My Best Investment Yet
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:
- Over time the dividends received should exceed the amount I paid for those shares
- The dividends yield based on the original purchase price must be in the double digits or higher
- 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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