. With inflation surging to a 40-year high as the economy emerged from its pandemic slump, the central bank hiked its benchmark rate by a total of 4.75 percentage points over a period of just 16 months in an effort to cool the economy. The bank’s overnight lending rate now sits at five per cent – the highest in 22 years.
Thankfully, the news hasn’t been all gloomy. On a longer-term basis, the portfolio’s returns are still very much in the black. As of Oct. 1, the portfolio was valued at $137,793.73, representing a total return of about 37.8 per cent since inception six years ago. On an annualized basis, that works out to a return of about 5.5 per cent, which lags the annualized total return of about seven per cent for the S&P/TSX Composite Index over the same period.
When you add up all the dividend increases I’ve received in the past six years, the gains have been substantial. At inception, the portfolio was generating about $4,094 of income annually, based on dividend rates at the time. Now, thanks to scores of dividend increases and regular reinvestments of cash, the portfolio’s annualized income has grown to $7,237 – up almost 77 per cent.