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.
Don’t count out value stocks just yet. Here are 6 that would score highly with the investing greats
It's not surprising that everyone thinks the value investing model is broken.
So-called value stocks, selected because they have cheap book values relative to others, have badly underperformed the broader market during this decade-long bull run. Instead, growth-oriented and large cap technology stocks have grabbed all the headlines. It’s enough to forget that over the much longer-term, value stocks have beaten other investing styles and the market as a whole. But there is a belief in the markets these days that the value model is broken.
The long-term evidence in the stock market supports having an allocation to value stocks. What the data also shows is that cheap stocks go through periods when they underperform. When the reversion takes hold and investors believe in the value in value, John Reese believes we should expect to see some healthier returns than what we’ve seen in the past 10 years.
Here are six stocks (three U.S. and three Canada) that score highly using a value composite model.
Five tax strategies to improve investors’ financial well-being
Tax planning is an important component of financial advice for both financial advisors and investors, but that focus tends to sharpen when there are signs of slower economic growth that could lead to lower or even negative investment returns.
“In a low-return environment … there is often a greater emphasis on taxes,” says John Natale, assistant vice president, tax, retirement and estate planning services, at Manulife Investment Management in Toronto. “If you can squeeze out a bit more on a return on an after-tax basis, it can make a big difference – especially over the long term.”
But it’s not just saving taxes that advisors and investors should focus on. Tax deferral is also important, Mr. Natale says. “By paying less in taxes now, you have that money working for you – and hopefully growing and compounding over time.”
The Globe’s guide for matching your ETFs to the right type of account to save on tax
The cost of owning exchange-traded funds is low, but maybe not as low as you think. Racking up a lot of brokerage commissions to buy and sell ETFs is one way to drive up your costs beyond the fees shown in the management expense ratio. Another is putting your ETF in a non-optimum type of account and paying too much tax.
The Globe and Mail ETF Tax Primer is designed to help you find the best possible home for your ETF. Designed to be used with The Globe’s ETF Buyer’s Guide, it outlines the tax implications of investing in bond funds and Canadian, U.S. and international equity funds in a TFSA, a registered retirement savings plan or registered retirement income fund, or a taxable account.
If the return on your mutual funds is satisfactory, why care about the fees you pay?
A reader posed this question recently in an e-mail in which he explained that he generally lives by the premise that you get what you pay for.
Good service and competitive returns do not mean you give a fund a free pass on fees, Rob Carrick writes. In investing, fees are one of the few things in your control when considering future returns. Smart managers can stumble or leave your fund company. Even the best have periods of underperformance. Lower fees help support satisfactory returns, come what may. A strong performing fund with a high MER is a disappointment waiting to happen.
Read more from Rob Carrick: Three hours spent with a financial planner at her bank and she’s still feeling lost
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How this $5-billion fund manager has trounced the S&P 500 over the past two decades
It’s very rare for a money manager to beat the index by a wide margin over two decades. But Noah Blackstein, who oversees more than $5 billion in U.S. and global portfolios for Scotiabank’s Dynamic Funds, has done it with his flagship Dynamic Power American Growth Fund (Series A). We asked the 49-year-old growth manager how he navigates through U.S. President Donald Trump’s tweets and why he finds yoga-inspired apparel retailer Lululemon Athletica a compelling investment.
What investors need to know for the week ahead
In the week ahead China’s markets will be closed from Tuesday through the following Monday, Germany’s markets are closed Thursday, Canadian real GDP for July and U.S. and Canadian auto sales for September will be released Tuesday and U.S. Fed chair Jerome Powell will speak in Washington on Friday.
Companies releasing their latest earnings in the week ahead include NovaGold Resources (Tuesday), Heritage Cannabis Holdings (Wednesday) and Constellation Brands (Thursday).