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 285 - DREAMS OF RICHES, LAMBORGHINIS AND TRADING ON THE BEACH
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Welcome to Safe Dividend Investing’s Podcast #285 on July 25th of 2026.
I keep hearing how 90% of speculative investors within a few years lose the money they have invested in stocks. Often, I have wondered if this is an exaggeration.
Surely if the odds in stock speculating were that poor then people would cease speculating. Therefore, I was intrigued to come across an article by a speculator who describes the misfortunes of six young speculative investors over six years.
For over 20 years, the value of my boring portfolio of 20 stocks has grown, year-after-year, while providing me with the very generous ever rising dividend income that I live on.
After reading his article, I wrote to its author and he replied. His response gave me some valuable insights into investing which I share with you.
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 285
July 25, 2026
Greetings to investors all around the world. Welcome to Save Dividend Investing’s Podcast #285, recorded on July 25th 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.
Speculative investors love to tell stories about the killing they made in the stock market. Starting with a few thousand dollars they buy a few stocks that quickly turn int hundreds of thousands, even millions of dollars. However. I constantly hear that 90% of speculators within a few years lose what they have invested. It has been a puzzle to me as to how intelligent, motivated people can lose all the money they invest in stocks.
Thus, it was surprising to come across a speculator who was willing to write a tale that lays bare how everyone in a group of six, initially eager new investors, fared over six years. I wonder how many of you identify with them and their introduction to investing?
The group had never previously invested in the stock market. They were sure that they could learn how to get rich trading stocks, unlike all the failed investors who surrounded them. They were sure they were smarter and better able to predict which stocks were winners.
Day and night, they enthusiastically shared winning strategies, tips and investment insights on which stocks were going to soar in value and allow them to realize great wealth. Dreams of Lamborghinis and lolling on beaches in tropical paradises trading stocks danced in their heads.
What happened to each of them over the six years?
Investor #1, in a few months lost his initial stake of a few thousand dollars and came to the quick realization that investing in stocks was not his thing.
The other five investors pitied him for not having the stamina to persist in pursuing “the dream”. Investor #1 focused on his career, did well and invested his money in an unexciting index fund. He is now considered, six years later, to be financially better off than the other five investors.
Investor #2 is still pursuing the dream which he feels is close to being realized. His newest investment strategy is bound to move him from a loss to a big payout. He has been saying this before every new strategy over the last six years. In those six years he achieved profits for a few months to be followed by losses for several months. However, he has never lost enough to abandon pursuing the dream of riches.
During those six years, he has spent $15,000 on courses and investment tools to help him find that winning strategy. Countless hours have been invested in study and analysis.
Investor #3 had early success, which gave her great confidence in her ability to pick stocks. However, her gain of $40,000 evaporated when she took greater chances in her speculative investing to offset small erosions that started in her portfolio. She blames only herself for her loss. She quit trading and concentrated her energy on building a successful small business.
Investor #4 is the only one who can be seen as a successful investor. No Lamborghini or trading on the beach, but every day for a few hours he plods along making a few trades. He has found a niche that works for him. He treats investing like a job. He consistently grinds away, making small safe trades and realizes a modest but reliable income. Exciting strategies that will create great wealth are not made, which is probably why he has done better in his investing than the other five.
Investor #5 promotes himself as a very successful stock trader. This is necessary because after three years of unsuccessful stock trading, he created and began selling an unextraordinary investment course.
He has a following now and has learned that there is far more money to be realized in teaching stock trading than doing it. He is good at selling the dream of financial freedom, the Lamborghinis and trading on the beach.
His typical student, anxious to buy into the dream, can’t tell the difference between talking a good trade and actually making a good trade. Many investment advisors working at large financial institutions are also good at playing that investing sales game.
Investor #6, after four years of failing to make a consistent profit from investing, faced reality and copied investor #4. He ratcheted down his expectations and wrote off to experience the time and money that had been lost chasing a dream. He now invests modestly.
In retrospect he now feels that every investor should make a pledge before they begin investing in stocks. After giving it your best for a year and if it is not working, look at yourself and honestly accept that the dream of quick riches is not working and be satisfied with the unglamorous gains that exceed your small losses.
After reading this article I wrote the following to its author.
I really appreciate your article on speculative investing. I have often read that 90% of active traders lose their money and I have had difficulty understanding how this could happen. The approach you described is foreign to my approach to investing.
For decades, I built commercial risk databases. Therefore, when I started investing, it looked to me that the buying and selling of stocks was just another form of commercial risk. So, I built myself a stock scoring system using easily available free data on every stock, such as operating margins, trading volumes, historical share prices, dividend yield percentages, book values and so on.
My objective was to generate a reliable income to match my previous executive salary. It seemed logical to me to only invest in financially strong companies paying dividend yields of 5% or more.
I started doing this over 20 years ago. My portfolio has grown from the lower six figures into the seven figures – and is still growing. Not only do these strong stocks generate a good dividend income but most of their share prices increase by about 10% most years. I learned as share prices increase that many companies increase their dividend payouts to maintain their high dividend yields percentages. It is competition thing.
I was surprised during the market crashes of 2008 and 2020 that while the share prices temporarily dropped by more than 30% that the dividend payouts remained steady. Thus, I learned I can go for years without making any changes in my portfolio of 20 stocks. Market crashes become almost irrelevant.
About 10 years ago an 80-year-old window, a friend, came to me for help. The investments her advisor (at one of the major banks) had put her life savings into had lost $300,000 in three years. She was worried about being left penniless.
She asked me for help. Over a few months, I showed her how I invested. As a self-directed investor, she used my stock scoring software to pick the 20 stocks for her portfolio. Soon, she had not only recovered her $300,000 but also doubled her income.
She then pushed me to write a book that she could use to educate her adult children about investing. That book has led to six more investment books and a weekly “Safe Dividend Investing” podcast.
I think the difference between your group’s approach to investing and my solitary management of an income generating machine is that I never saw it as a game or a social vehicle. To me, it was just like running any business, you patiently and carefully do your research with the objective of generating a safe, steady income while controlling your expenses. It was never about achieving “great wealth”.
Interestingly, the author of the article replied. What strikes me is that you independently arrived at the exact inverse of everything my piece was describing, and it is worth identifying why your approach to investing worked. You treated investing as a business with a defined objective – a steady, reliable income – and then built a repeatable, data-driven process to serve the objective, operating margin, dividend yield, trade volume, payout history. You were scoring durability, not chasing excitement. And then you did the hardest thing of all, which is nothing – going years without touching a portfolio of 20 strong names while the crowd churned itself to death.
The details about 2008 and 2020 is the one I want people to pay close attention to. Share prices dropped 30%+ and your income never flinched, because you’d selected for the quality of the underlying business rather than the direction of the tickers. That’s the entire difference. My group was reacting to price. You owned cash flows and let prices do whatever they wanted. One of those is a business, the other is a slot machine with a candlestick chart.
The story about the window genuinely moved me – recovering her $300k and doubling her income by handing her a repeatable process instead of a hot tip is the opposite of the entire industry I was writing about. That’s what real help looks like – not a tip or a signal but a system she could run herself.
You’ve quietly done the thing almost everyone in my piece was loudly failing to do – and the fact that it looks unglamorous from the outside is precisely why it worked.
That is all for this week folks.