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Morgan Housel’s personal finance column The Psychology of Money is long, but so consistently full of investing wisdom I wished it was three times longer. The overarching theme is that investors’ main adversary is not the market, it’s themselves. I’ve collected a few excerpts below but couldn’t recommend reading the entire piece more strongly.

“A key point here is that few things in money are as valuable as options. The ability to do what you want, when you want, with who you want, and why you want, has infinite [return on investment].”

“The finance industry talks too much about what to do, and not enough about what happens in your head when you try to do it.”

“Like a car thief – though well-meaning and law-abiding – [investors] form tricks and strategies to get the return without paying the price [of uncertainty and volatility] . Trades. Rotations. Hedges. Arbitrages. Leverage. But the Money Gods do not look highly upon those who seek a reward without paying the price.”

“Your personal experiences make up maybe 0.00000001 per cent of what’s happened in the world but maybe 80 per cent of how you think the world works. If you were born in 1970 the stock market went up 10-fold adjusted for inflation in your teens and 20s … If you were born in 1950, the same market went exactly nowhere in your teens and 20s.”

“The mental trick we play on ourselves here is an over-admiration of people who have been there, done that, when it comes to money. Experiencing specific events does not necessarily qualify you to know what will happen next. In fact it rarely does, because experience leads to more overconfidence than prophetic ability.”

“Most attempts at contrarianism are just irrational cynicism in disguise – and cynicism can be popular and draw crowds. Real contrarianism is when your views are so uncomfortable and belittled that they cause you to second guess whether they’re right”

“When most people say they want to be a millionaire, what they really mean is “I want to spend a million dollars,” which is literally the opposite of being a millionaire.”

“‘Don’t do anything,’ are the most powerful words in finance. But they are both hard for individuals to accept and hard for professionals to charge a fee for. So, we fiddle. Far too much.”

“It helps, I’ve found, when making money decisions to constantly remind yourself that the purpose of investing is to maximize returns, not minimize boredom. Boring is perfectly fine. Boring is good.”

“The idea is that you have to take risk to get ahead, but no risk that could wipe you out is ever worth taking. The odds are in your favour when playing Russian Roulette. But the downside is never worth the potential upside.”

This list of quotes was difficult to make because there are many more worthy observations that could have been included. As for providing investors with useful, applicable wisdom, I have rarely if ever read a better column.

-- Scott Barlow, Globe and Mail market strategist

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Stocks to ponder

Enercare Inc. (ECI-T). This stock has a unanimous buy recommendation with the share price expected to rally 35 per cent over the next year. In addition, the stock offers investors an attractive 5.6-per-cent dividend yield. From a historical perspective, the stock is reasonably valued, currently trading at a multiple that is relatively in-line with its historical average. Jennifer Dowty reports. (for subscribers)

Hydro One Ltd. (H-T). Hydro One Ltd. shares have been walloped by rising interest rates and political uncertainty, but this double-whammy of bad news looks like a gift for investors buying the stock at today’s beaten-up price. Or at least that’s what David Berman keeps telling himself. He’s owned this stock for a couple of years, and has been adding to your holdings under the belief that electricity distribution is a solid business. But doubling down has only added to his pain as Hydro One’s share price has tumbled below $20 over the past month, from a high above $26 in 2016 – a 30-per-cent belly flop. Despite nursing losses, he remains convinced that the risks weighing on the stock will soon blow away. And the Ontario provincial election on Thursday should get the winds moving. (for subscribers)

HubSpot Inc. (HUBS-N). The Contra Guys recently listened to an audiobook by Dan Lyons that details his time at HubSpot. With the demise of his previous employment, another victim of “old media” shrinkage, Mr. Lyons was ready to tackle this new world. But he was not happy for much of his time at HubSpot; in fact, he pans the company and many of the people who worked there. It’s revenues have soared but so have its losses. And insiders are selling. It’s a stock that “does not suit us grizzled veterans,” they write. (for subscribers)

The Rundown

Are you a successful TFSA investor? Here’s how to benchmark your portfolio

TFSAs were launched in 2009, which means we’re well into our 10th year of having them available to build tax-free wealth. Care to benchmark your TFSA to see how you’ve done over the first decade for this popular investing and savings vehicle? Globe reader T.J. Machado of Mississauga recently asked for help on this. “For someone who has been maximizing TFSA contributions since the onset and investing without hitting for the fences, what would be a reasonable balance?” he asked. A quick answer to this question is $71,145 by year’s end. If you’re an aggressive investor, $88,311 is a reasonable amount to have at the end of the year. Using your tax-free savings account to hold your savings? Then $60,967 is a fair target. Rob Carrick reports. (for subscribers)

The trade war has arrived. Three things investors should consider doing right now

So it’s on. The trade war we all feared but hoped would never happen exploded this past week. Who knows where it will end. The world has not seen anything like this since the 1930s when President Herbert Hoover signed the Smoot-Hawley Tariff Act. That set in motion a series of international retaliatory actions that slashed U.S. exports by 61 per cent and imports by 66 per cent between 1929 and 1933. And what did that do for the U.S. economy? Gross national product dropped 46 per cent in that period. The unemployment rate in that country rose from 8 per cent at the time the Act was signed to 25 per cent four years later. None of this has deterred U.S. President Donald Trump and his advisers from embarking on the same protectionist journey. Gordon Pape explains what investors need to do now. (for subscribers)

Pipelines aren’t the cash cows many people think they are

A memo to the Liberal government, regarding Trans Mountain: Are you sure you want to buy this thing? The owners of Canadian pipelines have discovered something in recent years: It takes an awful lot of money to build and maintain them, year after year, and they don’t generate as much cash as you’d think. For a government that is buying control of the Trans Mountain pipeline for political reasons and hopes to flip it to a new owner soon, this may not matter. But for investors in the industry’s publicly traded companies, the cash-flow question is a critical one. The stocks of three of Canada’s biggest pipeline companies — Enbridge Inc., TransCanada Corp. and Pembina Pipeline Corp. — all touched 52-week lows in early April. David Milstead explains (for subscribers).

The euro threat: Why a well-informed investment professional is building a big cash position

Markets have shrugged off their worries over Italy. They may want to think again. While Italian bond yields have dropped back to more normal ranges after a spike earlier this week, the underlying tension in the euro zone has not abated one bit. Germany continues to be the big winner from the common-currency zone. Italy remains one of the biggest losers. Ian McGugan takes a look at Europe’s woes. (for subscribers).

This year’s top performing Canadian-listed equity ETF is a fund almost no one owns

Even though data breaches have been making frequent news headlines – including at two major Canadian banks this week – investors in Canada have been slow to embrace the fast-growing sector of cybersecurity. Returns suggest they may want to start paying attention: This year’s top-performing equity exchange-traded fund (ETF) on the Toronto Stock Exchange focuses on that sector. The Evolve Cyber Security Index ETF was launched last year under the symbol CYBR. Despite an impressive year-to-date return of 21.72 per cent in the fund’s unhedged version (and 17.47 per cent in a hedged product), the ETF has only attracted $12-million in assets under management since launching last September. Clare O’Hara reports.

This simple TSX stock-picking technique has generated an average 18.4 per cent annual return over the past 16 years

The stock market can be a complex and intimidating place, but you don’t need an advanced degree to succeed at picking stocks because some of the simplest techniques have yielded the most generous returns. One strategy is to seek profitable firms that trade at bargain prices. It’s an old value-investing technique that stretches back many decades in both the U.S. and Canada. Norman Rothery applies this method here in an effort to find large Canadian stocks trading at bargain-basement prices -- particularly those with low price-to-earnings ratios. (for subscribers).

TD’s strong performance this earnings season puts at risk a bank buying strategy that rarely fails

Toronto-Dominion Bank has emerged from the second-quarter earnings season as the clear winner among the Big Six, and its shares are reflecting the strong results. Can TD maintain its lead? To be sure, all six banks reported strong results. So, the banks delivered – but their results were hardly even, giving investors something to think about if they prefer to hop from one stock to another, rather than stick with one bank through thick and thin. David Berman explains. (for subscribers).

Metals prices, mining stocks poised for short-term weakness

The JPMorgan Global Manufacturing Purchasing Managers Index (PMI) is the most important economic data point for mining sector investors, in Scott Barlow’s opinion. The most recent release, on June 2, points to short-term weakness for metals prices and mining stocks. Scott Barlow explains. (for subscribers).

Top Links (for subscribers)

The best personal finance article I’ve read in 2018

‘This is not how bull markets usually end’

Others (for subscribers)

Tuesday’s Insider Report: Companies insiders are buying and selling

Tuesday’s analyst upgrades and downgrades

Tuesday’s small-cap stocks to watch

It’s not a waste to keep money parked safely

Others (for everyone)

Ontario Fair Hydro bonds offer fat yield and political baggage

Want to extend the global bull market by $6-trillion? Add women

Number Crunchers (for subscribers)

Thirteen stocks showing signs of strength in Canada’s materials sector amid a tariff trade war

Ask Globe Investor

Question: Some of your dividend stocks are getting hammered. Are you planning to change your strategy?

Answer: True, a few stocks in my model Yield Hog Dividend Growth Portfolio (I’m looking at you, Enbridge Inc., Canadian Utilities Ltd. and Pizza Pizza Royalty Corp.) have plunged since the portfolio was launched at the end of September. But over all, the portfolio’s performance has hardly been a disaster: For the eight months through May 31, the total return – including dividends – was negative-0.24 per cent. That’s not a reason to panic. What’s more, most of the stocks are continuing to raise their dividends, which is exactly what I was hoping for when I chose them. (Globe Unlimited subscribers can view the latest portfolio update at

So, no, I am not planning to change my strategy. Despite the recent weakness in dividend stocks, which has been caused mainly by rising interest rates, I am still committed to dividend-growth investing. With any strategy, there are going to be ups and downs and the correct response during a period of weakness isn’t to abruptly change course but to stick with the program. It also helps to look on the bright side: Because stock prices have fallen, when I reinvest my dividends – which I’ll be doing in the weeks and months ahead – I’ll be getting higher yields.

--John Heinzl

Do you have a question for Globe Investor? Send it our way via this form. Questions and answers will be edited for length.

What’s up in the days ahead

Think the robust jobs market in the U.S. is going to be good for your portfolio? Think again. Ian McGugan writes on why stock investors need to take the low unemployment rate as a harbinger of tough times ahead.

Click here to see the Globe Investor earnings and economic news calendar.

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