2024 Has Been A Banger. It’s Not Over Yet

Posted on by Dividend Daddy

As of earlier this summer, the stock market has been burning rocket fuel the last couple of years. The S&P 500 has soared by almost 57% from its lowest point in late 2022, while the Dow Jones and Nasdaq are up by around 37% and 77%, respectively, in that time. The TSX has lagged but it’s not a laggard in any respect. This has been and is boom time for stock markets in Canada and the United States and the recent interest rate cut in both countries (a couple of rounds of interest rate cuts in Canada) may continue to propel the stock market in both countries further, including for dividend stocks.

This is great news for FIRE (Financial Independent Retire Early) adherents or just those on the cusp of retirement or those with a few more years before being able to call it quits. Seeing my overall net worth continue to climb definitely is reassuring as I contemplate early retirement from full-time work (spoiler alert I may still work very part-time in early retirement to give me purpose and something to do).

Stay Invested (and Keep Investing)

Stay invested and keep investing as much as you can in the stock market. This is important for several reasons. If you aren’t invested, you are not in the game. Sure keep some money on the sidelines for a rainy day fund and for day to day expenses, but invest as much as you can. This graph says it all:

  1. Long-Term Growth Potential: Historically, the stock market has provided higher returns compared to other investment vehicles like bonds or savings accounts over the long term. Staying invested allows you to take advantage of compound growth.
  2. Inflation Hedge: Stocks have the potential to outpace inflation over time. By investing in stocks, you may preserve and grow your purchasing power, which can be eroded by inflation.
  3. Market Timing Challenges: Attempting to time the market by buying low and selling high can be very difficult, even for experienced investors. Staying invested tends to simplify your investment strategy and protects you from potential losses that come from mistimed exits.
  4. Dollar-Cost Averaging: By consistently investing over time (regardless of market conditions), investors can benefit from dollar-cost averaging. This strategy can lower the average cost of their investments, especially in volatile markets.
  5. Participating in Market Recoveries: Markets go through cycles, including downturns and recoveries. Staying invested during corrections or bear markets allows you to participate in rebounds, which can significantly enhance overall returns.
  6. Dividends and Income Generation: Many stocks pay dividends, which can provide a source of income. Reinvesting dividends can further contribute to the compounding effect of your investment.
  7. Psychological Benefits: A long-term investment strategy can reduce stress and anxiety about short-term market fluctuations. Knowing that you’re invested for the long haul can help you ride out volatility.

How has 2024 Treated Me So Far?

My stock portfolio as of September 28th is up just over $330,000. I shared this post on X (formerly Twitter) on September 25th.

2024 is far from over yet and with declining interest rates in both Canada and the United States, we are seeing a pivot from GICs and other like financial instruments back into dividend paying stocks, so I may see even more growth in value in 2024.

Of course, the above is made possible in part by my robust savings. To date in 2024, my annual savings rate expressed as a percentage of my after tax income, has been 49 percent. I shared this post on X recently that highlights my savings rate percentage by month this year.

The amounts below are savings into my stock portfolio plus high interest savings account. The figures are rounded to the nearest percentage and as of Sept. 27th. (This doesn’t include money put towards paying off money owing on my investment property in 2024).

What’s the Secret Sauce?

Honestly, it’s not a secret and their is no magic to it:

  • Be a valuist and increase savings
  • Invest as much of your savings as possible
  • Reinvest dividends

And then simply let the math do its mathing.

Stuff I Love

Below is a list of stuff I love. The list does contain paid referral links.

WealthSimple Trade: Trade stocks at no cost / zero commission. Great if you want to buy a small amount of shares in companies on a regular basis.

Questrade: A solid platform for investors looking to purchase individual stocks and ETFs. Fees are low to purchase stock compared to higher fees traditionally found to purchase shares through traditional big bank platforms and ETF purchases are free. My referral code: 815820681448330

Addy: This platform enables investors who don’t want the hassle of being a landlord and/or who can’t afford pricey residential real estate, to gain access to real estate investing for as little as a $25 annual membership (something Addy recently added to their platform in terms of an upfront membership fee – note there are properties you can access without paying the membership fee but you’ll have access to fewer properties to invest in). Click my referral link.

Wealthica: A secure way to track all your investments and progress in one place, including net worth, dividend, distribution (from Real Estate Investment Trusts (REITS) for example), and interest income, etc. They also produce handy visuals so you track your financial independence goals in a visual way. (I use Wealthica everyday and I highly recommend it for my Canadian friends/readers. Use my promo code: WDDividendDaddy10 and get 10% off the yearly premium subscription).

Simplii Financial: Tired of paying monthly fees for chequing accounts and paper cheques but still want easy access to bank machines at no cost? Simplii Financial allows unlimited bank machine transactions at CIBC bank machines and no cost banking.

Passiv: Passiv turns your brokerage account into a modern portfolio management tool. Build your own personalized index, invest and rebalance with the click of a button, and seamlessly manage multiple accounts.