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.
Five defensive financial moves to make as we head into a pandemic autumn
We’ve had an accumulation of days lately where major stock indexes fall by hefty amounts, Rob Carrick writes. We haven’t strung enough of them together yet to suggest stocks are set to fall in a sustained way, but this possibility can’t be dismissed with so much uncertainty ahead for the economy.
A simple rebalancing may be all you need. Sell enough of your stocks or equity funds to get back to your target asset mix and put the money in bonds or guaranteed investment certificates, or cash if you prefer. If you’re a senior who plans to make your annual mandatory withdrawal from a registered retirement income fund, make sure you have the cash on hand to do so now. Don’t risk having to sell falling stocks or equity funds to raise cash. Read the other four moves here.
Three REITs that are built to ride out a second wave
A reader asks John Heinzl whether there are any real estate investment trusts he considers safe even in a second wave of the COVID-19 pandemic. He responds: Given the highly uncertain economic outlook, I wouldn’t label any investment – REIT or otherwise – as totally “safe.” That said, based on what happened during the first wave of the coronavirus, I believe some REITs are better positioned than others to ride out another spike in infections.
All three of these REITs (which I own personally) have solid balance sheets, distributions that analysts consider sustainable and long-term growth potential from development projects. Don’t buy these REITs if you’re hoping for a quick capital gain, but if you’re seeking stable cash flow during these uncertain times, they are worth considering. Read more here.
More from John Heinzl: Nike, Aurora Cannabis and other investing stars and dogs for the week
These overlooked value stocks could pop if an effective vaccine emerges
If you want to bet on the arrival of a safe and effective vaccine, look at food and beverage stocks, or even tobacco, David Berman writes. This industry group, consisting of U.S. companies such as Boston Beer, Simply Good Foods and Philip Morris, might not look like the most exciting bet on the end of the pandemic when life returns to normal. But the stocks have shown a particularly strong positive correlation with rising vaccine probabilities, according to Goldman Sachs.
They stand out with other so-called value stocks that are relatively cheap and unpopular today. Some of the other potential outperformers include insurance, health care equipment, energy, banks, utilities and telecom – where it is easy to find cheap Canadian equivalents with big dividends. Read more here.
More from David Berman: Four reasons to bet on renewable energy
A three-point plan for coping with a potential second wave stock market plunge
One of the big morale boosters coming out of the worst days of the pandemic was the stock market surge, Rob Carrick writes. Now that COVID-19 cases are again rising sharply around the world, it’s worth looking at the potential for another decline and then considering what you’ll do about it. A three-point plan: Take any money you can’t afford to lose and get it out of the stock market now; avoid panic-selling if there is a decline; and be ready to start shovelling some of the money you’ve been saving into the market. Read more here.
Making the case for the sleepy approach to dividend investing
Ask seasoned investors about their best purchases and they’ll often point to big gains from stocks they held for decades rather than from those they held for months or years, Norman Rothery writes. Such a sleepy approach works well when it comes to Canadian dividend stocks.
Investors can get exposure to the S&P/TSX 60 with an exchange-traded fund. But dividend investors with moderately sized portfolios can cut out the annual fee and better customize their holdings by buying stocks directly. They might start with 20 dividend-paying stocks that offer generous yields and then add more as the dividends roll in, or their savings grow, over the years. Read more and get a full list of the sleepy dividend portfolio here.
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What investors need to know for the week ahead
In the week ahead, nervous markets will be watching the first U.S. presidential debate between Donald Trump and Joe Biden on Tuesday. Economic data on tap include: Canada’s industrial product and raw materials price indexes plus U.S. wholesale and retail inventories report for August (Tuesday); Canada’s real GDP for July and U.S. real GDP for the second quarter (Wednesday); Canadian building permits as well as U.S. personal spending and income for August, plus Canadian and U.S. auto sales for September (Thursday); U.S. employment for September and factory orders for August (Friday). Companies releasing their latest earnings include Constellation Brands and PepsiCo.
Looking for more money ideas and opinions?
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- Good news, mortgage shoppers: Rates are plumbing new lows. But will they stay there?
- One of Wall Street’s most bullish pundits has changed his view of the markets
- A little-known, undervalued growth stock that’s soaring to record highs
- BMO’s favourite sector for dividend investors
- Billionaire businessman invests a further $1-million in this stock that’s up 84%
- Why Canadian stocks are performing better than you think
- Gold’s fall likely to renew doubts about haven status