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.
Gordon Pape’s mailbag: A late start to RRSPs, high-interest ETFs and other investing dilemmas
A reader asks whether it’s too late to start a registered retirement sa at age 70. Gordon Pape replies: It depends on how much you can contribute and your tax bracket.
Since you have never had an RRSP, you must have a lot of accumulated contribution room. If you are in a reasonably high tax bracket, you could generate a big refund for the 2019 tax year by opening an RRSP before the end of the month and contributing several thousand dollars to it. You will have to convert to a RRIF next year when you turn 71, but the money in the plan will be tax-sheltered until it’s withdrawn.
On the other hand, if you’re in a low tax bracket and don’t have a lot of money available, I would suggest contributing to a TFSA instead. Read more of his answers to readers’ questions here.
My model growth portfolio has generated stellar returns. Here are two more stocks I would add
In September, 2012, The Globe and Mail launched a project called Strategy Lab where four investors would each manage a model portfolio with an initial value of $50,000, Chris Umiastowski writes. Five years later, when we closed down the project, my model portfolio was worth more than $250,000. The most successful stocks in the portfolio include Netflix, Google (Alphabet Inc. since 2015), Apple, Tesla and Facebook.
My investment strategy is to buy the leaders in important, emerging industries where there is major disruption and innovation. Doing this requires you to recognize opportunity and generally have an optimistic mindset. Pessimists don’t seem to do well here because every great opportunity seems like a mistake. And if I was allowed, I’d likely add two more names to my portfolio: Nvidia and PayPal Holdings. Here’s why.
Lots of ETFs do dividends, but these do dividend growth
If you’re a diligent dividend growth investor, you have to be underwhelmed by what you’re seeing from ETFs and mutual funds, Rob Carrick writes. Dividend growth is one of the most meaningless terms in the fund world. Too often, this term means a growth-oriented equity fund that holds dividend stocks. Avoid these funds if you’re after true dividend growth, which means stocks that reliably increase their quarterly cash payouts to shareholders every year or so.
Two ETFs that make strong dividend growth a core part of their mission are just about to hit their first birthday, which means there’s a fair argument for ignoring them until more of a track record emerges. One of these ETFs is the Bristol Gate Concentrated Canadian Equity ETF and the other is the Bristol Gate Concentrated U.S. Equity ETF. Both ETFs are based on portfolios that Bristol Gate has been running for several years. A rarity in the fund world, they make dividend growth the focus of what they do.
More from Rob Carrick: The surprising twist in deciding how best to pay the investment management fee for your RRSP
Want to own real estate? Publicly traded REITs are hard to beat
Public and private real estate investment trusts are similar in that both own properties such as retail centres, offices, apartments and industrial buildings, John Heinzl writes. Beyond that, however, there are key differences that investors need to know before taking the plunge.
Public REITs trade on a stock exchange and are highly liquid. You can buy or sell them at any time – and in any quantity – at a price determined by the market. Public REITs are also subject to rigorous disclosure requirements, which includes the filing of quarterly financial statements that offer a detailed look at earnings, cash flow and balance sheet.
Private REITs, on the other hand, are less liquid and generally not as transparent. Units are typically available to “accredited” or “eligible” investors who may need to meet certain income or asset tests, and there is usually a minimum initial investment of, for example, $10,000, $25,000 or $50,000. Once units are purchased, there is usually a required holding period – typically several months. Redemptions usually occur on set dates and with a required notice period, so if you need your money right away, you may be out of luck.
More from John Heinzl: Shopify, Canopy Growth and more investing stars and dogs for the week
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Bargain hunting even as markets hit record highs? These global giants with juicy dividends could be just the ticket
Bargain-hunting investors may want to take a fresh look at the world’s big miners of base metals. As the panic over the spread of the coronavirus outbreak shows tentative signs of easing, producers of iron ore and similar bulk commodities appear to be attractively priced for gains.
Investors who want to bet on this trend continuing should consider taking a stake in mining giants such as Anglo American, BHP and Rio Tinto. Their share prices have all suffered as fears of a virus-induced slump in Chinese economic output have raised concerns about demand for commodity metals. Each now offers an unusually tempting yield. Their share prices could bounce upward, too, if the coronavirus outbreak comes under control over the next couple of months.
More from Ian McGugan: Why we need a better - and simpler - retirement system
What investors need to know for the week ahead
In the week ahead, Canadian and U.S. markets are closed Monday for statutory holidays, and reopen Tuesday. Canada releases inflation figures for January on Wednesday. Other economic data on tap include: Canada’s manufacturing sales for December (Tuesday); U.S. housing starts, building permits and producer price index for January (Wednesday); Canada’s new housing price index for January (Thursday); Canadian retail sales for December and U.S. existing home sales for January (Friday).
Warren Buffett’s Berkshire Hathaway releases its annual report and his letter to shareholders on Saturday. In Canada, RBC kicks off bank earnings season on Friday. Other companies posting results this week include Air Canada, Loblaw, Inter Pipeline, Magna, Emera, Dream Industrial REIT, Canfor, Teck Resources and Gildan Activewear.
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- When is the right time to retire? Maybe later than you think
- Long fall from the top: Why investors aren’t betting on oil and gas
- Isaac Newton, the speculator who bet nearly everything on one stock
- Thought traditional retailers were dead? The second best performer of the TSX this year will come as a shock