Our Approach
Bloom’s investment approach is centred around our belief in the long-term benefits of investing in income generating investments, specifically dividend-paying stocks, which has helped provide our clients with comfort to invest in the stock market.
For high-net-worth individuals and families, our investment approach can not only protect and preserve net worth, but also provide income that can be used for retirement, philanthropic ambitions, and more, without the need to withdraw from capital.
For endowments, foundations, corporations, institutions, trusts, and more, our investment approach can provide a more tax-efficient strategy as dividend-paying stocks have a lower tax rate. Income can also be used to fulfill the mandatory disbursement requirement for a foundation.
If an additional income stream is not necessary, we will reinvest the generated income, with the portfolio continuing to grow through our long-term investment approach.
Dividend-paying stocks have many benefits including:
Preserve Capital at times
of Market Volatility
Dividend-paying stocks have not only been less volatile, but also outperformed the broader market over many decades. Volatility in stock markets make it difficult for investors to preserve their capital while attaining a reasonable level of income. Dividend-paying stocks can provide this level of income.
Benefits to Canadian Taxable Investors
Investing in dividend-paying stocks substantially increases the after-tax rate of return for Canadian taxable investors given that dividends are taxed at a lower rate than other income.
Discipline on Corporate Management Teams
Companies that pay dividends need to set aside cash for this purpose. This gives management less flexibility for free cash flow deployment as a significant amount of cash flow is already dedicated to dividends and distributions.
Staying ahead in a Low Interest Rate or Inflationary Environment
In a low interest rate environment, interest payments on fixed income investments such as GICs are often insufficient to keep pace with the rate of inflation given that their payments are fixed and do not increase with inflation. Dividends, on the other hand, can and often are increased based on inflation affected earnings. Investing in dividend-paying stocks can therefore help you stay ahead.
Our Personalized Portfolio Building Process
We will work with you to understand your unique financial situation to create your actively managed, customized dividend-paying portfolio to meet your financial objectives.
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