Strong Returns, a Temporary Income Setback, and Lessons From TELUS
The portfolio delivered another strong quarter, but the more important developments occurred beneath the headline return. We exited TELUS before its dividend cut, added selectively to three existing positions, and continued holding BCE and goeasy after their original investment theses changed.
Quarterly dividend income declined 5.0%, largely because of the goeasy dividend suspension and our TELUS sale. We expect income growth to resume as our remaining companies raise their dividends and we redeploy available capital into quality businesses at sensible valuations.
KEY TAKEAWAY: The portfolio remains ahead of its capital-growth target and close to its income target. More importantly, the process continues to function when individual investments do not go according to plan.
The Quarter At A Glance
*Annualized total return since inception
Portfolio Progress
Portfolio value and annualized dividend income since inception.
Since inception on May 1, 2022, the portfolio has generated a 17.19% annualized total return while building annualized dividend income of $4,731. The combination matters. Capital appreciation expands our future income-producing capacity, while growing dividends move us closer to financial independence.
Performance Versus Benchmarks
The portfolio gained 8.92% during the quarter and 29.57% over the past year. These are strong results, but they occurred during a favourable period for Canadian equities. We will continue judging the strategy over a full market cycle, with particular attention to both total return and dividend-income growth.
All returns include dividends. The 17.19% figure is the portfolio’s annualized return calculation since inception. Returns are calculated using Excel’s XIRR function and represent the portfolio’s annualized money-weighted return, reflecting the timing and amount of all contributions and withdrawals. Benchmark returns are time-weighted and are shown for general context rather than as a precise like-for-like comparison.
How We Invest
This real-money portfolio is both an investment account and a coaching tool. Every purchase, dividend, gain, loss and mistake is recorded in real time so subscribers can see how a disciplined process works when outcomes are uncertain.
My Wealth-Building Machine is built to do two jobs in retirement: generate a reliable, growing stream of dividends to pay the bills, and allow capital appreciation to expand the portfolio's value and create opportunities to recycle capital into higher-income investments.
This is not merely an income portfolio or a collection of stocks chosen for capital gains. It is designed to deliver both. Dividends provide the cash flow. Growth builds wealth. Together, they create a portfolio capable of producing attractive long-term total returns.
That is the Magic Pants approach: build the income, protect the capital, and let both continue to grow.
For Paid Subscribers
The remainder of this letter contains the complete quarterly playbook:
Trades and position-sizing decisions
Dividend-income details and portfolio holdings
The rationale behind the TELUS sale
Our current thinking on goeasy and BCE
Progress against the original business plan
