I was mildly surprised today to come across an Aug. 20 Canadian Press article containing an interview with Derek Foster, the self-published author of investing books who sold his portfolio near the bottom. This unexpected move is still a topicof discussion on the web, as this post on the Independent Investor websitedemonstrates.
In the press piece, entitled With a few simple strategies, new investors can enter the market with confidence, Derek Foster is back to promoting dividend stocks as an easy-to-follow approach for inexperienced investors. Here is an excerpt:
Foster said the most important thing an inexperienced investor should look for is companies that pay dividends.
When you focus on dividends, they have to get the cash from somewhere, they can’t snap their fingers and make it appear out of thin air,” Foster said.
“If they’re sending you regular cash, they are making some money somewhere.”
Foster said dividend re-investment programs save you money on fees since your earnings are re-invested automatically after the initial shares are purchased.
“So the beauty of that is once you set up your program it just runs on auto pilot. You’re not tinkering all the time, you’re just letting it go,” Foster said
Also, Derek was recently in a podcast on www.cbc.ca/podcasting/ and was featured in the Halifax Chronicle HeraldJuly 24. In the latter, the reporter says Derek is spending more time watching the stock market and trading options — but he is also traveling and still promoting his books. Here is an excerpt:
“Then the recession hit and markets tumbled. Mr. Foster hustled and sold everything in his online brokerage accounts last February.
These days, the 38-year-old said he deals with stock options, a more complicated form of investing that boils down to bidding to buy shares as the value drops.
Rather than being a lazy investor these days, hes spending a lot more time watching the stock market and protecting his portfolio than he did during his early retirement.
He is also continuing to travel and to promote his books, and the strategy of buying stocks and holding them for the long term. His books are available nationally and through his www.stopworking.ca website.
Mr. Foster does not believe the financial markets will turn around any time soon, but he said his strategy of buying stocks for the long term and reinvesting dividends remains valid.
“Begin with just $200 per month and you can retire in your 30s,” he said