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.
These two stocks are among the favourites right now of Canadian value investor Francis Chou
Francis Chou is a well-known value investor to Canadians for his mutual funds. He described elements of his investment philosophy to Norman Rothery: He was particularly keen on buying quality stocks trading at reasonable prices of the sort a younger Warren Buffett would have favoured.
In a recent conversation, he extolled the value offered by communications company Lumen Technologies Inc., formerly CenturyLink Inc. (legal name change is pending), which carries a hefty dividend of 8 per cent. He also likes Assured Guaranty Corp., a Bermuda-based insurer that has been buying back stock with vigour. Read more here.
Rob Carrick’s 2021 ETF Buyer’s Guide: Best Canadian equity funds
A few lessons stand out in the data that you’ll find in the first instalment of the 2021 Globe and Mail ETF Buyer’s Guide, Rob Carrick writes. One thing is that funds tracking broad Canadian stock indexes validated themselves as buy-and-hold investments: Index-trackers were front and centre for the peak-to-valley decline of 37 per cent in the S&P/TSX Composite Index from mid-February through late March, but they also delivered the subsequent upside and produced reasonable overall 12-month returns.
The ETF Buyer’s Guide is designed to help long-term investors find core investments for their portfolios. The guide offers 11 different candidates you can research on Globeinvestor.com to see whether they meet your needs.
More from Rob Carrick: This is the worst way to park cash in your investment account
Crash or no crash, stock markets are too exuberant for comfort
Depending on which sectors you examine and which gauges you choose to use, share prices register as mildly frothy to outright giddy by historical standards, Ian McGugan writes. Consider Warren Buffett’s favourite way of measuring the market’s animal spirits. His method compares the total market value of all the stocks on a country’s exchanges to the size of the underlying national economy, as measured by its gross domestic product. This comparison shows both U.S. stocks and global stocks have now surged to unprecedented levels of exuberance.
There is no obvious place for nervous investors to run to for shelter. With fixed-income yields still so low, bonds are about as attractive as that month-old chili you just found at the back of your fridge. So what should a saver do? One good place to start is by assessing your own tolerance for risk. If the thought of a 25-per-cent plunge in the market terrifies you, it is time to ease back on your portfolio’s stock exposure. Read more here.
the buffett indicator
Ratio of the total value of U.S. stocks to GDP
200%
180
160
140
120
100
80
60
40
20
0
1950
1960
1970
1980
1990
2000
2010
2020
JOHN SOPINSKI/THE GLOBE AND MAIL
SOURCE: advisor perspectives
the buffett indicator
Ratio of the total value of U.S. stocks to GDP
200%
180
160
140
120
100
80
60
40
20
0
1950
1960
1970
1980
1990
2000
2010
2020
JOHN SOPINSKI/THE GLOBE AND MAIL
SOURCE: advisor perspectives
the buffett indicator
Ratio of the total value of U.S. stocks to GDP
200%
180
160
140
120
100
80
60
40
20
0
1950
1960
1970
1980
1990
2000
2010
2020
JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: advisor perspectives
More from Ian McGugan: Double bubble: Tesla buying bitcoin is markets’ latest sign of froth
Forest-products stocks on a roll as lumber prices soar. Here’s why the rally may continue
Lumber prices are soaring, driving big gains in the share prices of Canadian lumber producers so far this year, David Berman writes. The best reason to stick with the rally rather than trying to time the top of the cycle: Stock prices aren’t reflecting all of the underlying good news yet.
While major benchmarks have been notching fresh record highs this year, lumber producers have been handily outperforming. Consider that West Fraser Timber has risen about 10 per cent in 2021, which is well ahead of the 4-per-cent gain in the S&P 500. Interfor Corp. is up nearly 16 per cent over the same period. Read more here.
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Gordon Pape: How to build a successful RRSP
Registered retirement savings plans are potentially huge money-making machines, but only if set up properly and managed effectively, Gordon Pape writes. You have to do some research and develop a suitable investing strategy. Here are some suggestions for setting up a successful plan. They include:
- Choose the right plan: Opt for maximum flexibility. Find out exactly what securities the plan is allowed to hold, and what is excluded.
- Set up an automatic contribution plan: Ask your employer or your bank to direct a specified amount to your plan every month. That way, you won’t be scrambling when the next RRSP season comes around.
What investors need to know for the week ahead
In the week ahead, Canadian and U.S. markets will be closed Monday for public holidays. Companies releasing their latest financial results include Walmart, Shopify, takeover target Inter Pipeline, Magna International, Barrick Gold, TC Energy, Canadian Tire, Dream Office REIT, Fairfax Holdings, Emera, MTY Food Group and Enerplus.
Economic data to come this week include: Canada’s existing home sales and average prices plus the MLS Home Price Index for January (Tuesday); Canada’s inflation figures for January and U.S. retail sales for December (Wednesday); Canada’s new housing price index as well as U.S. housing starts and building permits for January (Thursday); Canada’s retail sales for December plus wholesale trade and U.S. existing home sales for January (Friday).
Read more: Here comes the bull: World market themes for the week ahead
Looking for more money ideas and opinions?
- Opinion: The Canadian financial advice industry is a mess. That’s why young investors are turning to Reddit
- Short sales on the TSX: What bearish investors are betting against
- Another fantastic February for investors? Ten reasons why the bull run may continue
- Use an RRSP to reduce tax on government benefits
- Opinion: A hot housing market offers a golden ticket to downsizing boomers
- Canadian stocks among Bank of America’s ‘global boosters’ list of top picks
- Analysis: The cannabis comeback: Why Aphria’s shares tripled in one month - and the whole sector is booming. Again.
- Elon Musk loves it. So what’s all the buzz about bitcoin?