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.
The case for just owning a tight portfolio of big blue-chip dividend stocks
Investing theory holds that exposure to the full extent of the stock market beats a focus on big companies alone over the long term, Rob Carrick writes. I don’t get it. In periodically comparing total stock market exchanged-traded funds with competitors focusing on a tighter portfolio of big blue chips, I have yet to see the total market approach pull away.
The stock market volatility of 2020 seems an interesting time to road test total market ETFs again. We saw a variety of market conditions during this period – a sudden crash, and a fast rebound most of the way back. Did the total market approach shine at any juncture? Not so much, if you use a pair of Vanguard ETFs as a gauge.
Gordon Pape: Three overlooked income stocks weathering the COVID-19 storm
Income-oriented investors should have a roster of key holdings, especially during these difficult times, Gordon Pape writes. Those may include big, steady performers such as BCE, Fortis, Emera and TC Energy. But there are many smaller companies that may have been overlooked by investors, even though they are performing well in the COVID-19 era. Three of them are B&G Foods (higher risk), Richards Packaging (medium risk), and Granite REIT (moderate risk). Here he explains why.
More from Gordon Pape: The latest barrage of bad news may point to the next big market pullback
What BlackRock’s chief strategist for Canada is predicting for the second half of 2020 - and how investors should prepare for it
A quick summary of some dominant investing trends of the past decade: Low inflation, strong bond returns and the dominance of U.S. stocks, Rob Carrick writes. The 2020 midyear outlook from the global investment firm BlackRock suggests the coronavirus will drive changes in each of these areas and more in the months and years ahead. To find out more about how investors should adjust their portfolios, I spoke this week with Kurt Reiman, BlackRock’s chief investment strategist for Canada.
Asked how serious is the risk of a second market plunge in the latter part of the year, he responded: “Recoveries never go in a straight line.” You can read the rest of the interview here.
Can I claim a loss when I gift shares to my adult kids?
A reader asks John Heinzl if the stocks he gifted to three of his children at below cost could be used to offset his capital gains. His accountant said no, but his broker said yes. “Who’s right?”
He responds: Your broker is correct. When you transfer securities to an adult child, in the eyes of the Canada Revenue Agency you are considered to have disposed of the shares. For tax purposes, it’s the same as if you had sold the shares at their market value at the time of the transfer. It seems your accountant may have been confusing the gifting of stocks to your adult children with a “superficial loss.” He explains more here and answers other readers’ questions.
More from John Heinzl: Yield Hog model dividend growth portfolio as of June 30, 2020
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High debt holds back dividend payers amid rebound
Hockey isn’t the only national pastime being undermined by the pandemic, Tim Shufelt writes. Dividend stocks – the great obsession of legions of Canadian investors – have been rendered anemic by the disruptive power of the coronavirus.
As a whole, dividend-yielding stocks in Canada offered no protection through the market crash in the winter, nor did they keep pace with the rally that elevated global indexes in the spring. Why is the market suddenly allergic to dividends? The answer may lie in the high levels of debt that dividend payers tend to carry. He takes a closer look here.
What investors need to know for the week ahead
In the week ahead, Canada’s employment numbers for June will be released on Friday. Other economic data on tap include: Bank of Canada Business Outlook Survey and Survey of Consumer Expectations (Monday); Canada’s economic and fiscal update, plus Canadian housing starts for June and U.S. consumer credit for May (Wednesday); U.S. wholesale trade for May (Thursday); U.S. producer price index for June (Friday).
Companies releasing their latest results include Aritzia, Delta Air Lines, Shaw Communications and MTY Food Group.
Looking for more investing ideas and opinions?
- A rising dividend stock displaying a bullish ‘golden cross’
- Stocks are expensive on every measure ... except the only one that matters
- Think twice before adopting the Munger method of picking select stocks
- The highest yielding stocks on the TSX, plus risk data
- The week’s most oversold and overbought stocks on the TSX
- Top U.S. stock picks from BofA and Wells Fargo
- Biotech blind spot: How Canada’s big investors missed the boom happening right now