Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
• What BlackRock’s chief investment strategist for Canada is predicting now for markets, the economy and the loonie
After A&W suspends payout, a look at how safe dividends are in John Heinzl’s Yield Hog portfolio
With the coronavirus pandemic sending shock waves through the economy, readers have asked John Heinzl: How sustainable are the dividends in your model Yield Hog dividend growth portfolio?
Let’s get the bad news out of the way first, he writes. One of the model portfolio stocks, A&W Revenue Royalties Income Fund, temporarily suspended its monthly distribution this past week. The move wasn’t surprising given how the pandemic is hammering the restaurant industry.
No other stocks in the portfolio have cut their dividends yet and, while nothing is guaranteed, he is hopeful that most of the payouts will be maintained. For his analysis here, he is relying on an RBC Dominion Securities report titled Dividend Sustainability in Canada.
Related: A&W, Cenovus and more stars and dogs of investing for the week
More from John Heinzl: Yield Hog model dividend growth portfolio as of March 31, 2020
Rob Carrick’s 2020 ETF Buyer’s Guide: Balanced funds (and how to calm down about our portfolios)
Welcome to hellish markets, balanced ETFs, Rob Carrick writes. Born in better days for stocks, exchange-traded funds offering a fully diversified portfolio in a single package are undergoing their first bear market. The sixth and final installment of The Globe and Mail ETF Buyer’s Guide shows you how they have held up so far.
The news here is good. In fact, balanced ETFs have a lesson to teach us all. If you own any type of diversified portfolio that mixes stocks and bonds, your losses this year may not be as damaging as you think. Diversification works, people. Bonds were a bit wonky in the market plunge of early 2020, but they still saved portfolios from falling as much as the stock markets.
More from Rob Carrick: Six personal-finance ideas that have been blown to pieces by the pandemic
Gordon Pape: It’s time to sell this popular high-yield bond fund
There’s one area of the bond market that’s suffering badly: High-yield bonds. That sector is down 9.43 per cent for the year, and there may be more losses to come, Gordon Pape writes. High-yield is really just a polite term for junk bonds. They’re issued by companies with weak credit ratings, which means they are below investment-grade. The attraction is a high interest rate.
The popular Phillips Hager & North High Yield Bond Fund has always been dependable, and the management team is first-rate. But it is not the right fund for these rapidly changing times. I have reluctantly advised my readers to sell. I also suggest that you review your portfolio and sell any other high-yield bond funds you may be holding. Their time will come again, but it could be a long wait.
What BlackRock’s chief investment strategist for Canada is predicting now for markets, the economy and the loonie
The rapid spread of the novel coronavirus has changed people’s lives worldwide, Jennifer Dowty writes. Cases and deaths are rising, the unemployment rate is surging, equity investors have rapidly seen the value of their portfolios collapse. During this time of uncertainty, strategists attempt to provide sound guidance on the potential impacts from this pandemic.
We recently spoke with Kurt Reiman, BlackRock Inc.’s chief investment strategist for Canada, to gain his insights. Here he discusses where he thinks stock markets are headed, what actions investors should be taking and where he sees opportunity.
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Three paths for investors nearing retirement to consider as stocks enter a bear market
The precipitous fall in the stock markets in recent weeks has dealt a body blow to investors, especially those who were thinking of retiring soon or who have already retired, Frederick Vettese writes. What should an investor do then, especially one who is closing in on retirement? One path is to stay fully invested and reduce expenditures where you can in the interim. This approach has stood the test of time, at least for the past three-quarters of a century. Here he looks at that strategy and the other two: reducing equity holdings if and when the opportunity arises, and selling them altogether.
What investors need to know for the week ahead
Canadians will get a read in the week ahead of the scope of the coronavirus outbreak’s effect on jobs when Statistics Canada releases unemployment numbers for March on Thursday. A decline of 3.1 per cent or 600,000 jobs from February is expected, with the unemployment rate rising to 8.5 per cent from 5.6 per cent.
Other economic data on tap include: U.S. consumer credit for February (Tuesday); Canadian housing starts for March and building permits for February (Wednesday); U.S. producer price index for March and wholesale trade for February (Thursday); U.S. inflation figures for March (Friday).
Companies releasing their latest financial results include Cogeco, EXFO, MTY Food Group and Shaw Communications.
A reminder to investors: Stock and bond markets in Canada and the United States will be closed on Friday.
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