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Long Term Dividend Investing And Bank Shares

Summary

  • An approach to long term dividend investing with quality banks.
  • An approach to dividend investing dividend growth and reinvestment of payouts.
  • Several investment options that offer greater than 3% annual dividend return.

Market fluctuations have the tendency to make unsecure investors nervous. History will show that over the long run, even factoring in periods of market volatility; equities generally provide the best return on investment for retail shareholders. When dealing with market fluctuations one of the keys to success is simply to remain calm. It is important for retail shareholders not to sell their positions during short term fluctuations in the market. Simply put, short term fluctuations should not impact buying and selling decisions for long term investors.

To extend on my thoughts, I highly recommend young investors to begin accumulating a position within the Canadian banking sector. If an investor approaches investing with a long term plan which includes not allowing short term market fluctuations affect their buying and selling patterns then they will be in a very good position to reap the long term benefits of Canadian bank shares. Historically, Canadian banks have gone up in value, but there have been times that they significantly decreased in value, such as in the 2008 global financial recession.

What remained consistent is that they have always increased dividend payouts over time in parallel with growing profits. As the banks grow their dividends, investors who hold their positions reap the most benefits. Once the investor takes a position the cost of the stock does not change. but ideally the dividend that the investor receives will increase over time. Therefore as dividends rise the yield also increased on the shareholders shares.

The Canadian banks each have their own story and unique areas of growth but are all highly profitable, with strong dividends and fundamentally sound organizations. It is in my opinion that at present there are very few reasons to believe that the value of Canadian banks should decrease in the near or midterm. One approach to the sector is to build a position and reinvest the dividend payouts. In addition, contribute by increasing the originally position regularly or in line with the dividend payouts. The investor could reap the benefits through of the dividends, increases in the dividend payouts and possible through appreciation in the stock price.

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Long-term strategic dividend investing:

Toronto-Dominion Bank: Canada’s Best Export

Summary

Since TD Bank’s more sizable acquisition, Commerce Bank, in 2008, the bank has gained a solid foothold in the U.S., and is now crowned as “America’s Most Convenient Bank.”

TD Bank has grown through a number of acquisitions that have led it to become a top 10 bank in the USA with significant retail.

TD is quickly becoming best-known as a U.S. bank with a strong dividend and steadily rising stock price. TD presents healthy exposure to the U.S. banking industry.

Since Toronto-Dominion Bank’s (NYSE:TD) more sizable acquisition, Commerce Bank, in 2008, the bank has gained a solid foothold in the U.S. by maintaining and focusing on the highly customer-driven strategies, which have been the core focus in Canada. The philosophy, which was adapted from its Canadian retail operations, has allowed the bank to crown itself America’s Most Convenient Bank. While the Canadian banks have grown handsomely in the domestic markets, some have attempted to take on foreign markets, such as Bank of Nova Scotia (NYSE:BNS) and its efforts in developing nations. Bank of Montreal (NYSE:BMO), through acquisition, has increased its presence in America, but the efforts are still bearing non-significant rewards.

In 2004, TD Bank became the majority owner of the remaining Banknorth Group, and renamed it to “TD Banknorth, N.A.” Hudson United Bank, based in Mahwah, New Jersey, became a target for TD Bank and was absorbed in July 2005. This acquisition expanded TD Banknorth’s presence in New York and extended it into northern New Jersey and Philadelphia. As TD Bank moved into 2006, there was still appetite for acquisition, and the takeover of Financial Services Corp. was completed. This acquisition gave TD Bank additional exposure throughout New Jersey. In the fall of 2007, TD Bank and Commerce Bancorp of New Jersey announced that they had signed a definitive agreement for TD Bank to acquire Commerce Bank in a stock and cash transaction. The deal was valued at $8.5 billion. Advancing into 2010, TD Bank demonstrated that there was still room for ongoing acquisitions and bought The South Financial Group located in South Carolina. This would give TD Bank significant exposure along the Eastern side of America. In late 2010, TB Bank moved into the automotive finance market with the purchase of Chrysler Financial, which was later renamed to “TD Auto Finance.”

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