Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
Podcast 245 - WHY DOES FIDELITY THINK INVESTING MY WAY IS CRAZY?
Welcome to Safe Dividend Investing's Podcast 245- (18 October 2025)
This week is a departure from my usual podcast content. It responds to a Fidelity investment advisor with whom one of my readers discussed my approach to investing. The Fidelity advisor stated that Ian Duncan MacDonald's investment ideas were the craziest ideas she had ever heard of.
What makes this email particularly Interesting to me is that the reader has a PhD in Applied Statistics and Mathematics. This would indicate a familiarity with scoring systems and the ability to judge the validity of my investment approach.
The reader raised the interesting question of why would a simple easy way of assessing the safe investment value of a stock not be taught in school. Most investors have a very limited understanding of the wealth of investment information that is free and immediately available on the internet from such websites as Yahoo Finance. All they need to be shown is what information is important and how to interpret it.
I write my investment books for those who do not invest in individual stocks for fear that they will lose their life savings. My books show investors an easy, safe way to select financially strong, safe companies who pay high dividends . I have been successfully investing this way for twenty years .My portfolio of strong dividend stocks provides not only provide a reliable, growing source of income but over time has greatly increase the value of my portfolio.
Unlike mutual funds - where investors have no control over their investment and only a vague idea as to what stocks are in the fund - a self-directed investor can fully understand and appreciate the value of the portfolio they create.
In this podcast (with a written transcript attached) you can get an understanding of why the stock scoring software supplied with my books is so effective.
For more information on self-directed investing go to my website www,.informus.ca or listen to the previous 245 weekly podcasts. The first 160 podcasts are devoted to answering questions from investors just like you. The remainder give you an opportunity to practice choosing stocks and introduce new relevant topics.
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
Canada, M9P 3R7
Toronto Telephone - 416-245-4994
New York Telephone - 929-800-2397
imacd@informus.ca
PODCAST 245
FIDELITY THINKS INVESTING MY WAY IS CRAZY
The following email, reporting that investment advisors are critical of my investing approach, is followed by my response. What makes this email particularly Interesting is the sender has a PhD in Applied Statistics and Mathematics which would indicate familiarity with scoring systems.
It reads:
“It is inspirational to hear about how your dividends and net worth keep growing, even despite your living off of some of the income. Why are we not taught your simple approach in school? I guess financial managers would not have a job.
I explained your (and my) approach to a Fidelity Rep and she told me that my ideas (yours) were the craziest ideas she ever heard of. I just laughed to myself and went on my way. These financial guys really don't get it. Or perhaps they want to just keep the average person depending upon them.
Is it really as simple for you as scoring the stocks from a curated list like those in your books and then:
- picking those stocks with scores over 50 which, in combination, yield at least 6%
- with a history of increasing dividends over the years
- No significant lawsuits or complaints
- a diversified portfolio which includes several industries
- Pick twenty stocks and evenly divide the total assets so there is equal amounts in each stock
- Buy and hold "forever" unless the company is headed for danger and the dividends dip below 5%
Did I miss anything?”
I replied that you missed nothing and my method of investing really is that simple. What your question confirmed was my method of investing could never be embraced by investment advisors.
What is an investment advisor’s job? They understand to survive they must become an investor’s friend and confident. The investment advisor is then permitted to nibble away at the investor’s wealth for the rest of the investor’s life,
This may sound disgusting, but it is a bit like having a pet rat who amuses you and is allowed to nibble away at a hunk of cheese on your kitchen table. Recognize that if for some reason you decided to put that cheese back in the refrigerator. That pet rat will soon leave for greener pastures.
Investment advisors are not your friends. They are hard-nosed salespeople who understand that the more clients they can establish a relationship with, the more money they will make. The greater the size of your portfolio the more they have to nibble away with their fees, commissions and charges.
They want to sell you mutual funds because it is easier to sell something that is vague, fuzzy and sold on faith rather than reality. They avoid selling you individual stocks with easily accessible in-depth research data because you might demand an explanation as to why it is such a “good” investment. With funds, an advisor’s analytical abilities must be a bit better than their typical uninformed client.
The last thing an investment advisor wants you to even think is possible is that you could build and manage your investment portfolio without having them there to nibble away at it. Advisors educating investors how to become successful, independent, informed stock pickers is never going to happen.
When you become an independent self-directed investor, it is like putting your portfolio, like cheese, away in the refrigerator where only you can touch it. This thought made me realize that my primary objective is to teach investors how to safely invest so they never lose money. That my system also creates both a reliable growing dividend income and a growing portfolio is an important side benefit but is the secondary objective.
My scoring system only appears simple. 50 years of unique commercial risk experience provided me with the insight and skill to build that effective stock scoring software. No investment advisor has the unique business risk experiences that I have had.
Few financial advisors have had the responsibility of being a senior executive in large public corporations with profit responsibilities. They have never managed large numbers of employees nor been responsible for the profitable growth in a competitive, multimillion dollar business.
Unlike me, they did not receive that initial grounding in commercial risk that I received. As a Dun & Bradstreet credit reporter, I was sent out every day to quiz eleven business owners and determine their business' potential to survive.
Investment analysts would also never have been tasked by a major corporation to create an investigative company to assess the potential of senior executive job applicants. Only years later did I appreciate that when you buy shares in a company, you are really buying the skills of a company’s executives to make profitable decisions.
Investment analysts would also never have spent years creating and selling marketing data. Data to be used in creating new products and growing their customer base. Understanding how to apply data gave me deep insight into how facts can be applied to assess the strength of a stock.
They also would not have had the experience of operating the largest commercial collection agency operation in the country. The thousands of business failures, bankruptcies, cash flow problems, predatory competitors and scam artists removed any thoughts of taking the survival of any business for granted.
An investment advisor has also never had to build a successful commercial credit risk scoring system of two and half million businesses for clients like American Express and other major corporations.
The benefit of my experience and knowledge was that after an investment advisor lost $300,000 of my money, that he had invested in mutual funds, I was able to terminate that Investment advisor and apply my experience to building a simple scoring solution. Free, current, factual stock information existed that allowed me to easily identify which business had operated profitably for years with ever growing dividend payouts and increasing share prices. Proof their management knew how to run a successful business. It allowed me to select 20 safe stocks that would keep my portfolio safe while providing reliable, growing income.
It removed unprofitable stocks promoted by the media and investment advisors from consideration. Stocks whose share prices that they said would make everyone rich overnight. It was evident to me that no one can accurately predict the future share prices when share prices are controlled by speculators trying to outguess each other.
When an 80-year-old widow asked me for help after her investment advisor had also lost $300,000 from her portfolio, I was curious. Could she deal with my stock scoring system? Would she be able to select safe, financially strong companies for her portfolio?
Using my scoring system, she was able to easily select financially strong dividend stocks. She has not only recovered the $300,000 the advisor had lost but her monthly income immediately doubled.
She now knew her income was all from dividends. No longer was her advisor selling off a portion of her portfolio each month to provide her with that income.
It amuses me that despite my lack of interest in current share prices many of my stocks have doubled and even triple in value while providing me with a reliable, generous six-digit dividend income. As share prices increased, I saw that many of my stocks also increased their dividend payouts at an even faster rate. This kept my income ahead of inflation.
Every day I do stock research for my book. Every day I see more confirmation about the value of my approach to investing. I would love to participate in a debate with that investment advisor who thought my approach to investing was crazy.
END