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Thursday, May 30, 2019

The Quebec stocks that you shouldn't hold inside your beautiful investment portfolio

Lately, a couple of Quebec stocks had increased their dividend, despite not having spectacular financial results, and without meeting their analyst expectations. Those companies are: 

Power Corporation of Canada Subordinate Voting Shares (POW)
Bank of Montreal (BMO)
Laurentian Bank of Canada (LB)
National Bank of Canada (NA)

We all want to earn more money, that's natural. Even me, after reaching $50 000 - which was all I really wanted when I started my blog, I just wanted more. And it's what it makes me reach my current network of $200 000+. Nothing wrong at wanted more, but you need to be careful about what you wish for, especially when it comes to dividend distribution. Those companies, POW, BMO, LB, NA had all failed in the same nasty track, for a reason or another, their management decides to increase dividend distribution despite the fact that expectations were not reached. Is that really surprising knowing that those companies are all Quebec ones??? For me, truly no. I had been a victim of really bad people while having to live in Montreal to make a living and nothing surprise me anymore. They have absolutely everything for themselves, but are extremely bad managers and have poor common sense, generally speaking.

While investing is stocks, it's ok not to understand it all, it's still my case despite the fact that I had been investing in stocks for over 10 years now. And I really don't care about many many things involving the stock market. Like I don't give a shit. But I have a precious gift that is tempted to be neglect in the years 2000: a good old fashioned common sense. And for me, if a company increased it's dividend distribution while having so-so financial results, my common sense tells me to stay the hell out of those stocks. Now, yes, I hold to some BMO stocks in my portfolio - I had those since a little now in my portfolio. However, I am seriously thinking to sell that one. The money I will get could pay down a bit my margin account. That wouldn't be a bad idea at all. 

I actually have a little bit going on as you can see. It's not because I don't plan to invest in stock for the next couple weeks that I don't have a fantastic investment live. I finally had the $1 500 I need in my banking account in cash. So starting next month, I won't have any banking fees to pay. It's ridiculous, to have a $200k+ net worth, and not to have a cent in a banking account! But I never bullshit anyone and I explained many times that when it comes to stock investing, I am an addict. And if that means not to have any money in the bank, well, it will mean that. :-)

But not anymore! (hope I can control myself and make this last).

Being a dividend oriented investor can be quite dangerous. Because while earning dividend, the only thing you want is TO EARN MORE, MORE AND MORE. Right now, Laurentian Bank of Canada (LB) dividend distribution comes with a high yield of 6.164%. At first, that may sound appealing, but it's quite an irresponsible yield. LB bank actually had a bunch of problems, especially with mortgage, they had giving some mortgages to some people that shouldn't have etc... I mean, how is possible to make such mistake???!!! And on top of that, LB overall chart is not strong. So it's a big no-no. Don't get fool by the appeal of a super high yield.

No one knows where the stock market is going to be next. Maybe we'll be facing a recession, some slowdown. And because of the stock market natural volatility, it's extremely important to be totally obsessed with the quality of the stock you invest in. Always, all the time. Earning dividend is a nice thing, but just earning more dividend for just earning more shouldn't be your top priority.

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