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Mutual Fund News

ME AND MY MONEY

Special to The Globe and Mail

Michael Kunce, 31

Occupation

Engineer

The portfolio

Thirty-three stocks including Enbridge Inc., Royal Bank of Canada, Fortis Inc., Pfizer Inc., Southern Copper Corp., Intel Corp., TransCanada Pipelines Ltd., Rogers Communications Inc. and Keg Royalties Income Fund.

The investor

Michael Kunce works as a project manager at an engineering consulting firm. Just barely into his thirties, he has already built up a portfolio worth more than $300,000.

How he invests

"I typically invest in companies that have strong brand value, reasonable dividends and a history of dividend growth," Mr. Kunce said.

Blended in with this emphasis on dividends is a focus on minimizing risks. Many Canadian dividend investors tend to be concentrated in the financial, telecom and utility industries (where the good yields are). But Mr. Kunce believes in diversifying more widely. He holds at least three dividend stocks (U.S. or Canadian) within each major industry group (11 by his count).

Mr. Kunce now only buys to bring an existing holding back up to its target weight, and only sells if a holding needs to be trimmed back to target. "The biggest advantage of this rule is that it forces me to buy low and sell high," he explains. "Emotional errors are eliminated."

Recent purchase

After Rogers Communications' stock plunged on news that Verizon Communication Inc. was coming to Canada, he purchased more shares to bring his holding back up to its target weight.

Best move

"I loaded up with REITs in late 2008 when the market was on its knees."

Worst move

"Ah, the human emotions ... In earlier days, I bought [BlackBerry Ltd.] shares when they were flying high. They dropped and I bought more. But I ended up selling for a loss."

Advice

"Find ways to either avoid or mitigate risks." Mr. Kunce offers more advice and details on his blog at dividendtactics.com.

Want to share your strategies? E-mail mccolumn@yahoo.com

© 2007 The Globe and Mail. All rights reserved.

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