Mark 00:00:00 Year to date returns through the end of August, correct?

Tarek 00:00:04 Yeah. That’s the most recent month end. Yeah.

Mark 00:00:06 15.0%.

Tarek 00:00:10 15% even. That’s a great can’t argue.

Mark 00:00:13 Can’t argue with those numbers.

Tarek 00:00:14 So what we did was we wanted to build a dividend strategy that, you know, obviously had the highest yield. But we want to make sure we’re picking companies that, the dividend is going to remain or increase.

Mark 00:00:27 I want to ask the question, what’s your dividend yield on those 12 stocks?

Tarek 00:00:30 I was kidding, too. Yeah. we’re at 6.2%.

Mark 00:00:34 What does the 6.2 compare with on the TSX dividend yield?

Tarek 00:00:39 The question so the current TSX index pays 2.92% dividend yield. So we’re more than double that.

Mark 00:00:50 Well welcome back to this month’s Tower Talks. We’ve got some interesting stuff to talk about. We’re going to take a look at real estate investing versus the market, because Tariq is thinking that, too many people are choosing not to go into the stock market. And he wanted to make a case for us being the choice.

Mark 00:01:07 The first choice. No. I’m kidding. But we were wondering what was better real estate or the stock market and take a dive on that. The other thing we want to look at is a new dividend strategy that we’ve put together and is now in place, and can tell you what that is about. Let me go to the first thing on the item on the list. And that is, how have we done year to date momentum. Year to date returns through the end of August, correct? Yeah.

Tarek 00:01:33 That’s the most recent month end. Yeah.

Mark 00:01:35 15.0%.

Tarek 00:01:39 15% even. That’s a great can’t.

Mark 00:01:42 Argue can’t argue with those numbers. Absolutely. Real estate will be embarrassed when we start talking about them okay. And then in there our enhanced index in in my portfolio we’ve got the 8020 mix, 80% equities, 20% fixed income, a year to date return. There is 10.2%. Now those numbers compare with the TSX of 11% and the bond market of zero. You know, sort of the dividends have offset the loss in prices.

Mark 00:02:11 So because that strategy is a blend of fixed income and equities. getting the equity market return out of it is a little bit difficult, but it’s got a little more diversification to it. It’s hugely diversified, to be honest, like it’s a very diversified strategy. So there’s yeah we don’t have to apologize for those numbers. But if you’re looking for, you know, the numbers that we might brag about and forget about all the rest, we would tell you about momentum 15% year to date. Okay, Tariq, what are we doing on dividends?

Tarek 00:02:42 I just want to make sure I say one thing so that John, our compliance guy, doesn’t get grumpy with us. TSX at 11 for this year, 11.4 11, just in case. Our compliance guy. All right, let’s get to the dividend strategy. If you’re just.

Mark 00:02:55 Told me off. Here we go.

Tarek 00:02:57 Just keeping John happy okay. If you’re a Canadian and you’re investing in Canada, you know that we have a lot of big dividend payers in Canada.

Tarek 00:03:03 It’s a lot of it’s a lot of, banks, utilities. Everybody talks about the dividend payers. So what we did was we wanted to build a dividend strategy that, you know, obviously had the highest yield. But we want to make sure we’re picking companies That the dividend is going to remain or increase, and that they have the ability to to maintain that dividend for for an extended period of time, which is really two sides of the same question. So we built sort of a screen or an algorithm where we look at a set of companies. We we make sure we’re sorting for larger companies, just to, to make sure they’re a bit more stable, a little more well established. We make sure we pick companies with higher yields adjusting for special dividends, because special dividends are dividends that are declared as a one off basis, and they’re not necessarily going to be paid in the future. So you want to make sure you cut those out and don’t give any credit to that, because that’s unexpected and can’t be counted on.

Tarek 00:04:00 And then, you know, taking a look at the the company’s numbers to try and determine, okay, is this current dividend sustainable or will it increase? A lot of people like to look at historical dividend increases and seeing if they’ll go up and so on and so forth. But that’s what we do now.

Mark 00:04:16 It’s a it’s the dividend payout ratio. That’s one of the big drivers. It is. And and also their balance sheet okay. So how many stocks did you put in there.

Tarek 00:04:23 We only have 12 in there. It’s very concentrated. Or as they say in the industry, it’s high conviction strategy.

Mark 00:04:29 Oh, I like that. I haven’t heard that line before. Okay. and your universe is the TSX 60 or TSX 300.

Tarek 00:04:37 The TSX 300. But we do sought to keep out some of the smaller, smaller names. We do. And I think.

Mark 00:04:42 I noticed the smallest market cap in there is about 6 billion market cap company. So they’re large companies.

Tarek 00:04:49 They are large companies. Absolutely.

Tarek 00:04:50 And like I said we’re looking at the the balance sheet ratios and the cash flow statement ratios to determine is this company going to be able to continue to to pay this dividend going forward. And I’m happy to say this before I’m sorry. You want to say something.

Mark 00:05:04 Yeah I want to ask the question, what’s your dividend yield on those 12 stocks.

Tarek 00:05:08 I was getting to? Yeah. we’re at 6.2%. So the, you know, Mark was generous enough to invest some in his account so that we have a basis to, to to record a tower. You’ll never see us putting you in a strategy that we won’t invest in ourselves and invested at 6.2. This isn’t a a number on a, on a okay model.

Mark 00:05:28 So so and I would say I would say it wasn’t a small amount. It was a meaningful amount within our portfolio. But let me just go to the one other question. What does the 6.2 compare with on the TSX dividend yield?

Tarek 00:05:41 Good question. So the current TSX index pays 2.92% dividend yield.

Tarek 00:05:48 So we’re more than double that. Even high dividend ETFs you know Blackrock and Vanguard would have some I think they max out it you know 4 or 5 4.5% to 5% maybe. And so we’re well above, above those the high dividend ETFs. and you know we those dividend ETFs just follow an index that has some rules that they follow. And I guess we have rules. We definitely have rules on how we do that. But we have the flexibility to say we’re going to review in six months and say is this a company we need anymore? Kick it out. If it’s in their index, though, they have to keep it in. They cannot break, they cannot change. the set of companies they invest in unless the index changes. But we so control. Let me.

Mark 00:06:32 Let me read you some of the names. Just so you know that, you know, in the, in the mix of names, there is Bank of Montreal, Bank of Nova Scotia, BCE, Brookfield, and so on.

Mark 00:06:43 12 names.

Tarek 00:06:44 You’re probably familiar with it if you actually recognize them.

Mark 00:06:47 Okay, one last question. What are you going to do with this strategy?

Tarek 00:06:51 Well, with this strategy, we wanna, you know, there’s a number of clients who we already have, who I will be reaching out to you directly to say, hey, this is probably a good fit for you based on your current net worth stage of life and needs. but if you’re listening to this and you think I would like this strategy for my portfolio, you can reach out to us as well. it is a new strategy. We’re confident in it. We’re not overly concerned about, it blowing up or anything like that. But it is a new strategy and we don’t have the historical performance to show you.

Mark 00:07:22 Time out. We’ve talked for six minutes on this. Okay. We’re going to take a break on this. We’re going to do a second video, and we’re just going to carry right on right now on real estate. So at this point there’s a break.

Mark 00:07:33 Video number two here we go.