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.
Gordon Pape: My growth portfolio is high risk, but it’s generating incredible returns
Tech stocks have been on fire in recent months, and they have carried my Growth Portfolio to a record return as a result, Gordon Pape writes. The net result is this portfolio gained 55 per cent in a little less than five months since the previous update. The total portfolio value in April was $47,575.64, including retained dividends. It is now $73,758.87.
In addition to the tech stocks, that performance is also due to the timing – the previous update was just after the March selloff and share prices were still depressed. Keep in mind this is a high-risk portfolio, 100 per cent exposed to the stock market with a focus on momentum plays. So it should only be used by readers with higher risk tolerance. You can find the full list of stocks, updates on their performance, which position was trimmed and a new portfolio addition here.
Durable dividends: Canada’s top companies kept payouts flowing in second quarter
In a quarter of enormous pressure on dividend payers everywhere, Canadian blue-chips proved to be among the most resilient in the world, Tim Shufelt writes. Not only did big Canadian corporations resist the global wave of dividend cuts in the second quarter, they increased their collective payout by 4.1 per cent, according to a report by British-based asset management firm Janus Henderson Investors. The only other country that posted a year-over-year dividend increase was China.
You wouldn’t know that by looking at the stock market, however. Many of Canada’s dividend champions have suffered from a worldwide aversion to value stocks, despite managing to maintain or even hike dividends amid a deep economic contraction. Read more here.
CIBC’s biggest challenge: closing the valuation gap
Canadian Imperial Bank of Commerce has been saddled with a curiously low stock valuation for years, frustrating investors who feel the bank should trade in line with its Big Six peers, David Berman writes. Good news: CIBC’s strong performance during the coronavirus pandemic may at last rescue the stock from the bargain bin.
On average, the Big Six trade at 11.5 times reported profits, according to Bloomberg. But CIBC trades at just 10.9 times its reported profits. And what’s key here is that the bank’s valuation has been lagging its rivals for well over a decade. The reason: CIBC has a history of making costly mistakes that have eroded confidence in the bank’s performance. Read more about reasons for optimism as well as potential obstacles here.
John Heinzl: My Yield Hog dividend portfolio is bruised - not broken
Following last week’s column on the performance on his model Yield Hog Dividend Growth Portfolio, John Heinzl answered readers’ questions, including: Why don’t you have any tech stocks in your model portfolio?
His response: The portfolio does have a small amount of technology exposure through the iShares Core Dividend Growth ETF, whose top two holdings are Apple and Microsoft. But because the model portfolio’s mandate is to invest exclusively in dividend growth companies, high-flying tech stocks that don’t pay dividends, such as Shopify, Amazon and Netflix are not included. Read more plus answers to other reader questions here.
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The busy investor’s guide to navigating fees
The level of fee awareness among Canadian investors improved modestly in the past few years – from very bad to just plain bad, Rob Carrick writes. So he has dedicated his Portfolio Strategy column this week to explaining the fees paid by both advised and do-it-yourself investors, and providing rough guidelines on reasonable fee levels. For example, on advice and planning fees:
- Advised investors Three ways investors pay for investment advice and financial planning: trailing commissions; fee-based arrangements; and fee-for-service.
- DIY investors You may be paying trailing commissions if you hold mutual funds – look for a Series D fund. And don’t overlook the benefits of fee-for-service financial planning.
What investors need to know for the week ahead
North American markets will be closed Monday in the week ahead for Labour Day. The Bank of Canada is set to make its latest rate policy announcement Wednesday.
Economic data on tap include: U.S. consumer credit for July (Tuesday); Canadian housing starts for August (Wednesday); U.S. wholesale inventories for July (Thursday); and U.S. inflation figures for August (Friday).
Companies reporting their latest earnings include Lululemon Athletica, Aurora Cannabis, Roots, Transcontinental, Empire Co., Peloton Interactive and Transat AT.
Looking for more money ideas and opinions?
- Scotia calls this Canadian financial stock ‘too cheap to ignore’
- With few alternatives for investors, market selloff likely to be contained
- How will the end of COVID-19 relief affect Canada’s housing market? Here are the most likely scenarios
- Insider Report: Board chair invests over $3.8-million in this REIT yielding 9%
- Three Canadian companies are among Citi’s top global stock picks
- Investment industry calls for changes, greater clarity to proposed title rules
- Why bank and utilities stocks are more important than ever
- The highest yielding stocks on the TSX, plus risk data
- It’s tempting to lock in a fixed-rate mortgage right now, but make sure you know the trade-offs