Welcome to DSR Premium. November Issue. DSR Premium. About DSR Premium

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1 Welcome to DSR Premium Dear DSR member, Market Last 30 YTD S&P % 10.25% NASDAQ 8.83% 11.42% DOW JONES 6.43% 6.23% S&P TSX 3.81% 8.41% Thank you for reading our monthly premium newsletter that comes with your subscription to Dividend Stocks Rock. This is your site and exclusive newsletter. Feel free to send us an at to inquire about more information or to make a suggestion. November Issue We are very excited to publish this newsletter as our DSR portfolios celebrate their 1 st anniversary. While our investing platform was public only on December 9 th 2013, we were running our portfolios since October 1 st We are satisfied with the results so far as 7 portfolios out of 12 beat their benchmark and the other 5 are not too far behind. But being good is not enough, this is why we announced more changes in our portfolios in November. Here s a complete review of our 25K and starter portfolios with trades that will be done at the end of this month. DSR Premium 1. Welcome to DSR Premium 2. Starter Portfolios 3. 25K Portfolios 4. Portfolio Performance About DSR Premium The DSR Premium newsletter comes with an exclusive membership to Dividend Stocks Rock.

2 DSR Portfolios Reviews Overall, the idea of our portfolio is simple; we have created two types of portfolios: conservative and growth. All portfolios are 100% dividend stocks (except for the 500K portfolios). We believe our added value resides in selecting dividend growth stocks and you can do the rest by your own if you need fixed income. One of the main reasons we have decided to trade stocks in all portfolios after a year of operation is to provide you with a clearer view of each type of portfolio. Following our dividend growth model (you can read more about it here), we have decided to separate completely our conservative portfolio from our growth portfolio to avoid duplicate stocks. The idea is to illustrate a core portfolio with conservative stocks and use additional ideas for only our growth portfolios. Therefore, after these changes, there is very little overlap of positions between conservative and growth portfolios. USD Starter % vs 17.07% It is hard to follow any benchmark with only four stocks. The purpose of this portfolio is not to beat our benchmark but to provide a safe starting point for any investor. We believe these four stocks provide great diversification. These Blue Chips do business all over the world. We are not making any modifications to this portfolio. It is not the sexiest portfolio you will see at DSR, but these are four companies you can hold forever without taking too much risk. No Trades

3 CDN Starter % vs 15.87% The Canadian starter portfolio is killing its benchmark. However, we will make a trade at the end of November. We will sell our position in BCE (BCE) and buy Finning International (FTT). One of the main reasons why we are doing so is based on the fact that FTT s stock price recently dropped. FTT is the Caterpillar (NYSE:CAT) distributor in Canada. Times are tough in the mining industry and both CAT and FTT dropped on the market. We believe it is the perfect time to add a very strong company now trading under a 15 PE ratio and showing an annualized dividend growth rate of 6.8% (dividend payout doubles almost every 10 years) and a low payout ratio of 32.76% (compared to BCE at 90%). SELL BCE BUY FTT 25K USD Conservative % vs 17.07% This portfolio shows a great stability with stocks like BLK, JNJ, KMB and PG. We have decided to sell Helmerich & Payne (HP) not because it s not a good fit for DSR portfolios but because we believe it s not a good fit for a conservative portfolio. We will introduce a utility company instead, Wisconsin Energy Corp (WEC). WEC will provide additional stability and represents a better choice in terms of dividend payout. The second transaction is to sell Aflac (AFL) to replace it with Clorox (CLX). Aflac has been struggling to generate growth over the past 12 months and has continuously faced currency headwinds. Since the US dollar will continue to gain in strength, it s time to let AFL go and add another consumer stock with Clorox. Growth won t be spectacular with CLX either, but at least we will see some! SELL AFL SELL HP BUY CLX BUY WEC

4 25K USD Growth % vs 17.07% This is the portfolio with the most volatility amongst the small DSR portfolios. The main reason why we are modifying the portfolio is to ensure we don t duplicate too many stocks from conservative to growth portfolios. The only duplicate we will have is BlackRock (BLK) as the company shows both strong fundamentals and growth potential. We will sell Eli Lilly (LLY) and replace it with BLK. We will also sell Clorox (CLX) as its place is in a conservative portfolio and replace it with Garmin (GRMN). This company shows a strong base with its GPS business and comes with great growth potential as demand for fitness products surges. Calorie counters and heart rate monitors will definitely find its place under the Christmas tree this year. The last transaction for this portfolio is to sell the shares of Philip Morris (PM) and replace them with Disney (DIS). There are not link between two companies besides the fact that PM will have a hard time to sell to children while Disney will definitely show more success! The point was really to find a company that can boost its sales and profit in the future and I believe Disney can do this and PM won t. SELL CLX SELL LLY SELL PM BUY GRMN BUY BLK BUY DIS

5 25K CDN Conservative % vs 15.87% This is one of the rare portfolios to lag its benchmark by over 2% (there are only 3 portfolios underperforming by this much). We have a few positions showing a negative return over the past 12 months and this is what hurts the portfolio. Bonterra Energy (BNE) and McDonald s (MCD) are in the red. On top of this, we have a few stagnating positions with Power Corporation (POW) and Wal-Mart (WMT). However, we continue to believe we have a strong core portfolio in place and we would rather lag a little bit and not jeopardize our portfolio. We will sell Power Corporation and buy Finning International (FTT). We don t see growth potential for Power Corporation in the near future and we believe FTT can bring more to the portfolio. SELL POW BUY FTT 25K CDN Growth % vs 15.87% While our conservative portfolio lags behind, our 25K CDN growth portfolio is among our best performing ones. We have several high performers on both the Canadian and American sides. BDI, GS and HP had shown great volatility over the past few months but we believe in those positions for the future. After all, growth portfolios are designed in order to take additional risk. In order to avoid duplicate positions, we are also selling Eli Lilly (LLY) in this portfolio and adding Garmin (GRMN). Even though GRMN is trading at a high PE ratio, the potential is definitely there. SELL LLY BUY GRMN

6 Portfolios Returns Each month, we will publish our different portfolio returns along with transactions that occurred during the month. Portfolios were created on October 1 st Transactions will be made on the last day of November. Portfolio Return Benchmark Added Value/Loss CAD Starter 22.39% 15.87% 6.52% USD Starter 14.75% 17.07% -2.32% USD 25K Conservative 19.28% 17.07% 2.22% CAD 25K Conservative 13.92% 15.87% -1.95% CAD 25K Growth 25.98% 15.87% 10.11% USD 25K Growth 19.95% 17.07% 2.88% USD 100K Conservative 22.67% 17.07% 5.60% USD 100K Growth 25.69% 17.07% 8.62% CAD 100K Conservative 14.69% 15.87% -1.18% CAD 100K Growth 11.69% 15.87% -4.19% USD 500K 2.15% 4.56% -2.42% CAD 500K 4.00% 3.83% 0.16% *Canadian portfolios added value is calculated based on 50% of VIG and 50% of XDV as half of portfolios are US stocks. Currency hasn t been taken into consideration.