Following last week’s article describing the concept of economic moat, we now look at switching costs and the network effect. Both are competitive advantages that protect a company, in other words, that contribute to that company’s economic moat. Switching cost High switching costs make it difficult, costly, or both for customers to switch from one supplier to another. A company enjoying this type of protection is said to have a sticky business model because the switching costs make its customers stick with it as its supplier. For example, half of my home is connected to an Apple product (air ..read more

Subscribe Initially, a moat is a deep trench around a castle to protect it from invasion and enemies. Nowadays, there are 5 sources of economic moats for companies. They refer to the factors that help a company survive and thrive. Today, we’ll explain these sources and give examples of stocks to buy for each. Define Your Strategy and Invest with Conviction. Download the Portfolio Workbook for free. You’ll Learn Moat companies are businesses that show solid competitive advantages or some barriers for competitors to enter their niche. There are narrow and wide-moat companies. The first source ..read more

Adding economic moats to your stock analysis can help you to develop and be confident in your investment thesis, i.e., why a stock is a good pick for your portfolio. A company’s economic moat can also shed light on loser stocks you have and don’t know what to do with. A moat is a ditch, either dry or filled with water, surrounding a castle or town, that acts as a primary line of defense. Historically, moats were used to protect our most precious asset: where we live. The term economic moat refers to the factors that help a company survive and thrive, and how long these factors will exist. In o ..read more

Subscribe Easy solutions can involve serious risks. Here’s what to consider before doing Short Selling, Profit Protection, and the Chowder Rule. Download the Dividend Rock Stars List and Select Stocks Among the Best Assets! Enter your name and email to get the free spreadsheet. You’ll Learn Short selling occurs when an investor borrows a security, sells it on the open market, and expects to repurchase it for less money. Why would an investor short-sell its shares? What are the benefits? The risks of this strategy are real and investors could lose a lot of money! Sometimes, an expert issues a ..read more

In September of 2017, I received slightly over $100K from my former employer, representing the commuted value of my pension plan. I decided to invest 100% of this money in dividend growth stocks. Each month, I publish my results on those investments. I don’t do this to brag. I do this to show my readers that it is possible to build a lasting portfolio during all market conditions. Some months we might appear to underperform, but you must trust the process over the long term to evaluate our performance more accurately. Performance in Review Let’s start with the numbers as of April 5th 2024 (be ..read more

Subscribe It is frustrating to pay currency fees on investment. Many investors feel like a part of their money is lost and useless. Canadian Depositary Receipts (CDRs) have been created to solve that problem. Now the question is, is it too good to be true? You’ll Learn A Canadian Depositary Receipt (CDR) is equivalent to US stocks but is traded in CAD. It provides a currency hedge and allows fraction shares. CDRs have been inspired by ADRs (American Depositary Receipts), which have been around for a long time. While they may look similar, they’re a totally different product. CDRs’ main goal ..read more

Can ETFs and stocks coexist in a portfolio and make that portfolio better? ETF or index ETF investing versus do-it-yourself dividend growth investing is always a big debate. You know I favor stock investing, but I keep an open mind. There is room for ETFs even if you invest in stocks. I see both ETF investing and dividend growth stock investing strategies work very well. Should you put both in your portfolio? It depends. Let’s elaborate. So yes, I see situations in which combining individual stocks with an ETF, or several ETFs makes a lot of sense. Listen to Mike’s podcast. Adding different a ..read more

Subscribe Sector allocation and diversification are essential aspects of a portfolio. But sometimes, too much is as hurtful as too little… Let’s discuss diworsification, its impacts, and how to maintain a well-balanced portfolio. Download the Dividend Rock Star List and Pick among the Best Assets Only! You’ll Learn We must first define good diversification. What does it mean to have a balanced portfolio? Although investing across all 11 sectors is not a problem per se, it could become a burden if investors select industries they don’t understand just for the sake of diversification. Mike exp ..read more

Real estate investment through REITs (Real Estate Income Trusts) is not only popular because REITs distribute generous dividends, but also because they’re easy to understand. We can easily picture an apartment building or an office tower and imagine tenants paying their rent. Investors are willing to purchase units of those businesses in exchange for income and peace of mind. REITs are landlords; they own and manage real estate in exchange for rental income. They have properties such as apartment complexes, hospitals, office buildings, timberland, warehouses, industrial facilities, data center ..read more

All investors share a goal. Making profit. How do you know when to cash in on your winners? A stock is up 20%-50%-75%. Will it keep going up? Is it about to crash? You feel you should sell, but you like that stock… Selling winners isn’t easy. Sell Costco at $385 because of a gain cap trigger Some put a limit on the stock price gain, for example, when they’re up 50% they sell the position. As a dividend growth investor, I choose stocks I want to keep for a long time, not for a quick buck. When you hold on to solid holdings for a long time, you can get to triple-digit growth—much more interestin ..read more