February 2011 - The Dividend Ninja

The Power of Preferred Shares

Preferred shares are often overlooked by dividend investors because of their lower growth rate as compared to common shares. Since they have a higher dividend yield, and preferred shareholders have rights to dividends over common shareholders, they certainly are worth looking into. The key point is preferred shareholders give up their voting rights in favour of a higher yield. In addition preferred shares are more complex than common stock, and have similar characteristics to corporate bonds that make purchasing them also more complex. However if you like high dividend yield with less market volatility, then preferred shares can make an …

Time to Sell Enercare?

by Dividend Ninja

Recently a reader asked me to take a look at Enercare (ECI), formerly the Consumer Water Heaters Income Fund (CWI.UN ). As I mentioned in a previous article – The Income Trust Countdown – many income trusts were purchased by investors only for the dividend yield, and in some cases that yield exceeded 10%. Of course with high yield comes high risk – but many investors seem to be indifferent to that fact. Now that most of these trusts have converted to corporations (other than REITs), they are under different tax rules and dividend obligations. Some Income Trusts have had …

Asset Allocation – Part 1: Risk Assessment

by Dividend Ninja

The premise of this article is that “Risk Assessment” is designed by the financial industry, and does not provide any useful indicator for the individual investor. I’ll argue that “Risk Assessment” has no bearing on proper Asset Allocation. Rather, your age is what should determine your investment risk. What is Risk Assessment? Mutual fund and insurance companies understand “risk assessment” very well. In fact they have it down to a calculated science, highly correlated with human behaviour and piles of statistics. For mutual fund dealers and investment advisors meeting with new clients, it all begins with the “Risk Assessment Profile” …