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Mutual Fund News


Special to The Globe and Mail

Calvert Lum, 44


Financial planner at a chartered bank


Includes shares in TransCanada Corp., Shoppers Drug Mart, Power Financial, Toronto-Dominion Bank, Teva Pharmaceutical and Suncor Energy.

The investor

Calvert Lum is a financial planner who "believes that anyone can invest for themselves if they are willing, and have the time, to do their own research." Mr. Lum also heads an investment club within the Canadian MoneySaver ShareClub network.

How he invests

He prefers dividend stocks. Shares in companies that regularly raise their dividends are particularly welcome. Over time, the rising payments not only help increase the price of the stock, but also generate a higher yield on invested capital.

In fact, the dividends on some of his long-term holdings have been raised so many times that the yields are now in the double digits. To further enhance his returns, dividends are passively reinvested through dividend reinvestment programs.

One example of a company with increasing dividends is TransCanada Corp. It has a stable business, few competitors and growth potential. Another example is Shoppers Drug Mart, a defensive holding and a play on demographic trends.

Price fluctuations don't matter much while he is invested. What's more important is building a stream of steadily rising income. With this kind of focus, it is easier to stay invested long term through the ups and downs of the stock market.

But prices do matter when purchasing dividend stocks. Mr. Lum wants to acquire them when they are value-priced, meaning they have low readings on metrics such as price-to-earnings ratios.

Best move

"Belief in Warren Buffett's quote 'Be fearful when others are greedy and be greedy when others are fearful' led me to use leverage during the market bottom of 2009 to buy quality Canadian financial companies."

Worst move

"Investing in tips from experts on a financial news network."


"Invest in yourself. Continually read and learn about the world of finance and the investments you may be considering. Find yourself a mentor to bounce investment ideas off."

Want to share your strategies?


© 2007 The Globe and Mail. All rights reserved.

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