This article analyzes the performance of a model dividend portfolio in 2024, highlighting the impressive gains achieved through consistent dividend increases and reinvestments. The author shares insights into their dividend investing strategy and demonstrates the power of passive income generation for financial security.
The 2024 results are in, and today I’ll be taking a deep dive into how my model dividend portfolio performed last year. on Oct. 1, 2017, my primary goal was to identify companies with long track records of raising their dividends and a high probability of continuing to do so. The goal of the strategy, which I follow in my personal portfolio as well, is to generate a stream of cash flow that will continue to grow.
Now that I am semi-retired, I can confirm that having a source of passive income that climbs steadily does wonders for one’s sense of financial security. In 2024, all but two of the 19 companies in the model portfolio raised their dividend or distribution payouts to shareholders. The exceptions were SmartCentres Real Estate Investment Trust (The growth in income since the portfolio’s inception has been dramatic. When I launched the portfolio with $100,000 of virtual money on Oct. 1, 2017, it was generating $4,094 of income annually based on dividend rates at the time. Thanks to scores of dividend increases and regular reinvestments of cash, the portfolio is now throwing off a projected $7,995 of income annually – an increase of about 95 per cent. I’ve seen a similar percentage increase in income from my personal portfolio. The best part? I didn’t have to lift a finger to receive this extra income. The companies did all the work for me. I almost feel guilty receiving all that extra money. Not really.As of Dec. 31, the model portfolio was worth $177,597.61, up from $151,281.40 at the end of 2023. That represents a total return, including dividends, of about 17.4 per cent. Normally, I would be thrilled with such a return, but 2024 wasn’t a normal year. Driven by falling interest rates, Canada’s S&P/TSX Composite Index rose 18 per cent, or about 21.7 per cent including dividends, as technology stocks, banks and precious metals miners posted big gains. But even that paled next to the total return of 25 per cent for the S&P 500 Index of U.S
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