 6.4% is attributable to dividends and 9.5% to capital gains. Dividends are 40% of my return. The 10 year median dividend yield is 3.8%. The 10 year dividend growth is 9.6% per year.
My long term results on Royal Bank (TSX-BY) that I first bought in 1999 is 17.9% per year to the end of 2011. Of this total return, 5.6% is attributable to dividends and 12.3% to capital gains. Dividends are 31% of my return. The 10 year median dividend yield is 3.3%. The 10 year dividend growth is 11.7% per year.
I have had CDN Tire (CTC.A) for a long time also, some 12 years. I have a return of 10.8% per year to the end of February 2012. Of this total return, 1.9% is attributed to dividends and 8.9% to capital gain. Dividends are 18% of my return. The 10 year median dividend yield is 1.3%. The 10 year dividend growth is
What to do about dividends and other small amounts?
Dividends income will start out low. To reinvest them you can use the DRIP facilities most dividend paying stock have. The blogger My Own Advisor covers DRIPs quite thoroughly, so I am not going to go into how this works. See his site.
Or you can just add the dividends to the amount you want to invest in the following year. I sometimes buy small cap dividend paying stocks for small amounts of money in the TFSA account.
You can also buy Mutual funds. I know banks like to the TD allow small amounts for some of their funds. For example TD Canadian Index – e (TDB900) allows $100 initial and subsequent investment. The subsequent investments can be any amount they just have to be $100 or greater. Say you had $246.28 in your account you could just clear this into the mutual fund. All the low investment mutual funds have low yields and this one has a yield 1.85%. It is a no load and MER is just 0.33%.
If you are just starting out you should buy utilities and banks. You can buy less than a board lot of shares. A board lot is a financial term, usually meaning 100 shares and most stocks are sold in 100 share lots. However, you can buy and sell odd-lots (less than 100 shares). You may not get the best price, but it will not be far off and if you plan to hold on to the shares, this will not be a long term problems.
For 5 year periods since 1956, we have had 4 years of TSX negative return. Over 10 years, we only had one period of TSX negative returns since 1956. TSX returns over 10 years range from 8.2% to 203.4%. If you had been including dividends there would have been no period of negative returns. For 15 or 20 years periods the TSX does not even come close to a negative period since 1956.
US had 2 10 year periods of negative returns and also one ending in 2008, I believe, since the 1920’s. The TSX has done better over the last few years than the US market.
You also have secular bear and bull markets. These last around 15 years. We have been in a secular bear market since 2000. (Although there is some arguments that the Canadian market has moved out this secular bear market, but the US has not.) Secular bear markets tend to be volatile and muck around and not make much progress as far as stock prices are concerned.
Secular bull markets have strong upward movements. They also have pull backs in stock prices, but overall the stock prices move up. In both secular bear markets and secular bull markets, you have cyclical bull and bear markets. Cyclical bull and bear markets are a lot shorter in duration than the secular bull and bear markets.
Depending on when the 10 year period was, you could or could have not have achieved the 10 years goal. However, I think that over a 20 year period you most likely would.
See my spreadsheet at TFSA_div.htm.