Five quick fixes for your investments

The best vacations are the ones where you do not need to worry - about anything. Before you go on vacation, why not take a look at your investment portfolio?

This column is due you from Hawaii, since I managed to escape the brutal Ontario winter for a while. You might also be venturing out somewhere with March break approaching in Canada.

The best vacations, though, are the type where you don\’t need to worry – about anything. Prior to going, why not take a look at your investment portfolio? Here are five quick fixes for your investments, so you might be able to enjoy your vacation a little more.

Dividend growth is far more important than dividend yield

Perhaps you have been lured into some high-yielding stocks in the last few years. You know high yields represent high risks, but you just couldn\’t feel free. You might still be amazed to learn that dividend growth stocks have more often than not outperformed high-yielding stocks.

A company with a 1% dividend that grows is vastly superior, performance-wise, to some company with an 8% stable dividend. Don\’t be afraid, then, to sell some of your high-yielding stocks to replace them with dividend growers. Or, buy some ishares S&P/TSX Canadian Dividend Aristocrats Index Fund (CDZ/TSX) ETFs.

Reduce your quantity of holdings

You know by pointing out benefits of diversification, but maybe you have taken it a little too far and today own 50, 75 or 100 different positions. Take the time before your vacation to trim your portfolio.

Do you need four different market ETFs once they hold mostly exactly the same securities? Do you want nine different junior gold stocks?

Take the amount of securities right down to 20 to 30: that\’s all you really need for proper diversification.


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