The volume of demeaning personal finance advice that sounds like “Stop buying that latte or you’ll soon be sleeping on a subway grate!” has annoyed U.S. market blogger Nick Maggiulli.
In “Psychological Tricks for Worry-Free Spending”, the author pushes back on guilt-based advice that feeds on anxieties prevalent for investors of all stripes, even the most financially comfortable. Mr. Maggiulli cites a study showing that 20 per cent of Americans with net worth between US$5.0 and $25-million worry they won’t have enough for a comfortable retirement.
The most practical tip provided is the ‘2x rule’. This strategy stipulates that for every splurge, an equal amount of money must be invested in the market. Having to commit twice as much savings to the process helps ensure that the consumer purchase is truly valuable to the buyer, and increases the size of a portfolio to increase future financial health.
Psychological research on what makes people happy implies that consumers can also boost their sense of well-being by using the 2x rule, except donating an equal amount to charity instead of retirement accounts.
The book “Happy Money: The Science of Happier Spending” found that experiences-focused consumption, treating yourself on occasion, paying for things upfront and giving to others were all ways money can be used to increase our standards of living.
The author’s primary focus with the piece is dead-on in my opinion, “The hard part, therefore, isn’t spending your money, but figuring out what you truly want out of life.”
-- Scott Barlow, Globe and Mail market strategist
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Stocks to ponder
B2Gold Corp. The company has a number of catalysts in the months ahead that could give the share price a lift. In addition, should global economic growth concerns and trade tensions between the U.S. and China intensify, the price of gold could trend higher. The stock has 14 buy recommendations and a 27-per-cent expected one-year return. Last month, the company reported solid financial results and management announced an inaugural dividend. Jennifer Dowty provides this profile of the stock.
Waste Connections Inc. This stock has been turning trash into gold for the past several years, but the recent rally in the share price has left valuations looking awfully stretched amid a backdrop of slow profit growth. David Berman takes a closer look.
Laurentian Bank of Canada This is a cheap stock. And it will likely stay that way. David Berman gives us his take.
The Rundown
Lessons from your fellow Canadians on how to be successful with TFSAs
The Canada Revenue Agency’s 2017 TFSA numbers, the most recent available, are full of useful insights on achieving success with TFSAs. Rob Carrick looks at a few of them.
Please, for the sake of your kids, choose the boring RESP investment
Resisting the temptation of high-risk, high-return investments is a constant challenge for investors. Rob Carrick was reminded of this in reading a recent query from a dad who is taking charge of his children’s registered education savings plans. He’s looking at using exchange-traded funds, which makes good sense because they’re excellent building blocks for RESPs and pretty much every other investing purpose. There are hundreds of ETFs listed on the Toronto Stock Exchange, but this reader has whittled his choice down to two. Rob Carrick makes a recommendation on which is the better of the two.
Call me a perma bear if you like, but this is what my bullish calls would have made you in 2019
David Rosenberg had an overall bearish call on the stock market heading into 2019. But he points out, it wasn’t all gloom and doom. If you had evenly split asset allocations into four segments of the various markets he was recommending, the total 12-month return is just under 20 per cent – with a low “beta” to the S&P 500 and in a diversified format. He provides this defence of being known as a parma bear.
‘Will there be room for my teenage son to have a career in finance, or will robo-advisers take over?’
Investor Economics, a unit of ISS Market Intelligence, reports that robo-advisers had $5.9-billion in assets as of mid-year, which is substantial but not market-changing. And yet, a reader thought enough of robo-advice to ask this question recently: “My son, who is 14, is starting early in investing and watches the market. He wants to pursue a career in finance. While difficult to predict the future, do you think in ten years time investing will all be done by robo-advisors?” Rob Carrick provides his answer.
The best-performing investing style of the past decade is also the most reviled
According to Standard & Poor’s Dow Jones Indices, the S&P 500 Buyback Index topped all its major index competitors over the past 10 years. This index, which tracks large U.S. companies that are buying back their own shares at an unusually fast clip, produced a 15.7-per-cent annualized return since 2009, well above the 13.4-per-cent return of the plain vanilla S&P 500. What makes this trend rather surprising, Ian McGugan explains, is the political backdrop.
I put dividend investing under the microscope - and there’s some good and bad news
Norman Rothery puts Canadian dividend stocks under the microscope to see how they measured up in past bullish and bearish periods.
Q&A: Three top stock picks for 2020 from an award-winning analyst at National Bank Financial
The S&P/TSX Composite Index has been grinding out gains, closing at a record high last week. Industrial stocks have been the third-best performing sector year-to-date. Given the stock market’s run and global economic uncertainty, which industrial stocks can provide investors with some degree of downside protection if the positive market momentum reverses course? To answer this question, we turned to Maxim Sytchev, a top-ranked analyst at National Bank Financial. Last month, he was named the Brendan Wood TopGun industrial products analyst for the fourth consecutive year. He gives his top stock recommendations for 2020.
Dennis Gartman calls it quits as era ends where humans dominated investing advice
Dennis Gartman’s decision to end his daily investing newsletter says a lot about the transformation the investing world has undergone over the past generation. Ian McGugan explains.
Others (for subscribers)
The week’s most oversold and overbought stocks on the TSX
Thursday’s analyst upgrades and downgrades
Friday’s analyst upgrades and downgrades
Tuesday’s Insider Report: Director tops up his investment in this stock that’s rallied 42% in 2019
Wednesday’s Insider Report: Former Dragons’ Den star is buying this stock
Thursday’s Insider Report: Three high-flying stocks that are being sold
Friday’s Insider Report: CEO invests almost US$250,000 in this Canadian dividend stock
This Canadian dividend stock is one of Citi’s global top 10 picks
Number Cruncher: Stock strategy builds on three ways to enhance shareholder value
Number Cruncher: Six momentum stocks in the red-hot semi-conductor sector
How this U.S. mutual fund became the top performer of the decade
Ask Globe Investor
Question: Do you expect that any of the banks will raise their dividends this quarter? If so, which ones?
Answer: Bank of Nova Scotia (BNS) reported fourth-quarter earnings on Nov. 26 and didn’t raise its dividend. Bank of Montreal (BMO) is up next on Dec. 3, and will likely raise its dividend by about 3 per cent, in keeping with its pattern of semi-annual increases, Canaccord Genuity analyst Scott Chan said in a note. Mr. Chan also sees National Bank of Canada (NA) and Laurentian Bank of Canada (LB), both of which report Dec. 4, raising their dividends by 4 per cent and 1 per cent, respectively. Royal Bank of Canada (RY), which also reports Dec. 4, and the remaining banks – Toronto-Dominion Bank (TD), Canadian Imperial Bank of Commerce (CM) and Canadian Western Bank (CWB), all of which report Dec. 5 – will likely hold their dividends steady, he said.
--John Heinzl
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What’s up in the days ahead
Rob Carrick takes a close look at how women get doubly disadvantaged with annuities - they get less than men in monthly payments, and they pay more in tax on those payments.
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Compiled by Globe Investor Staff