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 269 - A 10 BILLION DOLLAR PORTFOLIO MANAGER'S APPROACH TO INVESTING
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Welcome to Safe Dividend Investing’s Podcast # 269 on April 4th of 2026.
My name is Ian Duncan MacDonald, and I am the author of 7 investment books. My seventh investment book, Achieving Financial Independence Safely - 200 NYSE Stocks Analyzed and Scored" became available January 3rd on Amazon. You can easily find it by searching in Amazon or Google for "Ian Duncan MacDonald books". For more information on all my books, stock scoring software and podcasts go to www.informus.ca
This week's podcast is a departure from my usual offering. Paul Musson went through my podcast and wrote comments about its content. He was a professional investor employed as a portfolio manager with MacKenzie Investments for almost 25 years. His responsibilities included managing ten billion dollars in assets.
I have encountered many investment advisors but Paul is the first portfolio manager I have met. I was curious whether he would be critical of my emphasis on investing safely in financially strong stocks paying high dividends. His written comments were recorded by me into the dialogue for the podcast.
What the podcast is about is how now faced with the sale of a stock where was I going to invest that cash. I have not had to buy or sell a stock in several years.
Usually most investors are speculators trying to quickly buy and sell their stock at the earliest opportunity to gain a profit or to avoid a loss. Would Paul see my infrequent trading and careful stock choices as contrary to a professional's approach to investing?
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
imacd@informus.ca
Podcast 269
4 April 2026
Safe Dividend Investing
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast #269, recorded on April 4th of 2026. My name is Ian Duncan MacDonald. I am the author of seven investment books. My latest book “Achieving Financial Independence Safely – 200 NYSE Exchange Stocks Analyzed and Scored” was available for delivery from Amazon on January 3rd.
To learn about the benefits of my investment books, please visit my website www.informus.ca. Alternatively, you can also do a Google search or an Amazon search for "Ian Duncan MacDonald books”. Reviews by readers and sample chapters are available at Amazon.
This week’s podcast will be a bit different. Paul Musson was a former professional fund manager with Mackenzie Investments one of Canada’s largest asset management companies. It is a subsidiary of Power Corporation that employs 5,000. Paul adds interesting comments to the material in my podcast. He has supplied a short biography towards the end of the podcast.
It has been several years since I either bought a stock or sold one. I manage several portfolios for my wife and myself. Between us there are a total of 30 different stocks in these portfolios. Several portfolios contain the same stocks. I would prefer that the number of stocks were closer to 20 to reduce the amount of work. Over the last 20 years the numbers of stock being monitored has crept up.
PAUL: Yes, if properly diversified no more than 15-20 stocks are required. My European Fund at one point had 13 holdings and it had by far the lowest standard deviation in the category.
The reason I do not need to trade stocks more frequently is I have a golden rule that says, “Only sell a stock when its IDM score falls below 50 and at the same time it stops paying a dividend yield of 5% or more. The chances of these two factors occurring at the same time is so rare that years go by without a change needing to be made. To me this is proof that if by using my scoring method you choose financially strong stocks paying high dividends for your portfolio that you will find the following two things will occur.
PAUL: Great to have rules to guide your decision making rather let those decisions be influenced by the emotional ups and downs of the market.
(1) The share value of your carefully chosen strong stocks will show a net increase in your total portfolio over a year.
Unless there is a severe bear market.
(2) As the share prices increase you will also find that in most cases these companies will increase their dividend payout amounts to maintain their high dividend yield percent. If the stocks should then show a decline, you should see the dividend payout remain steady which causes the dividend yield percent to increase. The dividend payouts usually go up at a higher percentage gain then the share price.
PAUL: The dividend yield for a declining stock will obviously only go up if the company doesn’t cut its dividend. As you know, sometimes a stock, declines because investors are correctly expecting a dividend cut. Other times not. But if your style is higher quality with strong balance sheets then the odds of a dividend cut are low.
Do you have empirical evidence of dividend payouts rising at a faster rate than the share price?
Since I have 30 diversified stocks I find that they will be going up or down at various times. They never move in the same direction at the same time. It is not the nature of stocks to remain static
PAUL:For the most part I agree with this statement. Although during times of panic correlations can go to 1.
The Golden Rule helps take the stress and insecurity out of investing. Investors get nervous when the stock they have sunk their hard-earned money into declines by ten percent or more. They fear that the stock will go lower and maybe even go to zero. No one likes losing money. This is when you score the stock and see that while the share price may have declined the other elements that make up the grand score (which include book value, dividend yield, operating margin, volume of shares traded, analyst recommendations and price-to-earnings ratio) have remained steady or even improved. The share price is only one element in judging the strength of a stock. It can at most have only a 10% impact on an IDM score calculated out of a maximum of 100. Thus, it has minimal impact on the total score
PAUL: We used to share with our clients the stock performance vs. the underlying business performance. To your point, if the stock is down but the business continues to hum along then it’s a buying opportunity. And the share price is likely down due to short-term investors attempting to pick this year’s winners.
A share price fluctuation holds little more importance than just being a size marker. If you live off your dividend income like I do, what is important in judging the value of your portfolio is the reliability of the dollar amount you are receiving from your total dividend income and the growth over many years which is derived from the value of your total portfolio. Those two measurements along with the individual grand scores of all the stocks in your portfolio make you realize that the fluctuations in the price of one stock is just a fluctuation. If that stock’s grand score is still over 50 the share price will rise. Be patient and wait.
PAUL: Good
The executives working for that company have much more invested in seeing the share price increase than you do. They have the experience to do what they must do to reduce expenses and increase revenues to increase the stock’s operating margin. It will take time to push up its share price.
PAUL: I talk about this in my book. Whether or not this is good or bad depends on management’s time horizon. A short-tern horizon encourages debt-fueled buybacks, compromising on brand equity and a diminishment in the customer value proposition. A long-term horizon can result in lower profitability in the short-term but with the benefit of a much stronger business in the long-term which ultimately comes with a higher share price.
You will often find that the dividend dollar payout will keep rising as the share price accelerates. As the share price climbs the dividend yield percent will shrink as a percentage of the share price. For example, I bought a bank stock several years ago that was paying a dividend yield percent of 5.50% when its share price was $55.00. That share price is now $185.00. The dividend yield percent has fallen to 3.5%. Why do I not sell it? Because the IDM score is now a strong 69. The dollar amount of the dividend payout I am now receiving is much higher than what I was receiving when I first bought the stock.
PAUL: I agree with this although it seems to contradict your statement above about the dividend payout rising at a higher percentage gain than the share price although maybe I’ve misunderstood what you mean.
I live very well within the income I derive from dividends. That dividend income is constantly increasing as my strong stocks become stronger and their share prices increase. The urge to tinker with the stocks in your portfolio disappears when you know it is strong and generating more and more income. Supposedly as I got older my portfolio was supposed to shrink, or so I was told twenty years ago by an investment advisor who once handled my investing.
The only problem, if it is a problem, that you encounter with strong stocks is that they can become acquisition targets for other companies. For example, a stock that I will soon be losing from my portfolio is another bank that I bought for $33.00 a share many years ago. It was then paying a dividend yield percent of 5.6% and had an IDM score of 60. Over several years its share price increased to $60.00. It has now fallen to $35. Another financial institution now sees this low price as a bargain and its offer of $41 a share has been accepted. When the sale is completed, I will not have lost money on this bank stock purchase. Do I regret not selling it at $60 a share. No, because I have received steady dividend payouts from the stock for years.
PAUL: Good
I have never seen a need to speculate which is trying to guess when to sell a stock at its highest price or to buy it at its lowest price. I learned long ago that while no one can accurately predict future share prices, it is possible to buy financially strong companies with long histories of ever-increasing dividend payouts that can keep your portfolio of 20 strong stocks constantly growing.
PAUL: My team and I debated this for years. Obviously the more expensive a stock the lower the long-term return. We would adjust the weights of our holding based on a combination of quality and valuation risk. It’s not a timing thing i.e. we would not be implying that we thought a stock was about to fall in price, only that it’s long-term return was low due to its current high valuation. On the other hand I appreciate the simplicity of maintaining equal weights regardless of valuation as long as those stocks tick the high quality boxes.
So for the first time in years, I will be searching for a place to invest the money in this sale. Do invest it in one of my existing 30 stocks or do I look for a financially strong new company to replace it. This makes me curious as to how many stocks scoring over 60 that I do not already own that could strengthen my portfolio.
My search begins with my latest books either , “Canadian High Dividend Investing” or “Achieving Financial Independence Safely – 200 NYSE Stocks Analyzed & Scored”. In the chapter where all the stocks are sorted by score, I can find only three stocks scoring over 60 paying a dividend over 6% that I do not already own. They are TC Energy Corporation, Whitecap Resources and Birchcliffe Energy Ltd.
PAUL: Do you ever listen to the Simply Investing Dividend Podcast with Kanway Sarai. He’s based in Ottawa and I did a podcast with him last year.
I will now score these three with the latest 2026 data to see what changes have occurred since the books were published. The next step is to do a search though current research data to see what new stocks might now meet my expectations. Whatever new stocks I find will be compared with the stocks I already own to see where best to place my money. Out of these the three options, I am sure one obvious stock choice will appear just as it would for you.
Today’s podcast was all about showing you that you are just as capable as I am of managing your own portfolio and to choose safe, strong, high dividend stocks.
PAUL: Good for you for educating and thus empowering investors to make smarter/better decisions
The following is Paul’s short biography
I was a professional investor for 25 years managing $10 billion in assets. Most of my time was spent with Mackenzie Investments in Toronto. Today, I run my own investment consulting firm called Paddington Capital Management and I have a free weekly blog called Paulitical Economy (that is spelled PAULITICAL) which discusses things that are going on in the world but in very easy to understand terms: paddingtoncapitalmgmt.com. My book, Capital Offence: Why Some Benefit at Your Expense was recently published and is also available on Audible. The goal in writing the book was to educate people with respect to how an economy really works and thus empower people to demand positive change from our policymakers.
My hobbies/pastimes include birding, cycling and soccer. I am also a steam train enthusiast.
I am married with three daughters, and I live in the Toronto area.
That’s all for this week folks.