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 284 - IS IBM'S REVENUE PROBLEM A WARNING OF THE NEXT MARKET CRASH?
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Welcome to Safe Dividend Investing’s Podcast # 284 on July 18th of 2026.
Many investors believe we are living through a stressful time. Although our investments may have reached all time highs the future of our stock portfolios no longer seem to be as safe and secure as they were a few years ago.
Was the 25% drop in the value of IBM shares in one day, earlier this week, an unusual exception, or could International Business Machines be the first sign of a coming stock market crash? One that is bring triggered by inflated AI stock prices and the world wide turmoil caused by oil insecurity, wars and threatened invasions?
International Business Machines: "Wall Street views the century-old tech giant as a prominent enterprise AI players, heavily focused on integrating artificial intelligence into hybrid cloud solutions, consulting services included along with data management".
In this podcast I review IBM's historical and current situation while suggesting an investment strategy that can help you weather the storm of a the next stock market crash.
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
SAFE DIVIDEND INVESTING
Podcast 284
July 18, 2026
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast #284, recorded on July 18th of 2026. My name is Ian Duncan MacDonald. I am the author of seven investment books.
To learn more about my investment books, visit www.amazon.com and do a search for "Ian Duncan MacDonald books”. At Amazon you can find sample chapters and reviews by investors who have benefited from the books. More information is available at my website www.informus.ca.
Although my portfolio and many others’ portfolios have reached record value levels, at the back of my mind is a nagging concern. Whether we like it or not booming stock markets are followed by a stock market crashes and recessions.
Wealthy investors do not like instability and in mid July of 2026 we have many destabilizing influences. There are active wars in Iran and the Ukraine; an impulsive overthrowing of the government in Venezuela; threatened invasions of Canada, Cuba and Greenland; unprecedented high tariffs inhibiting trade, and finally the constant interruption of access to oil has inflated oil prices and dangerously depleted oil reserves.
To further threaten world stability the United States keeps saying it will withdraw from the eighty-year-old North Atlantic Treaty Organization. All this turmoil causes millions of individuals and businesses to pause their spending as they hope and wait for stability to return. Spending that would stimulate the economy is frozen.
Consumers know that if a long-lasting recession were to occur that millions will lose their jobs. Unemployment could reach levels of 10% or more.
The great Depression that started in 1929 was triggered by inflation, wild stock speculation and tariffs. Sound familiar to what is going on now?
That depression lingered for ten years. Unemployment reached 24.9%. Only the production demands of fighting the Second World War and later the rebuilding of Europe and the rest of the world resulted in full employment. Would North America escape catastrophic destruction this time if the current conflicts were to escalate?
There is usually a gap between recessions of two to 10 years. It has been four years since the last recession. It was a short one caused by the impact of the Covid 19 epidemic, but it shows impact of the unexpected.
In 1901 the assassination of President McKinley, a severe drought and a stock market crash caused a recession. A few years later in 1907 President Theodore Rossevelt’s efforts to break up monopolies led to a depression. Back then the monopolistic threats were not from Artificial Intelligence companies but from railroads. Unforeseen impacts of a serious disease or financial stresses can trigger a stock market crash.
The Great Depression that impacted my parents’ generation began in October of 1929 caused a massive psychological impact that lasted for decades. It was responsible for the growth of unions to protect workers; the establishment of government funded social programs to help the poor and the fear by politicians of a communist revolutions.
That Great depression established for several decades the belief that the stock market was a dangerous place to invest your money. Stories of speculative stock trading circulated of how even poor shoeshine boys had borrowed money to bet on rising share prices. They were convinced that they too were going to become rich overnight. When the bubble burst in 1929 and stock prices collapsed everyone who had borrowed money to invest were forced to sell their shares at a loss.
In 2026, we no longer have shoeshine boys but we do have a new generation of naïve speculators. It is disturbing to see them borrowing thousands to invest in questionable crypto currency and inflated AI stocks.
When I see the share price for IBM, an AI stock most would consider to be financially strong, drop from $302.05 down to $219.05 in one day, you wonder, Is this 25% drop, a warning of what is coming? It was the worst one day drop for IBM on record. The share price drop occurred after the company issued its second-quarter earnings reporting showing it had not reached its revenue projections.
IBM is a company that has been a leader in computer technology for about a century. It is considered be among the top AI stocks. It traded twenty-two million shares today. Thousands of investors must have lost hundreds of millions of dollars with this share price drop. Are the holders of AI stocks now debating whether this is just an unusual one-time occurrence or is it a warning of what is yet to come with other AI stocks?
IBM has gone through other gains and drops in the past. During the Covid market crash in 2020, IBM dropped to a low of $95.84 a share. In March of 2020 it had been at $107.82. After the crash in June of 2020, it was $119.53. Looking further back in historical records, in January of 2002 the share price was at $119.96 and dropped to $$68.96 in October of 2002.
When I scored IBM using the IDM stock scoring software. It had a very strong IDM score of 70 out of 100. I only invest in stocks that score 50 or more. (You can learn more about this scoring system at www.informus.ca). One of IBM’s strong factors in the score were the 12 buy recommendations by analysts. Their buy recommendations ranged between $250 and $375 a share. However, there was one brave analyst that recommended it be sold at $191.00.
The Chief Executive of IBM was quick to point out the share price drop was due to IBM adjusting their revenue forecasts downward. He blames the revenue decline on customers diverting IT budgets away from IBM software so they could purchase memory chips and servers ahead of anticipated price increases.
However, IBM is not a block of wood. This year’s IBM expense budgets were set based on projected revenues. If the sales are not going to be there, what expenses are they going to need to cut to reach their profit objective? How would such cuts further impact their revenue generating ability?
This decline by IBM is a good illustration of why you never invest in one stock, and you never assume that a company is so strong and so well established that you could never lose money owning its shares.
Fortunately, for the IBMs of this world, it takes decades to wind down and disappear. The decline is like a slow leak in the tire of a car. However, there is always the reality that eventually all companies do cease operating and are replaced.
The larger the company the harder it is to turn the ship around when it is heading for the rocks. Often, these long-established giants are caught between providing customers with the proven products that have provided profits for decades while they try to anticipate which new products will keep the established customers and attract new customers.
New customers are necessary to replace those customers lost through normal attrition. On average this could be an annual loss of 20% for many companies. This loss is encouraged by their competitors who are trying to seduce the IBM customers with products that they promote, as better, faster, less expensive products that what IBM has to offer. We live in a competitive world.
To counter the constant turmoil that takes place in the business world, ideally you want to invest equally in twenty financially strong companies paying high dividends. You can use the IDM stock scoring software to measure a stock’s strength.
You will quickly see that none of the major AI stocks is now offering to pay a high dividend of 5% or more to their shareholders. Interestingly IBM’s dividend yield percent of 3.09 percent is unusually high.
If you aspire to live off the dividend income of your stocks, you will soon see that you no longer need to worry about market crashes and recessions. You will not be forced to sell shares to pay your living expenses.
By looking at easily accessible historical records, you can instantly find stocks whose dividend payouts have never been impacted by market crashes and recessions. It becomes evident that there is no direct connection between share prices and dividend payouts.
If you have chosen well, you can go for decades without making changes to such a portfolio. The mad pursuit of chasing after stocks whose share prices will rise quickly so you can sell the stock and race after another rising stock disappears.
Interestingly I have found the share prices of strong high dividend stocks increase most years by 10% or more each year. Over time you will see the value of portfolio will have increased by several multiples just on normal share price growth. If you further invest the dividend payouts from the same 20 stocks back into those 20 stocks the value of your total portfolio, will rise even faster.
For capital gain. I have come to see that while paying $200 for a share of a major company may be impressive, if I were investing $200,000 in a stock, I would prefer to buy 10,000 twenty-dollar stocks rather than 1,000 two-hundred-dollar stocks. The odds that a twenty-dollar strong stock paying a 5% dividend or more will double in five years to a forty-dollars a share are far greater than a $200 stock doubling to four hundred dollars a share. To find just find a $200 stock paying a dividend of 5% or more is just about impossible.
Patience and the careful selection of strong, high-dividend stocks will lead to your financial independence. While the next major stock market crash may not hit this year or even next year, it is coming. Are you prepared for it?
That is all for this week, folks.