In 2016, I took a daring step: I embarked on a sabbatical, loaded my family into a compact RV, and we journeyed to Costa Rica. This experience transformed my life. Upon my return in 2017, I formally departed from my private banking position at National Bank and devoted myself entirely to my new enterprise: Dividend Stocks Rock. I also initiated the management of my locked-in retirement account (LIRA) as a practical portfolio case study.
In August 2017, I received $108,760.02 and allocated the full amount into dividend growth stocks. Since then, I’ve been chronicling the journey—every peak and trough—not for self-promotion, but to assist others in learning through openness and monthly updates.
Portfolio Performance as of March 4th, 2025:
– Initial Investment (2017): $108,760.02
– Current Value: $298,398.10
– Dividends Paid (TTM): $5,197.46
– Average Yield: 1.74%
– 2024 Performance: +26.00%
– Benchmark Comparison: VFV.TO +35.24%, XIU.TO +20.72%
– Dividend Growth: +12.22%
– Total Return Since Inception: +174.36%
– Annualized Return Since Inception: 14.75%
For reference:
– VFV.TO (S&P 500 ETF): 16.48% annualized, 206.10% total return
– XIU.TO (TSX 60 ETF): 10.85% annualized, 112.90% total return
What Should You Do When Stocks Fall After Earnings?
This is a common inquiry.
Short answer: Avoid immediate reactions.
Longer answer: It depends on your investment strategy and timeline.
I received numerous messages about TFI International’s (TFII.TO) stock plummeting 30% following a disappointing earnings report—but none regarding Stantec (STN.TO), which surged 18%. Human nature often emphasizes losses over gains.
When a stock experiences a significant dip or rise post-earnings, it typically reflects adjustments in market expectations. Share prices are influenced by anticipated future performance, which are reassessed when new developments—such as earnings reports—emerge. For TFI, the 30% decrease in EPS corresponded with the 30% drop in stock price. Investors had hoped for an improvement, but management’s outlook indicated more challenges ahead.
So, What Do You Do?
Rather than making hasty choices or binge-watching YouTube for insights, I adhere to a straightforward, repeatable decision-making process:
1. Re-evaluate your investment thesis. How has it evolved since the earnings report?
2. Assess whether the concern is short-term or long-lasting.
3. Contemplate: Will this be significant in 10 years?
4. If uncertain, commit to a holding duration.
5. Monitor essential metrics or management actions throughout that timeframe.
6. At the end of that period, re-evaluate and make a decision.
For instance, here’s how I applied this method to Alimentation Couche-Tard:
– Investment Thesis: Still valid, though recent quarters have put it to the test.
– Temporary or Permanent? Management indicates the challenges appear temporary.
– Long-Term Perspective: I doubt I’ll recall this downturn in a decade.
– Patience Period: I’ll wait until Q1 2027—three years from the initial earnings weakness.
– Key Observations: Quarterly earnings, revenue, EPS, and their organic growth strategy.
– Next Steps: If no progress is evident by my designated timeline, I’ll contemplate selling.
This approach helps eliminate incessant second-guessing and promotes better sleep at night.
Example: Broadcom (AVGO) surged 54% in three weeks, then gave back 25% of that increase over the next six weeks. The net gain was merely 8%. Sometimes, it’s wiser not to overthink short-term price fluctuations.
Smith Manoeuvre Portfolio Update
My Smith Manoeuvre (SM) portfolio continues its upward trajectory—now consisting of 13 stocks across 8 sectors. It has a current yield of 4.08% and a 5-year dividend CAGR of 8.67%. Beginning in March, I raised my monthly contribution from $500 to $750, aiming to reach $1,000/month by 2025, funded through car loan savings.
As of March 4, 2025:
– Total Portfolio Value: $17,240.77
– Borrowed Amount: -$15,250.00
– Top Holdings: Franco-Nevada, Alimentation Couche-Tard, Exchange Income, Telus
– I’m utilizing my $875 cash balance to invest in Franco-Nevada, which I believe will benefit when