dividend-strategy

name	dividend-strategy
description	Harvard Endowment-style dividend income analysis - yield, payout-ratio safety, DRIP projection, and tax-account placement for income holdings. Use when the user asks about dividends, passive income, DRIP, yield, payout ratio, dividend safety, or "what should I hold for income?".

Dividend Strategy (Harvard Endowment style)

Stage 0 - Decision Memory (load FIRST)

Before analysis, load prior decisions so verdicts stay consistent across sessions:

• mcp__aifolimizer__get_cross_ticker_lessons with max_lessons=3 - portfolio-level win/loss patterns
• For any name you issue a per-ticker BUY/SELL/TRIM/HOLD on, also load mcp__aifolimizer__get_ticker_decision_history (ticker=…, max_decisions=5) and mcp__aifolimizer__get_ticker_reflection (symbol=…, n=3).

Reconciliation rule: if a prior decision exists and your new read flips it, state explicitly WHY it changed (new data / catalyst / price move). Never silently contradict a logged decision - that drift is exactly what this prevents.

How to run

1. Call mcp__aifolimizer__get_profile - account types and cash balances. TFSA/RRSP/Non-Reg placement determines dividend tax treatment
2. Call mcp__aifolimizer__get_personal_context - province, marginal tax rate, account waterfall, FHSA. Grounds §6 tax-placement (which payer in which account) and after-tax yield. If present=false, flag placement advice as generic and suggest profile-setup
3. Call mcp__aifolimizer__get_portfolio - identify dividend-paying holdings
4. Call mcp__aifolimizer__get_fundamentals with symbols=[] (top 15 by weight) - extracts dividend_yield, payout_ratio, dividend_growth_streak, eps_ttm for all holdings
5. Use MCP data as primary source for yield, payout ratio, dividend growth streak
6. WebSearch only for: specific DRIP calculator projections and new dividend stock recommendations not in current portfolio
7. Before recommending any NEW dividend name as an initiate/BUY (§4), call mcp__aifolimizer__get_positioning_signals with symbols=[candidate tickers]. If crowding_score >= 70 the name is consensus-crowded (late entry = negative expected alpha) - defer the add or pick a less-crowded payer with comparable yield/safety; favor crowding_score <= 30 when the dividend is safe

Investor profile

• Canadian retail investor
• Dividend investing is one pillar (not whole portfolio)
• Account types and capital: always read from get_profile - never hardcode
• TFSA: dividends tax-free (Canadian stocks ideal here)
• RRSP: avoids 15% US withholding on US dividends (US dividend stocks ideal here)
• Non-Reg: Canadian dividends get dividend tax credit; US dividends fully taxable

Output structure

1. Per current dividend holding: yield, dividend safety score (1-10), payout ratio, consecutive years of growth
2. Unsustainable dividend flags - payout ratio >80% or declining earnings
3. 10-year DRIP reinvestment projection for current dividend holdings (show math)
4. 5 new dividend stock recommendations (Canadian or US, with tickers + yield)
5. Sector diversification of dividend income - flag concentration
6. Tax placement recommendations - which payers belong in TFSA vs RRSP vs Non-Reg
7. Projected annual dividend income from current + recommended adds
8. Ranked list from safest to highest-yield

After output - log decisions

For each new ticker recommended (initiate) AND any existing holding flagged unsustainable (TRIM/EXIT), call mcp__aifolimizer__log_recommendation with skill="dividend-strategy" (the param is skill, not skill_used - that belongs to log_trade_decision), ticker, action (BUY/HOLD/TRIM/SELL), conviction (HIGH/MED/LOW), target_pct + stop_pct (% from entry - the schema takes percentages, not absolute prices; entry is logged live at call time), rationale 1-line (yield + safety + tax placement). Feeds forward win-rate / track-record loop.

Rules

• Format as dividend blueprint with income projection table
• Under 500 words
• Always factor in actual account types from get_profile

Gotchas

• payout_ratio negative or >100% when EPS negative or near zero - flag as "unmeaningful", do NOT label dividend "unsustainable" purely from ratio.
• dividend_growth_streak from yfinance breaks on corporate actions (splits, spinoffs, ticker changes) - verify via WebSearch for any streak claim ≥10 years.
• US dividends in TFSA incur 15% non-recoverable withholding tax - TFSA-specific cost user often misses. Always call out.
• RRSP exempts US-listed US dividends from withholding only via US-Canada treaty; CDN-listed US-business ETFs (e.g. VFV) do NOT qualify - they leak 15%.
• Canadian dividend tax credit only applies to eligible dividends from Canadian corps; REIT distributions and US dividends do not qualify.
• DRIP projections assume constant yield and reinvestment price - state assumption, do NOT present as forecast.