My Dividend Journey at 22 Years old 🇨🇦
Like most others my age, I started investing without a clue as to what I was getting myself into. I was a classic "yield-chaser", big number (high yield) makes number go bigger, ooga booga! Good luck trying to explain to my formerly simple mind what NAV erosion is, all quiet on the frontal lobe there.
As my portfolio has grown, I've made a conscious effort to future proof my investments while still hovering in my allowed risk range. I do still invest mostly in dividend paying stocks, after all. Average yield around 11%, and steadily maintaining that rate. Last year I gave myself the go ahead to usher in THE GREAT RE-BALANCING. Most of my dividends, at this point, came from yield trap ETFs, ULTY and MSTY to name a couple. As a naive new investor, watching these positions outperform my Canadian Financial ETFs, I wondered to myself why more people weren't leveraging this "strategy". Then, thanks almost entirely to the blossom community, I realized the error of my ways.
Learning how dividends actually work changed my perspective. There's no magical money making machine... Unless you're insider trading from within the Government. The dividend is taken out of the share price on the ex-dividend date, lowering the value of the share by the dividend amount. If the company can't recover from that dip in value, your investment will slowly shrink. This simple math was the catalyst for my decision to re-balance my portfolio.
I started slowly selling off my more high risk positions, realizing the loss. Most of these shares were held in my TFSA, so there were no tax ramifications for my actions. I lost a couple grand, and that red number bothered me. But zooming out, the number wasn't entirely accurate, not nearly as bad as first perceived. These positions had been paying out high distributions, which was all being reinvested in safer ETFs, like XEQT, VDY, or BANK. So yes, I lost money, but these high-yield ETFs were being used to fund positions that I still hold today.
It's interesting looking back at my 2025 dividend allocations, and comparing it to 2026 so far. I'll easily surpass last year's distributions with my safer choices. If anything, this has been a lesson in patience, I've learnt to slow down and avoid the "get rich quick" trap. It's nice seeing green for a change on the NAV side.
Below are my 2025 versus 2026 allocation charts so far: ULTY and MSTY went from 40% of my income to under 10% (they're completely phased out, that number won't go up). I still have the rest of October, November, and December to surpass my 2025 total.
If you have a similar story, please let me know. I love reading how the blossom community has solved their problems. Until next time. Chad out.
