Editor’s note: What you need to know in investing is this week is pausing for the holiday season. This is the last edition of 2019, and it will return on Sunday, Jan. 5, 2020. Wishing you all a happy – and prosperous – new year.
Canadian renewable energy stocks a boon for investors in 2019
Investors who embrace Canadian renewable energy stocks for the good of the planet have been rewarded this year with a pleasant side benefit: The stocks have soared, delivering gains that mock the fossil fuel-clinging political leadership in Washington, David Berman writes.
The share price of these three companies have seen strong double-digit gains: Northland Power Inc., which operates wind farms and solar facilities in Canada and Europe; Algonquin Power & Utilities Corp., which owns wind, solar and hydroelectric generating facilities in Canada and the United States; and Brookfield Renewable Partners LP, which invests globally in hydro, wind and solar assets. And the returns don’t include the stocks’ impressive dividends.
More from David Berman: Dollarama shares hit some turbulence, opening door for investors
I’m afraid of a market collapse. Should I go completely into cash?
A reader writes to John Heinzl that a friend is selling all of her investments by year’s end and asks whether she should do the same. He responds: The truth is that your friend doesn’t know what the market will do next year. Nobody does.
But let’s say she’s right and the market plunges in 2020. By going into cash now she’ll avoid losses in the short run. But getting back in might be a lot harder than it sounds. She might wait until investor sentiment has turned positive, by which time the market will have already recovered.
If you’re concerned about losing a chunk of your capital in a downturn, his advice would be to review your portfolio to make sure that you are diversified across sectors and hold only high-quality companies with a history of raising their dividends. (For examples, see his model Yield Hog Dividend Growth Portfolio.)
More from John Heinzl: Peloton, Netflix and more investing stars and dogs for the week
Gordon Pape’s Buy and Hold Portfolio continues to blow past expectations
Gordon Pape created the Buy and Hold Portfolio in June, 2012, with a very simple goal – invest in great stocks and then hold on to them, no matter what the market is doing. Over the long term, the strategy works, he writes. There are ups and downs, but the underlying thesis is that the long-term trend of the markets is up. If you own good stocks, they’ll move with it.
This portfolio consists mainly of blue-chip stocks that offer long-term growth potential. It also has a small fixed-income holding. Since inception, we have a total return of 133.9 per cent. That represents an average annual compound growth rate over seven and a half years of about 12 per cent, which is well ahead of its 8-per-cent target. These are the securities the portfolio holds with comments on how they performed since his previous review in June.
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The dirt-cheap ETF portfolio that keeps getting cheaper every year
Introducing the Freedom 0.10 Portfolio, a simple, sound way to put low-cost ETF investing to work, Rob Carrick writes. You might know this investing strategy by its previous name, Freedom 0.11. Before that, it was Freedom 0.15. Every year, I take on the challenge of building a solid portfolio of exchange-traded funds that costs less than the previous year’s. As you may have guessed, 0.10, 0.11 and 0.15 represent the weighted average management expense ratio (MER) for these portfolios over the years. MERs in ETF-land are in a downward trend, which means it costs less every year to build an ETF portfolio. Here’s how the Freedom 0.10 Portfolio comes together.
More from Rob Carrick: What happens to millennials in retirement if they never get into the housing market?
Why Canadians’ love affair with fixed income ETFs this year comes with a downside
Exchange-traded funds linked to the bond market have dominated Canadian fund flows this year, a rare occurrence in an environment when stocks are on the rise, Tim Shufelt writes. Canadian investors have plowed a record $12.6-billion into bond ETFs this year to date, accounting for more than half of all ETF net sales.
The spike in popularity partly reflects an overall demand for safety amid global recession worries. But this year’s bond ETF buying frenzy has a deeper, more lasting catalyst, as investors around the world increasingly replace physical bonds with liquid ETF products, said Daniel Straus, head of ETF research at National Bank Financial. That rising tide has also raised questions about potential unintended consequences of the ETF boom. ETF alarmists have long argued that the trillions of dollars flowing into passive funds could distort asset prices and lead to a crash.
What investors need to know for the week ahead
In the week ahead, Canadian inflation figures for November will be released Wednesday. Other economic data on tap include: Canadian existing home sales and average prices, plus the MLS Home Price Index for November (Monday); Canada’s manufacturing sales and new orders for October, U.S. housing starts, building permits and industrial production for November (Tuesday); Canadian wholesale trade for October and U.S. existing homes sales for November (Thursday); Canada’s retail sales for October (Friday).
Companies releasing their latest financial results include BlackBerry, FedEx, Nike, ConAgra Foods and General Mills.
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Finally, the cost of getting a reverse mortgage in Canada is getting cheaper
A province-by-province look at how to keep taxes low after you fill your TFSA and RRSP
U.S. tax-filing requirements that Americans living in Canada should know