BTSX Stock selection method

Most retail investors – people like you and me – pay fees to financial planners who invest their money in expensive actively managed mutual funds that ultimately underperform the market. The ideal investing strategy is exactly the opposite:  simple, low-cost, and rules-based.

Twenty-five years ago a professor named David Stanley published a method of selecting Canadian blue-chip dividend-paying stocks based on a strategy south of the border called “Dogs of the DOW” which had been shown to consistently beat the index.

The method was simple:

1. List the stocks on the TSX 60 Index by dividend (Note: the TSX company has changed the organization of their indices occasionally.  The TSX 60 is the most recent collection of Canadian blue-chip companies)
2. Select the top ten yielding stocks of the index, provided they have a history of consistent dividend payments. Usually, these will be “TURF” stocks (telecoms, utilities, REITs, and financials)
3. Purchase these equities in equal parts (dollar amount, not number of shares) and hold for one year at which point the list is regenerated and the process is repeated.