Dividends, Investing

My Best Investment Yet

By Kanwal Sarai
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275.97% return since I first purchased shares in TransCanada Corporation (TRP) in 2000. The return includes dividends, which I discussed in an earlier post. 275.97% return sounds like a really big number, but aside from the dividends I have not received a penny of profits yet. Why? Because I haven’t sold my shares in TRP yet, perhaps I never will. Why? Because my dividend yield based on the original purchase price is now 11.94% which is better than what I can earn in a savings account, term deposit, or bond. Also since I’ve owned the TRP shares the amount of dividends I have received has nearly equaled what I originally paid for the shares.

My goal is to have every share in my portfolio become “My Best Investment” over the long-term. Here are my criteria:

  1. Over time the dividends received should exceed the amount I paid for those shares
  2. The dividends yield based on the original purchase price must be in the double digits or higher
  3. The capital gains must be in the triple digits or higher

I know the above list might sound crazy to some, but it’s my wish list and that’s what it takes to be on “My Best Investment” list.

Remember this is a long-term strategy, do not invest your money in stocks that you will need in 1-2 years. In the short-term stocks prices go up and down. Let’s say you are saving for a vacation, down payment for a home or car that you plan on purchasing in 2 years, and you invest that money in the stock market. What happens in 2 years if you investment drops by 30%-55%? Now you can’t afford the vacation, home, or car. Investing in stocks is a long-term strategy 5-10 years, the longer the better. Over the long-term financially healthy companies should continue to increase dividends, which generally results in higher stock prices over time.

If you’ve got the foresight to think 5-10 years ahead and make those investments today, you too could be sitting on your own “Best Investments” and be financially free much sooner than later.

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Kanwal Sarai

With more than 27 years of investing experience and a passion for investing and teaching, I demystify the world of investing. My goal is to help you grow your net worth by investing in quality dividend paying stocks. Build your own stream of increasing income today.

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Showing 6 comments
  • penny stock picks
    Reply

    I know that the TransCanada Corporation (TRP) was the amazing investment in 2000. I am thinking to invest some money in penny stock picks. So please suggest me some tips for it.

    penny stock picks

  • Kanwal Sarai
    Reply

    Hi penny stock picks,

    Thanks for your comment, unfortunately I don't provide tips on penny stocks, I also don't recommend penny stocks to any of my students due to the increased risk. Sorry but Simply Investing is not the place for those looking to invest in penny stocks.

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