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Loblaw Cos. executive chairman Galen G. Weston. The food retailer announced this month it plans to create a REIT from its real estate holdings. (MIKE CASSESE/REUTERS)
Loblaw Cos. executive chairman Galen G. Weston. The food retailer announced this month it plans to create a REIT from its real estate holdings. (MIKE CASSESE/REUTERS)

ROB CARRICK

Portfolio Strategy highlights: How we fared in 2012 Add to ...

On Sept. 1, I wrote about a theme that continues to be relevant: The tendency of many investors to value safety above all. You can avoid stock market stress by investing safely, but can you reach your financial goals? Here’s a guideline offered by Bill Horton, chief investment officer at MD Physician Services, about who should avoid stocks. “If our clients have less than a three-year time horizon, we say, don’t invest in equities.” Read the column on taking too little risk.

On Oct. 13, I anticipated the boom in real estate investment trusts by a month and a half in a column that concluded REITs still made sense for income-seeking investors, even after strong price increases in recent years. REITs suddenly shot to prominence in early December as a consortium led by a private equity firm made a bid for Primaris REIT, and Loblaw Cos. announced plans to create a REIT from its real estate holdings.

It’s interesting to see a burst of activity in commercial real estate as the residential market cools. As noted in the Oct. 13 column, REITs today are arguably in a sweet spot of low rates and modest economic growth. Read the column on REITs.

On Nov. 3, I returned to the theme of investors hoarding money in do-nothing cash. Moshe Milevsky, finance professor at York University's Schulich School of Business, offered this no-nonsense take on the subject: “Every dollar in cash is a waste.” For those who aren’t budging from cash, the column offered a few suggestions on ways to maximize returns. Among them were investment savings accounts that can be bought and sold like mutual funds and offer yields around 1.25 per cent. Read the column on cash.

Topics on my to-do list for 2013: The argument for not investing in dividend stocks, the dollars-and-cents cost of fee-only financial advice and best bond ETFs for a rising rate world. If there’s anything you’d like to have me write about, drop me a note at rcarrick@globeandmail.com.

Rising Rates

 

5-yr

Cda Bond Yield

10-yr

Cda Bond Yield

Jan. 28, 2012 *

1.36%

2.04%

Dec. 19, 2012

1.38%

1.75%

   

* At the time of my column urging investors to be cautious about buying bonds.


Invest Abroad

 

YTD 2012 % Return

 (through Dec. 19)

S&P/TSX composite index

3.80%

S&P 500 index

14.20%

Dow Jones industrial average

8.50%

Nasdaq

16.90%

MSCI Europe Australasia Far East (EAFE)

13.70%

MSCI Emerging Markets

13.80%

MSCI World

13.50%

  

Note: All returns are in local currency

 

Dividend Growth

My March 3 column looked at an investing strategy called Dividend Deluxe, where you buy a dividend growth stock and allow rising dividend payments over the years to push up the yield on your initial investment. Here's the list of the Top 20 dividend growers to Dec. 31, 2011, with data on recent share price performance to Dec. 19. As you can see, it was a good to great year for most dividend growth stocks.

Company

10-yr %

Div.

CAGR*

(Dec. 31/11)

%

Yield

(Dec. 19/12)

$

Price

(Dec. 19/12)

%

YTD

3-yr

cumul.

% rtn

5-yr

cumul.

% rtn

Shaw Com.

44.2

4.10

22.81

12.6

3.6

-6.4

CI Fin.

38.9

3.93

24.45

15.9

14.9

-10.6

Agnico-Eagle

38.4

1.54

50.90

37.4

-11.5

2.1

Saputo Inc.

24.9

1.66

50.48

29.3

67.7

70.1

SNC-Lavalin

24.6

2.14

40.26

-21.2

-20.2

-17.3

Teck Res.

23.1

2.54

35.99

0.2

-7.3

1.9

Potash Corp.

20.4

2.07

40.05

-4.9

7.3

-8.4

CN

19.2

1.65

90.42

12.8

61.6

93.9

Suncor

17.9

1.59

32.69

11.4

-8.6

-38.4

Metro

17.4

1.35

63.66

17.9

69.8

131.6

Cameco

17.0

2.00

20.51

11.4

-35.5

-48.2

Encana

14.8

3.94

20.02

6.0

-38.2

-44.5

National Bk

13.8

4.30

77.85

7.9

29.3

56.5

Power Corp.

13.1

4.70

25.32

6.3

-9.4

-36.3

Bk of N.S.

12.9

4.00

57.97

14.0

20.4

15.6

Enbridge

12.4

3.00

42.55

11.7

77.2

117.1

Power Fin.

12.3

5.17

27.57

7.9

-9.3

-31.9

Gt Wst Lifeco

12.2

5.13

24.27

19.0

-8.4

-30.5

Royal Bk

12.1

4.01

60.53

16.4

10.4

21.3

Canadian Tire Corp.

11.6

2.01

69.06

4.8

24.2

0.0

S&P/TSX composite index

 

3.04

 

3.8

8.2

-8.8

       

* CAGR: compound annual growth rate.

Source: Morningstar Canada, Globeinvestor.com

 



For more personal finance coverage, follow me on Twitter (@rcarrick) and Facebook (Rob Carrick).

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