Keeping Peter Lynch's quote in mind, here is your three minutes.

With the recent Canadian federal budget, our national debt as a percentage of GDP (the country’s measure of all goods and services) has risen dramatically since 2010, from 30% to 50% and this has many Canadians worried.

However, a lot of people forget that in 1995 our federal debt was at 65% of GDP, when the Liberal government, under pressure from bond rating agencies that downgraded Canada's debt, decided to finally shrink and focus government spending, and to spend within their means. As the economy grew, government spending got smaller and debt was put under control. That is the playbook again post 2021, even though our current spending in Canada seems to have no end in sight. Make no mistake though, the spending needs to get in line with GDP and be reduced, or we will have other problems to deal with. We believe that just in like in the past we will eventually do the right thing and get our house in order.

Shifting our focus away from economics to the simplicity of long-term investing, the 16 companies in our Canadian Dividend Income Strategy yield 2.7% with an overall five year dividend growth rate of 11.7%. While the US Dividend Income Strategy yields 3.4% with an overall five year dividend growth rate of 9.4%.

In both cases the companies use less than half their profits to make these payments so the dividends are sustainable, and these companies have grown their profits by more than enough to fund the growing dividends. In addition, regardless of what the future holds, you will still use the products and services of the utilities, grocery stores, banks, pipelines, home improvement and communications companies that we own.

When we think about the future, that is what we should focus on, knowing that in the short-term the stock prices of these companies will go up and down, but over the next decade as the earnings and dividends most likely trend upward overall, so should their share prices.

Keep enjoying spring and be of good cheer!

Randy and Ian, and the team at R&R Investment Partners

Image source: The Globe & Mail