Rising Rates and Dividends

How does one invest in a rising interest rate environment? The first thing I always try to do is ignore all the gurus out there who recommend stocks for you to buy.

I do listen to those who recommend a dividend growth strategy and pretty much block out all the others. Here in Canada there is a show on BNN called 'Market Call' and also 'Market Call Tonight'.

The highlight of the show is it's 'Top Picks' section near the end of the show where the expert recommends 3 top stock picks. In the course of the year that is over 1,000 recommendations for you to act on or not.

Can they all be right? I mean over a thousand stock picks in the course of a year from portfolio managers who make a living managing money.

Just ignore this nonsense is what I do. They are nice people but they change their minds on stock selection more often than most of us change our socks.

So what to do? Where to go for ideas and especially now in this environment, where the economists are saying expect at least 3 rate hikes this calendar year. Maybe, maybe not. I've heard this story before.

Rising interest rates are a sign of a strong economy. Don't get scared off buying stocks in this environment.

Also, don't let the high yield of a stock scare you out of a purchase, As the yield rises the price of the stock comes down.

Where to Look

I get ideas from a few different places as I navigate through the minefield that is the stock market.

Norm Rothery over at stingyinvestor.ca and a contributor at Moneysense magazine publishes a 'A' dividend stocks list every year. This year his list includes;

BMO, CM, GWO, POW/PWF, SLF and TD.

If you have any money to put to work this is a good starting place to implement a dividend growth strategy. Norm also runs a website over at stingyinvestor.ca

I also subscribe to Tom Connolly's website over @ dividendgrowth.ca. It is filled with a plethora of great advice and list of stocks to hold for the Long Run.

I receive no compensation for recommending Moneysense or Norm and Tom's website. I just like them and use them to hold my investing hand.

What are doing with your money as rates rise? What investments do you like in this environment?