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.
John Heinzl: Why I’m buying more shares of these three dividend dynamos
As unpleasant as the recent market downturn has been, dividend investors with money to spend should be cheering: Because stock prices have dropped and yields have risen, every dollar invested will generate more income, John Heinzl writes. For the past few months, I’ve been building up the cash reserves in my model Yield Hog Dividend Growth Portfolio. Now, it’s time to go shopping. I’ve got three separate transactions: TransCanada, Brookfield Infrastructure Partners and BCE. Here’s why.
Something about bear markets seems to bring out the best in the Two-Minute Portfolio
A thought for investors who are unnerved by the Canadian stock market’s terrible 2018: Play strong defence in your portfolio and let the offence take care of itself, Rob Carrick writes. This strategy is brought to you by the Two-Minute Portfolio, which once again outperformed the S&P/TSX Composite Index in a bad year for Canadian stocks. The index lost 8.9 per cent on a total return basis (dividends plus share-price changes), while the 2MP fell 1.7 per cent. The 2MP is a continuing experiment in bringing quick and simple portfolio-building with individual Canadian stocks as opposed to funds. Just buy the two largest dividend-paying stocks as measured by market capitalization (shares outstanding multiplied by share price) in each of the 11 subindexes of the Canadian market. Rebalance annually at the start of the year to discard any stocks that no longer qualify and add newcomers.
Read more Rob Carrick: These are the top things you should do in 2019 to reduce your stress about money
Expecting an economic slowdown to continue, Canaccord Genuity reveals its top Canadian stock picks for 2019
Believing the world economy is starting 2019 with “waning momentum,” equity analysts at Canaccord Genuity feel a slowdown in growth is likely to continue through the first half of the year, expecting to see leading economic indicators to remain “depressed,” David Leeder writes. The firm expects investors to continue to take a defensive equity posture through the first quarter and possibly into the second quarter as global growth deceleration hits the United States. Under that climate, they feel utilities, staples, energy and health care will outperform, while, at the same time, consumer discretionary and technology will struggle. Here is the full list of top Canadian equity picks for 2019, which includes 32 stocks spreading across 10 groups.
This year, these are the only two market forecasts Gordon Pape is willing to make
This is the time when I normally offer my predictions for the coming year, Gordon Pape writes. But here’s the problem. Forecasts are problematic at the best of times, but at least they have some basis in reality by analyzing trend lines and making reasonable assumptions about where they are heading. Unfortunately, right now the only predictable patterns are volatility and uncertainty. Recently, a reader chastised me for focusing too much on political developments and urged me to stick to the markets. I wish that were possible but the two are intricately intertwined. One man, U.S. President Donald Trump, can dramatically shift market direction with a single tweet. It’s impossible, and foolhardy, to ignore that reality. Given the uncertainty we face, I am going to confine myself to only two predictions for 2019.
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How a big deal in the ETF industry could mean better returns and lower fees for investors
Anything that puts more exchange-traded funds in the hands of investors instead of junk mutual funds and sketchy or poorly chosen stocks is a win, Rob Carrick writes. That’s what the partnership announced between ETF leader BlackRock and ETF laggard Royal Bank of Canada will do. RBC came late to ETFs and hasn’t made much of a dent. What it offers to the partnership is its vast operations as a big bank. RBC’s in-house family of index mutual funds will be cleared to hold BlackRock’s iShares ETFs instead of individual stocks, and RBC’s advisers, planners and brokers will be encouraged to employ ETFs where previously they used other things. ETFs would be an improvement for many investors. They’d pay less overall in fees and get better returns.
More from Rob Carrick: Stop fussing about mutual fund fees and get some facts to judge your returns
What investors need to know for the week ahead
Several U.S. banks are among the companies reporting their latest financial results in the coming week: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, US Bancorp, Shaw Communications, UnitedHealth Group, Alcoa, BlackRock Inc., CSX, Goldman Sachs, Kinder Morgan, Charles Schwab, American Express, Rio Tinto and Netflix. Economic data on tap include: Canadian new motor vehicle sales for November, Canada’s existing home sales and average sales prices plus the MLS Home Price Index for December (Tuesday); U.S. retail sales for December and business inventories for November (Wednesday); U.S. housing starts and building permits for December (Thursday); Canada’s inflation figures and U.S. industrial production for December (Friday). Note that the release of some U.S. statistics may be delayed by the partial government shutdown.