There has been so much happening in the world that I haven’t had time to deal with new questions in my inbox. Let’s remedy that now.
Little-known stocks
Q: I’m a small retail investor. I’m retired, although I still work part-time for myself. I started investing in the nineties when I was in my early 40s. Although my returns have improved a lot in the last couple of years, I am always looking for some safer stocks to add or to replace the riskier ones.
I was wondering if you had an opinion about Olympia Financial Group (OLY-T). It pays a monthly six cents dividend and, according to Simply Wall Street, it has no debt, only 2.4 million shares outstanding and an outrageous 44-per-cent return on equity.
Another is Co-operators General Insurance Co. (CCS-PR-C-T), trading at $23.70 with a 5.27-per-cent yield. There are 4 million shares and an EPS of $24.16. The book value is really high at $110.23 according to TD web broker.
- Jack P.
A: Olympia Financial Group, which is based in Calgary, conducts most of its operations through subsidiary Olympia Trust Company. It administers self-directed registered plan accounts, corporate trust and transfer agency services. It does not take deposits. Olympia also provides currency exchange and global payment services through its subsidiary Olympia Currency and Global Payments Inc.
The company recently announced year-end results for 2025 and they were uninspiring. Revenue was down 4 per cent year-over-year to $98.86-million. Diluted earnings per share were down 17 per cent from $9.94 in 2024 to $8.25 last year.
The stock has a credible track record and shows a year-to-date gain of 4.6 per cent, as of March 20. However, the share price has softened recently, perhaps because investors are increasingly concerned about inflation and higher interest rates.
The shares pay a monthly dividend of six cents (72 cents a year) to yield 6.1 per cent at a recent price of $117.98.
To summarize, the yield is attractive but the recent drop in the share price suggests waiting until the stock stabilizes before taking a position. Also, note the stock is lightly traded (average daily volume is 2,203) which can lead to large intraday swings. Place a limit order.
The Co-operators issue is a preferred share that closed on March 20 at $22.89. It pays a quarterly dividend of $0.313, to yield 5.5 per cent at the current price.
Historically, this issue has been very sensitive to movements in interest rates. The share price was hammered in 2022 and 2023, dropping to below $18 in late 2023. It began a steady rise when the Bank of Canada started to cut rates and recently touched a 52-week high. But it has pulled back since the Iran war started. Where it goes from here is a question mark.
In sum, the yield is attractive, the company is sound, but the interest rate outlook could weigh on the share price.
Managing millions
Q: A few years ago, I switched to a wealth manager that charges 1 per cent. The return for the past years has been around 5 per cent. The manager claims the long-term return will be over 7 per cent. I am not happy, and their estate planning support is poor.
Working in tech, my wealth has risen to a few million. I want to go back to self-directed. How do you think I should proceed? Leave some at the wealth manager? Keep some in index ETFs such as XEQT and VFV and some in Income Investor portfolios? Note, each of these would be a few million. What do you suggest for these large amounts? Note I am quite familiar with self-directed investing and can handle risks and market downturns.
– Jim S.
A: I can see why you’re unhappy. A return of 5 per cent over the past two years is very weak. The TSX was up 28.25 per cent in 2025 and 17.99 per cent in 2024. Even if you put everything in an index fund, you’d have done much better.
Of course, much depends on the instructions you gave to your manager. If you asked for a low-risk portfolio, you may have been holding a lot of bonds and other fixed income securities, which have not done well. As for the 7-per-cent promise, it’s not worth much in the light of your actual results.
But that’s history. The issue is what to do now. For starters, I suggest you arrange to meet with your adviser and his/her manager. Lay out your concerns, and don’t pull any punches. Tell them what targets you expect and ask for a plan that has a reasonable chance of delivering those results. Put an exclamation point on it by saying you plan to withdraw $1-million, which you’ll manage yourself and will compare your results with theirs.
The next step is to decide where to invest that $1-million. If you want a fair comparison, the goals for the self-directed plan should be the same as for the managed funds. You say you have the knowledge and temperament to make your own investment decisions, so here’s your chance. Since I don’t know your goals and targets, I can’t provide specifics.
You mentioned the iShares Core Equity ETF Portfolio (XEQT-T). It’s a fund of funds, holding geographically diverse iShares ETFs. It gained 22.7 per cent in the year to Feb. 28. The Vanguard S&P 500 Index ETF (VFV-T) gained 10.1 per cent in the same period, in line with its benchmark.
Foreign diversification
Q: I have benefited from investing in U.S. stocks, which form a significant portion of my portfolio. Lately, I have been reading more about the decline of the U.S. position in the world related to many aspects (spiralling debt, degradation of democracy, Iran war).
As confidence in the U.S. may erode in the future, I worry about a flight of capital, loss of reserve currency status, and safety of my investments. I am concerned that Canadian investments may be taken down with the U.S.
In addition to gold, I was looking for other ways to add diversity (currency and geographic) to my portfolio. Would you recommend to your readers a Europe and Asia ETF as a way to add stability and safety?
– Paul H., Victoria
A: My view of U.S. markets is more optimistic than yours, but I have always encouraged geographic diversity. Here are some examples from my Internet Wealth Builder recommended list.
- iShares MSCI Europe IMI Index ETF (XEU-T). Recommended April 22/19 at $24.43. Closed March 20 at $35.70.
- CI Japan Equity Index ETF (Hedged) (JAPN-T). Recommended April 15/24 at $48.61. Closed March 20 at $67.35.
- Global X MSCI Argentina ETF (ARGT-N). Recommended May 5/25 at US$84.06. Closed March 20 at US$85.55.
- iShares MSCI Brazil ETF (EWZ-N). Recommended May 5/25 at US$27.12. Closed March 20 at US$35.06
- iShares Europe 350 ETF (IEV-N). Recommended May 5/25 at US$61.24. Closed March 20 at US$65.20.
- iShares MSCI EAFE index (CAD -Hedged) (XIN-T). Recommended March 18/13 at $19.68. Closed March 20 at $41.24.
It’s worth noting that all these ETFs were trading at higher levels prior to the start of the Iran war. That conflict will continue to exert pressure on global securities so you may wish to use a dollar-cost averaging approach when making any purchases.
Financial 15 Split Corp.
Q: I’m wondering about the pros and cons of holding FTN.PR.A as part of one’s fixed income portion, or do you consider this fixed income?
– Jim C.
A: FTN is the trading symbol for Financial 15 Split Corp. It operates a portfolio that consists of 15 financial services companies in Canada and the U.S. The fund offers two classes of shares: Class A (FTN-T) and a preferred share (FTN.PR.A-T), which is the one to which you refer.
The objective of the preferred shares is to provide investors with monthly cash dividends, currently 6.042 cents. The yield is 6.8 per cent annually based on a recent price of $10.70. Like other fixed-income instruments, preferred shareholders do not generally expect to generate capital gains or losses, but they do expect to receive their initial investment back upon termination (which could be many years in the future).
The Class A share investor would typically participate in any capital gain or loss in the portfolio and any additional dividends or income generated on the underlying securities. Currently, the Class A shares pay 12.57 cents a month, to yield 16 per cent, based on a price of $9.43.
The numbers suggest the Class A shares would be more rewarding in the long run. But they are also more volatile. During the Great Financial Crisis, these shares lost 83 per cent of their value between February, 2007, and February, 2009.
If you want steady income and relative price stability, choose the preferred shares.
Investing in ZAG
Q: I have 30 per cent of my RRIF invested in BMO Aggregate Bond Index ETF (ZAG-T). A large majority of the rest is in dividend paying Canadian equities such as banks and energy.
I’m new to bond investing. I want something that pays a decent return and I don’t have to worry about. Unfortunately, I bought a large chunk of ZAG last year, before Trump slapped tariffs on the world. There was a lot of angst in markets. So, my average cost is high. I have bought more to average down since.
Do you have any suggestions? Should I hang on, choose a different ETF, or continue to average down and build it up as I age?
– Paul C., Victoria
A: This fund is designed to replicate the performance of the FTSE Canada Universe Bond Index, net of expenses. It invests in a variety of debt securities primarily with a term to maturity of greater than one year. Securities held are a broad measure of the Canadian investment-grade fixed-income market consisting of federal, provincial and corporate bonds. In short, you’re investing in the total market of investment-grade bonds.
It hasn’t been a very rewarding experience. The fund produced a return of 2.5 per cent in the year to Feb. 28. The 10-year average annual compound rate of return was 1.95 per cent.
It’s worth noting that the 10-year average annual returns haven’t kept up with inflation. I suggest you consider diversifying your bond holdings to improve your fixed-income returns. One possibility is to add units of the iShares Core Canadian Corporate Bond ETF (XCB-T). It produced a total return of 4.37 per cent in the year to Feb. 28. The 10-year average annual compound rate of return is 3.1 per cent. You sacrifice a little safety but get a significant uptick in return as compensation.
If you have a money question you’d like me to answer, send it to gordonpape@hotmail.com and write Globe Question on the subject line. I can’t guarantee a personal response but I’ll answer as many questions as possible in this space.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.