In this special "Meet the Experts" series, we asked our investing and trading experts to speak directly with our readers, discussing their backgrounds, investment strategies, and reviewing their presentations at the upcoming The MoneyShow Toronto.
Keystone Financial is an independent equity research firm, so what we do is we do independent stock analysis for our clients and make recommendations on individual securities and my area of specialty for Keystone Financial is in dividend growth stock research.
When I say dividend growth stock, what that means is that’s a company, an equity that pays a dividend, but is also reinvesting a significant portion of their cash flow in excess of those dividends so it can grow with earnings, gross cash flow and gross dividends over time.
We started the dividend growth stock research approximately eight years ago and what we saw is we saw an opportunity because investors weren’t getting the appropriate amount of yield from fixed income investments.
With interest rates being so low it became extremely difficult for investors to generate any type of income in their portfolio.
What we do is we look for companies, individual companies in a wide variety of industries, so those range from things like energy, infrastructure, utilities, technology, industrials; we look for individual companies that are doing extremely well in their businesses, that are growing their businesses, paying a sustainable dividend, an attractive yield to investors and then offer attractive value.
We advise investors to purchase companies and look to take that time horizon of approximately one to three years or more when they’re investing in these companies and essentially what happens is as these companies pay dividends and they grow these dividends, the investors benefit from both increased income stream, but they also generally benefit from capital appreciation as well.
We found this strategy to be extremely successful in the market. There is a lot of interesting types of businesses out there for people to invest in and what it does, what stock investing does for these people is it provides them with an opportunity to benefit from growth in certain segments of the economy and to achieve their financial goals as well.
What we’ve done is we put together a program that we’re going to talk about at the MoneyShow. This program essentially teaches people to invest. It essentially takes a person who is a novice or an experienced investor and it helps to augment their skills in line in what we do.
What our goal is at the MoneyShow is to provide the attendees with a basic but very powerful suite of tools, tools that will allow them and help them to identify opportunities in the stock market to manage their own portfolios and make their own investment decisions and to perhaps most importantly to manage risks.
We find that there is a bit of a misunderstanding amongst investors when it comes to dividend investing, that the dividends are boring, low growth companies, when the reality is that actually not the case, that there are many exciting high growth opportunities in the dividend space and one of the things that we’re going to show people is that over time, dividend companies actually, massively have outperformed their non-dividend counterparts.
We’re going to show investors how this has happened and we’re going to explain to them how to pick, how to select different investments within the dividend growth stock space and also within other areas like small cap growth stocks as well and how to put together a portfolio which is going to beat the market.
This is something that we’ve been doing at Keystone in the small cap space as well for approximately 20 years now and this has been a very successful strategy for our clients. We have learned a great deal over this 20 year period and what we’re going to do is we’re going to teach people what we have learned.
We’re going to give them; we’re going to arm them with those tools so that they can make decisions, investment decisions for themselves. Even if they’re using an advisor, they can take that knowledge and they can make the best decisions for themselves so that they can be successful while investing.