Financial Markets Meltdown

[Map Maker]

Good time to invest. Great companies with 5% dividend. Risk but then you get chance for capital appreciation OR GIC for 5%.
Win win.


According to rule of 72. It would take 14.5 years to double your money at 5% compound interest.

[fishtank]

Wow 5.5% move on the s&p must be lot of pent up money looking to deployed. Day traders dream day .

[Drewski Canuck]

When the US Upper House and Lower House is grid locked, Stocks do very well.

Basically there is no Government intervention that can SC$$W things up, like say a Windfall tax on Oil Profits.

The uncertainty the Market showed yesterday has been answered. Nothing is going to happen to Economic Policy in the US. And frankly with all the Green Agendas which have been shattered by the reality that Windmills and Solar Panels will not keep people warm, this is the best news for the Green Agenda.

They have an excuse why they are not delivering on their promises: The Republicans are blocking their policies from becoming law. The reality of Thermodynamics does not have to be addressed by the Green Agenda people now that they are saved from delivering on their promises.

Drewski

[Map Maker]

OR to simplify,
over time markets will always trend up.

[bdub]

Apparently they have inflation licked.


Sent from my iPhone using Tapatalk

[fishtank]

put option selling for cheap … maybe in march

[fishnguy]

^ Cheap is relative, lol. Volatility is to the tits -> options are expensive. If the market settles in the next few days, there will be some good buys. I mean everything is up today and some stuff is way up just because.

Edit: RCL is up nearly 10% today and nearly 50% in the past month. NVDA is up nearly 15% today and about 35% in the past month. Meta is definitely up over 10% today just because.

[KGB]

Originally Posted by Map Maker

My bid at $29.05 hit so I am now “in with Zim”.

2 weeks ago when it was at $36, I did some calcs and my estimate that $29.05 is a fire sale book value.
Now I look at the charts and feel it can go lower.
Numbers haven’t changed, just my sentiment.

But I’m in now, so hope this isn’t another Dry shops fiasco and I make a tidy profit. I’ll re-evaluate next quarterly.

Zim declared dividend of $2.97 per share- about 10% - a far cry from the previous one. The stock was up 10% first but has been dropping steadily and is up about 1% up now.
Don’t forget a 25% Israeli withholding tax, so the actual dividend is more like 7,5%.
Any buyers?

[eric2381]

I would say the bottom is not yet in on ZIM.

[Map Maker]

Originally Posted by KGB

Zim declared dividend of $2.97 per share- about 10% - a far cry from the previous one. The stock was up 10% first but has been dropping steadily and is up about 1% up now.
Don’t forget a 25% Israeli withholding tax, so the actual dividend is more like 7,5%.
Any buyers?

Something wrong with ZIM’s books. I got out quick and it’s a dead stock to me.

Peyto on the other hand seems interesting.
They are locking in 2 year contracts in natural gas supply so their cash flow is constant.
With the known profits they are repaying debt and raising the dividend 120%.
Dividend will be 8.8% with ( I think) payout ratio of 30%.

All in their latest quarterly.
I’d be interested in other views.

[fishtank]

Teslas not doing well in this cold weather ….

[Dean2]

I have not posted for a very long time nor do I intend to going forward. This is my Christmas post wishing you all a very Merry Christmas.

Once again, this is not investment advice, merely relaying what I do personally. It is up to you to do your own research, assess your risk tolerances, goals and situation. Consult a quality investment adviser if you don’t have the skills to do the research yourself.

I have posted a couple of model portfolios over the past few years and continue to use them as a basis for evaluating stocks for the various portfolios. Our combined personal portfolio contains a lot of those stocks. Our current holdings ranked in order of largest to smallest percentage of the portfolio:

1. Freehold Royalties 13.2%
2. ZWU 13.4%
3. Royal Bank 10%
4. Pembina Pipeline 9%
5. BCE 6.3%
6. TD 6.2%
7. Telus 6%
8. TransCanada Pipe 6%
9. Alta Gas 5.8%
10. Ensign Energy 5.0%
11. Canadian Utilities 3.2%
12. U.S. Holdings being Visa and Coke 2.9%
13. REITS 1.4%
14. Emera 1.1%
15. Assorted small holdings 1%
16. Cash 9.1%

The only reason FRU and ESI are such large components is the purchase price versus current value and I have yet to trim those positions. FRU has more than doubled and ESI is 4X the cost base. They would never normally represent this large a part of my portfolio. They would typically be in the 3% range for FRU and 1% for ESI.

Below is the graph from the RBC Direct Investing pages showing growth of the portfolio over the past 2 years. It has for comparison the RBC Conservative Growth Portfolio (Typical 60/40 allocation) recommended by most advisers, and what most Conservative Balanced Mutual funds would produce. It also has the TSX performance as a Benchmark over the same period of time.

With the exception of FRU and ESI all the stocks listed are long term holds in the portfolio and at their normal weightings. Sixty four percent of the portfolio has a Drip in place, the other 36% produces the dividend revenue that funds our living costs. The only stock that does not pay a dividend is ESI. The weighted average dividend yield is 6.09% for the non-drip investments (ZWU resides in the no-drip portfolio), and 5.3% for the drip part of the portfolio.

Growth from January 2021 is 41% and from January 2020 it is 34%. The Conservative Balanced portfolio would have produced -2.5% and 6.0% respectively and the TSX 23% and 30.1%.

The point of this is, by holding through the recent volatility that started in March 2020, growth has still been very good while also producing virtually tax free dividend income to live on. Slightly beating the TSX index over the last three years, and significantly over the last 2 years, while producing enough income to live on works out quite well as index based ETFs and most mutual funds produce no income stream beyond the capital appreciation.
Had I tried to time the market over the last three years, I would have had to pay capital gains and it is highly unlikely I could have timed even half of the bottoms and tops. Missing out on even 30 days of up trend in the last 24 months, making sure it wasn’t a dead cat bounce, suckers rally, et al, would have negatively affected growth quite dramatically.

I hope some of you find this interesting and useful. Once again, Merry Christmas and Happy New Year to all.

[pikergolf]

Thanks Dean, and Merry Christmas!!

[Jim Blake]

Merry Christmas Dean to you and your Family!! I hope you had a great hunting season!!

[Fisherdan]

Thank you Dean, and merry Christmas.

[Dean2]

It occurred to me that if some of you just looked at the level of the TSX in Jan 2021 to Nov 2022 you would have trouble reconciling the graph as the index itself only shows a 14.6% increase. This should help clarify;

RBC Direct Investing uses the Time Weighted Rate of Return Method to provide an approximation of the performance of your portfolio over time. It adjusts for external cash flows (deposits, withdrawals, transfers in/out, withholding taxes, and federal/provincial taxes) to calculate performance.

The return of the profiles are based on total returns of the underlying asset classes. Standard market index returns are used as a proxy for the returns of the underlying asset classes. All profile and index returns include changes in share/unit value and reinvestment of all dividends or distributions and do not take into account management fees, commissions, expenses or income taxes payable by any security holder in respect of an underlying asset that would have reduced returns.

Like I have said many many times, the re-investment of dividends is a very significant contributor to portfolio growth.

The TSX has 1580 stocks in it. Here is the TSX 60, which represent a number of the dividend paying stocks.

1 Dec 23, 2022 TSX 60 List of companies by dividend yield
2 Symbol Company Yield Dividend Price 52w Low Beta Market Cap PE Ratio

3 TSE:AQN Algonquin Power & Utilities Corp 10.91% $0.98 $8.98 $8.83 0.18 $6,050 M 133.81
4 TSE:TRP TC Energy Corp 6.66% $3.60 $54.09 $53.53 0.51 $40,361 M 16.68
5 TSE:ENB Enbridge Inc 6.50% $3.44 $52.95 $48.64 0.57 $78,595 M 19.53
6 TSE:BNS Bank of Nova Scotia 6.26% $4.12 $65.82 $63.19 0.72 $57,465 M 8.2
7 TSE:BCE BCE Inc 6.15% $3.68 $59.84 $55.66 0.3 $39,987 M 19.37
8 TSE:POW Power Corporation of Canada 6.06% $1.98 $32.70 $29.76 0.75 $20,020 M 10.79
9 TSE:CM Canadian Imperial Bank of Commerce 6.00% $3.32 $55.32 $54.12 0.68 $36,722 M 8.28
10 TSE:PPL Pembina Pipeline Corp 5.78% $2.61 $45.12 $37.51 1.01 $24,887 M 9.38
11 TSE:MFC Manulife Financial Corp 5.47% $1.32 $24.15 $20.81 0.88 $33,376 M 6.44
12 TSE:EMA Emera Inc 5.34% $2.76 $51.71 $48.63 0.23 $13,944 M 17.32
13 TSE:T TELUS Corporation 5.25% $1.40 $26.68 $26.30 0.4 $27,935 M 18.39
14 TSE:SU Suncor Energy Inc. 5.02% $2.08 $41.41 $31.31 0.99 $41,030 M 7.48
15 TSE:CTC.A Canadian Tire Corporation Limited Class A 4.83% $6.90 $142.78 $139.24 0.94 $8,823 M 8.44
16 TSE:CNQ Canadian Natural Resources Ltd 4.68% $3.40 $72.63 $51.70 1.26 $59,074 M 7.08
17 TSE:BIP.UN Brookfield Infrastructure Partners L.P. 4.64% $1.96 $42.25 $41.48 0.51 $20,174 M #N/A
18 TSE:SLF Sun Life Financial Inc 4.58% $2.88 $62.94 $52.97 0.75 $27,046 M 11.6
19 TSE:BMO Bank of Montreal 4.55% $5.56 $122.09 $113.73 0.86 $60,675 M 6.11
20 TSE:FTS Fortis Inc 4.14% $2.26 $54.57 $48.45 0.15 $26,210 M 20.21
21 TSE:TD Toronto-Dominion Bank 4.05% $3.56 $87.82 $77.27 0.64 $117,273 M 9.28
22 TSE:NA National Bank of Canada 4.03% $3.68 $91.40 $82.16 0.82 $30,778 M 9.51
23 TSE:RY Royal Bank of Canada 4.01% $5.12 $127.73 $116.75 0.56 $129,744 M 11.55
24 TSE:CAR.UN Canadian Apartment Properties REIT 3.45% $1.45 $42.02 $39.08 0.71 $7,152 M 14.6
25 TSE:OTEX Open Text Corp 3.32% $1.31 $39.44 $34.72 0.75 $7,814 M 53.32
26 TSE:QSR Restaurant Brands International Inc 3.31% $2.92 $88.15 $60.37 0.7 $19,830 M #N/A
27 TSE:SJR.B Shaw Communications Inc Class B 3.31% $1.19 $35.94 $32.96 0.28 $13,189 M 23.57
28 TSE:RCI.B Rogers Communications Inc Class B 3.26% $2.00 $61.27 $50.53 0.25 $22,663 M 19.68
29 TSE:MG Magna International Inc 3.22% $2.42 $75.09 $63.55 1.27 $15,733 M 17.11
30 TSE:ABX Barrick Gold Corp 3.10% $0.73 $23.58 $17.88 0.02 $30,278 M 16.27
31 TSE:H Hydro One Ltd 3.09% $1.12 $36.29 $30.52 0.14 $21,727 M 21.14
32 TSE:AEM Agnico Eagle Mines Ltd 2.90% $2.05 $70.62 $48.88 0.51 $23,595 M 35.15
33 TSE:K Kinross Gold Corporation 2.83% $0.16 $5.66 $3.92 0.57 $5,228 M #N/A
34 TSE:IMO Imperial Oil Ltd 2.76% $1.76 $63.78 $44.42 1.22 $38,577 M 6.52
35 TSE:NTR Nutrien Ltd 2.63% $2.62 $99.53 $85.28 0.58 $51,801 M 5.21
36 TSE:GIL Gildan Activewear Inc 2.44% $0.90 $36.87 $33.83 1.01 $4,851 M 8.08
37 TSE:SAP Saputo Inc 2.16% $0.72 $33.36 $24.61 0.2 $13,981 M 34.2
38 TSE:CVE Cenovus Energy Inc 1.83% $0.46 $25.18 $15.29 2.05 $35,390 M 9.73
39 TSE:CNR Canadian National Railway 1.80% $2.93 $163.20 $137.26 0.4 $80,691 M 23.16
40 TSE:CCL.B CCL Industries Inc. Class B 1.65% $0.96 $58.19 $53.36 0.47 $10,293 M 16.76
41 TSE:TRI Thomson Reuters Corp 1.55% $2.37 $152.80 $119.23 0.31 $53,678 M 57.95
42 TSE:WN George Weston Ltd 1.53% $2.64 $172.23 $130.81 0.24 $24,432 M 11.94
43 TSE:WPM Wheaton Precious Metals Corp 1.49% $0.81 $54.28 $39.05 0.24 $17,981 M 22.67
44 TSE:MRU Metro Inc 1.44% $1.10 $76.39 $62.86 0.01 $17,988 M 21.74
45 TSE:TOU Tourmaline Oil Corp 1.44% $1.00 $69.58 $40.26 1.09 $23,519 M 4.32
46 TSE:L Loblaw Companies Ltd 1.33% $1.62 $122.23 $90.46 0.02 $39,678 M 19.27
47 TSE:TECK.B Teck Resources Ltd Class B 0.97% $0.50 $51.69 $32.68 0.82 $19,428 M 6.22
48 TSE:FNV Franco Nevada Corp 0.95% $1.74 $183.62 $151.07 0.36 $35,193 M 34.2
49 TSE:ATD Alimentation Couche-Tard Inc 0.93% $0.56 $60.19 $45.23 0.72 $60,581 M 15.79
50 TSE:WCN Waste Connections Inc 0.75% $1.36 $180.29 $148.05 0.39 $33,982 M 42.47
51 TSE:CP Canadian Pacific Railway Ltd 0.74% $0.76 $102.23 $86.12 0.71 $95,087 M 32.48
52 TSE:FSV FirstService Corp 0.67% $1.11 $165.92 $145.76 0.7 $7,334 M 47.67
53 TSE:FM First Quantum Minerals Limited 0.63% $0.17 $27.15 $18.68 1.67 $18,802 M 11.87
54 TSE:CCO Cameco Corp 0.40% $0.12 $30.05 $23.03 0.59 $9,517 M 103.6
55 TSE:SNC Snc-Lavalin Group Inc 0.34% $0.08 $23.20 $21.27 1.06 $4,073 M 363.12
56 TSEOL Dollarama Inc 0.28% $0.22 $79.98 $60.34 0.64 $22,974 M 30.88
57 TSE:CSU Constellation Software Inc. 0.26% $5.51 $2,137.13 $1,783.98 0.71 $45,289 M 68.76
58 TSE:BAM BROOKFIELD ASSET MANAGEMENT LTD 0.00% $0.00 $38.28 $28.23 #N/A $11,296 M 5.59
59 TSE:CAE Cae Inc 0.00% $0.00 $26.02 $20.90 1.36 $6,067 M 64.99
60 TSE:GIB.A CGI Inc 0.00% $0.00 $116.69 $95.45 0.69 $18,102 M 19.33
61 TSE:SHOP Shopify Inc 0.00% $0.00 $47.26 $33.00 1.62 $43,661 M #N/A
62 TSE:WEED Canopy Growth Corp 0.00% $0.00 $3.12 $2.79 1.64 $1,498 M #N/A

[cowmanbob]

Thank you Dean and have a very merry Christmas.

[Glion]

First off Merry Christmas Dean. And once again thank you for posting, it is very much appreciated.

[fishtank]

Merry Christmas Dean , and a big thank you .

[jan]

Thanks Dean,
Merry Christmas to you and your family.
I believe you're deeply missed in this forum.
All your posts helped many people. But today your post is like investment sweet Christmas recipe. Many people will follow your recipes. Thanks. Merry Christmas.
Wish you all the best

[livinthedream]

Hey Dean,

Thanks for all the great investment advice! Do you have a 5 year graph to compare? Thanks.

[Dean2]

Originally Posted by livinthedream

Hey Dean,

Thanks for all the great investment advice! Do you have a 5 year graph to compare? Thanks.

This is ten years of the Drip side of the portfolio. I can't go back more than 3 on the non-drip, income generating component, as that segment I completely redesigned and restructured 3 years ago to fit current requirements. The Blue line is the Portfolio, Green is TSX, Orangy-Brown is RBC Standard Conservative Profile.

To be clear however, the investment mix has not looked the same over that whole ten year period. Best example is REITs are now under 2%, used to be a fair bit bigger component 2 years ago. Even in buy and hold portfolios you need to make changes to account for market conditions going forward.

Like I have explained in earlier posts, if you buy and hold the wrong stock for 20 years you can break even or lose your butt. Think Kodak and GE, great Blue Chip stocks in their day that made you a lot of money, that if you had held them till now would have lost a ton of money. Buy and hold is NOT just as simple as buying 20 stocks and sitting on them for 30 years or signing up for the Conservative Balanced portfolio Mutual fund at the bank, as the graph below clearly demonstrates. Fourty percent growth over 10 years absolutely sucks and isn't keeping up with inflation.

It is VERY important to be holding the right stocks, at the right times. Some top picks like RBC haven't changed in 120 years, but those are few and far between. There has been RBC and TD in my portfolios since 1980, Communications since Telus went public and sold shares to the public, and pipelines for nearly as long, but with how energy is moving there will come a time to rotate out of them too.

Hope this helps.

[fishnguy]

Glad to see you are still around, Dean. Merry Christmas and Happy New Year to you and yours.

P. S. Wouldn’t mind if you posted some feedback on the new knife in that knife thread

[Dean2]

One more comment, if you don't have the interest or background to do your own investments, and you can't find a quality advisor that you can afford you may wish to investigate buying a simple, passively managed TSX Index ETF for 70% and a Dow Index ETF for the other 30. Very few Mutual Fund Managers or Advisors can consistently beat the Index rate of growth, let alone beat the Index with full Dividend reinvestment factored in. Why pay someone 2.5 to 3% a year to do no better than the basic Index.

This is just one example from BlackRock. Personally I am no fan of Blackrock but they are cheap fee wise.
Fees
Management Fee 0.05%
Management Expense Ratio (MER) 0.06%

https://www.blackrock.com/ca/investo...ssthrough=true

[Dean2]

I have received PMs and texts from quite a few guys asking if I think interest rates have peaked, and will we see a recession. I don't have a crystal ball, but historically, inflation does not abate until interest rates are at or above the inflation rate, so I see rates going up at least another 3%. I also see a recession being forced in order to create demand destruction, which only happens when purchasing power is eroded. That happens primarily through slowing the economy and creating a bunch of unemployment.

All forms of tax, including levies, user fees, utilities, property taxes and income tax will continue to rise so that governments can finance the debt they have built up from their never ending profligate spending.The Bank of Canada and the Government are not your friend. They will screw over the average tax payer in the blink of an eye.

My suggestion, lock in any variable rate debt, pay down as much non-deductible interest debt as possible, and if your job is at all vulnerable to lay off, stock pile 8 months worth of living expenses. If you have family on fixed income, consider if there are ways you can help them out, because they are getting pummelled, and it will only get worse.

Happy New Year, but it is going to be a challenge to make that come true.

[mac1983]

A good read on the state of the Canadian natural gas market.

https://rbnenergy.com/out-of-this-wo...ian-gas-market

[Dean2]

Just a heads up for you younger fellows that have kids and are saving for their education by way of RESPs. I was helping out a young man that was trying to improve the pathetic return he was getting on his two kids, bank based RESPs. In the process of going over his statement I noticed their were no annual deposits of grant money. It turns out the bank never registered the kid's SIN numbers with Employment and Social Development Canada for the GESD. (All children in Alberta are issued a SIN at birth). Without the Bank doing that, no grant money. Issue now is, going to be a fair amount of paper work to go back and retroactively claim the benefits. It also means he lost out on the gain and compounding on the missed grants.

If you have RESPs, check to make sure you are getting all your grant money every year, and also have a look at the book value versus the current valuation. RESPs can be held in self directed accounts, just like RRSPs and other investments. This allows you to buy ETFs, stocks etc, whereas most bank based REPS only allow a very limited selection of in house Mutual Funds to be held. The high fees on those mutual funds, what you pay the advisor on top of that and the lacklustre performance, means the return over many years is pretty low in most cases. The cost of education is climbing rapidly, and any decent RESP should at least double over 12 years. If not, need to look at alternatives.

https://www.canada.ca/en/revenue-age...rant-cesg.html

[eric2381]

Bang on again Dean. Thanks. With the grants available, even if the money you put into a self directed RESP is not invested at all, you’re gaining 20% right off the hop with the grants. To a maximum of $7200 per child in grants.

I just recently took over managing my children’s RESP myself. Before that my wife had been contributing and the bank was investing it on her behalf. When I called and asked about it, the money was invested in GICs based on the performance of banks and utility companies. Solid companies, but very passive and low returns. Which is just fine at times for most people lacking an understanding.

Have a great day. Thanks again.

[fishtank]

Bank of Canada expected to announce a 0.25% hike on Jan 25. As natural gas and gas price has came down(subsidized by the suspension of fuel tax ) but diesel fuel remains high. Inflation Cost of food, housing and taxes is still up .

[bdub]

Originally Posted by fishtank

Bank of Canada expected to announce a 0.25% hike on Jan 25. As natural gas and gas price has came down(subsidized by the suspension of fuel tax ) but diesel fuel remains high. Inflation Cost of food, housing and taxes is still up .

The latest thinking is this is the last hike. The comments at the next announcement from the BOC and the FED will give us some idea on what they are thinking but I expect a pause after the next one. Inflation started rolling over in June. We will see how bad rates slam the brakes on but I think the time to position your portfolio for falling rates is here and has been here for a couple months now. The yield curve inversion started to reverse trend back in November or so.

https://www.bankofcanada.ca/rates/price-indexes/cpi/
https://www150.statcan.gc.ca/t1/tbl1...pid=1810000401
http://www.worldgovernmentbonds.com/country/canada/