Here are some of the topics that the financial media inundates you with in order to grab your attention:

• How high will interest rates go before they stay put or get cut?
   
• Has inflation topped out?
   
• How much higher can oil go?
   
• Is there going to be a real estate correction?
   
• What’s the effect of the war in Ukraine on the world’s economies and financial markets?

These things matter, but judging by the volume and repetition of stories dedicated to these topics you’d be forgiven for thinking that they’re the only issues worth considering when it comes to investing. Those of you that regularly read our posts won’t be surprised to learn that we hold a different view, for long-term money that isn’t needed for five years or more we believe that the overall focus should always be on the businesses that make up a portfolio.

To wit: the Dividend Growth Strategy owns 40 North American businesses that are resilient and have a history of growing their profits and dividends. The portfolio currently has a dividend yield of 3.58%¹, which is taxed at a far lower rate than interest income. In addition, those dividends have increased at a 7.01%² growth rate for the last five years and are expected to continue to grow into the future.

Dividends Paid + Dividend Growth = Share Price Growth Over Time. It is literally that simple.

Now while share prices will fluctuate in the short-term as Mr. Market becomes manic about the list of issues above, over the long-term capital compounds as businesses like Royal Bank of Canada, Enbridge Inc, Home Depot Inc, Texas Instruments Inc, Canadian National Railway, Exxon Mobil Corp, Coca Cola Co and Intact Financial Corp, to name a few, continue to generate profits.

Keep bucket one, i.e. the one for short-term funding needs, filled with cash and cash equivalents as required and as your life dictates, and invest in businesses for the long-term and ignore manic Mr. Market.

Randy and Ian

1. Source: R&R Investment Partners. Sum of weighted holdings’ yields of the portfolio model. As of August 24, 2022.

2. Source: YCHARTS. Median of annualized dividend per share growth rates of strategy holdings. As of August 24, 2022.