Includes shares in Hydro One Ltd., Knight Therapeutics Inc., TransCanada Corp., Great-West Lifeco Inc. and Toronto-Dominion Bank; also exchange-traded funds (ETFs) such as the iShares Japan Fundamental Index and First Asset Hamilton Capital European Bank ETF.
Lukas Vitalijus bought his first investment – an index mutual fund – through a bank about eight years ago (the fund has since been sold). Mr. Vitalijus now manages his own portfolio, and is head of a Canadian MoneySaver ShareClub (investment club) in Okanagan, B.C.
How he invests
He has divided his portfolio into "two separate buckets." The first contains long-term holdings that include TD, TransCanada and others on the list above. The second is for speculative trades, made with "money he can afford to lose."
In the first bucket, he prefers – like billionaire investor Warren Buffett – long-term positions in "industry leaders." If they have "a solid history of paying dividends," that's even better. Managers can do "a lot of things with their financials, but they cannot fake the dividends," Mr. Vitalijus says.
One long-term holding is Hydro One Ltd., which has a monopoly in electricity transmission in Ontario. He likes "the fact that the company is able to set prices adjusted for inflation, and is not a price-taker like, say, commodity producers."
Another long-term bet is Great-West Lifeco Inc., one of "the largest financial-services companies in Canada," with subsidiaries in Ireland and Britain.
In the portfolio's second bucket, Mr. Vitalijus finds that speculation can be "profitable, provided it is based on a combination of preparation, intuition and ability to take risk." Years of trading have left him with several rules of thumb that are similar, in some respects, to those of Jesse Livermore, the legendary trader profiled in Edwin Lefèvre's book, Reminiscences of a Stock Operator.
For example, Mr. Vitalijus believes in selling a stock if it trends downward by a certain amount, basically cutting your losses. Also, he sells if the stock doesn't move up on catalysts he thought would spark a jump in price.
It was Lucara Diamond Corp., bought at a price around 65 cents and sold after a 75-per-cent gain.
"Buying a 'hot' mutual fund [Redwood Equity Growth Class – since sold] at its peak," he says.
Avoid a company that doesn't make money and has more debt than equity, "even if the 'story' is unbelievably good," he advises.