Skip to main content

The Globe and Mail

Investor views financial adviser as a sounding board

Dennis Lam, 30



Story continues below advertisement

The portfolio

Includes shares in McDonald's Corp., Wal-Mart Stores Inc., TD Bank, BCE Inc., Paladin Energy Ltd., Potash Corp. of Saskatchewan Inc., Apple Inc., ARM Holdings PLC (ADR), Broadcom Corp., and preferred shares such as Fairfax Financial Holdings Ltd. Series K

The investor

Dennis Lam jumped into mutual funds right after the dot-com crash. He now invests in stocks directly and has teamed up with a financial adviser – his second after the first proved unsuitable.

He owns his house outright and has taken out a variable-rate mortgage (currently at 2.25 per cent) to invest in stocks. They pay income (dividends) and are kept in a separate account to generate a paper trail. This allows him to claim a tax deduction on the interest payments.

How he invests

"I concentrate on solid, dividend-paying blue chip companies in Canada and the U.S., and typically hold for them for the long term," Mr. Lam says. "McDonald's and Wal-Mart are prime examples. I particularly like them because they are almost as recession-proof as you can get but also thrive during bull runs. Also, they have a good history of increasing dividends."

Story continues below advertisement

In addition, there is a "good-sized weighting" in the Canadian energy and materials sectors. This is to gain exposure to the "upcoming recovery" in world economies.

Growth stocks have a place, as well. Of note are companies in the smartphone industry, especially Apple. To hedge against its torrid growth coming back down to earth, Mr. Lam also has positions in Broadcom and ARM Holdings, companies that sell to multiple smartphone manufacturers.

The financial crisis of 2008 and 2009 tempered his appetite for risk and he now "understands the value of fixed income" for a small part of his portfolio. "For my fixed income I have preferred shares only. I like the fact that they pay a dividend that is taxed more favourably than interest from a bond."

Best move

"Selling half of my U.S. holdings in March, 2008."

Worst move

Story continues below advertisement

"I had a plan to sell half my Canadian holdings in 2008 once the TSX was consistently in the 15,000s. Unfortunately, the TSX just barely made it to this level before it dropped like a rock."


"Find a good financial or investment adviser that not only understands you but also supports your objectives – someone that is a bit like-minded but also there to protect you from doing something stupid or emotional."

Special to The Globe and Mail Want to share your strategies?


Report an error
Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.