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.
Why long-term dividend investors should consider snapping up utility stocks right now
If you aren’t planning to sell your stocks any time soon and you have money to invest, you shouldn’t fear a market pullback, John Heinzl writes. Welcome it as an opportunity to buy great businesses at lower prices. One beaten-up sector that offers attractive valuations is the power and utilities space, analysts say. For example, Raymond James analyst David Quezada’s “top pick” is Algonquin Power & Utilities, whose shares have dropped nearly 6 per cent in the past two months and now yield about 5.1 per cent. (Disclosure: The writer owns Algonquin shares personally and in his model Yield Hog Dividend Growth Portfolio.) You can find more analysts’ buy picks here.
Also from John Heinzl: Busting a myth about growth stocks and RRSPs
Read more: Bargains plus juicy yields: A dividend stock picking strategy that has produced monstrous returns
Canada’s favourite dividend mutual fund and dividend ETF square off
The awesomeness of ETFs has its limits, Rob Carrick writes. Exchange-traded funds are a simple, low-cost, transparent way to build portfolios for all kinds of people and all kinds of investment goals. Justifiably, ETFs are steadily grinding away at the mutual-fund industry’s dominance in retail investing. Are ETFs always a better choice than a comparable mutual fund for the do-it-yourself investor? He tackles this question with a faceoff between the biggest Canadian dividend fund and the biggest Canadian dividend ETF: RBC Canadian Dividend versus the iShares Canadian Select Dividend Index ETF.
Also from Rob Carrick: There are better ways to defend against rising rates than paying down your mortgage
Read more: A dividend prescription for yield-seeking investors
Holding firm through the market turbulence, Gordon Pape’s aggressive TFSA portfolio continues to gain more than 8% annually
It’s great to have an all-stock portfolio when markets are booming, Gordon Pape writes. It’s not so much fun when shares plummet in value, as they did last week. He started the IWB Aggressive TFSA Portfolio in March, 2012, for readers who want to maximize capital gains in a tax-free savings account through 100-per-cent exposure to domestic and international stocks. So investors should be willing to accept a higher degree of risk and volatility. Here’s a look at the securities in the portfolio and how they have fared since the previous review in March.
Why Canadian equities have become a favourite for this fund manager overseeing billions
“Canadian equity has been our favourite recently,” says Alfred Lam, chief investment officer of CI Investments’ multiasset division, which oversees more than $40-billion in assets under management. “People have been concerned about commodity prices being lower. A lot of these concerns are built into the lower valuations of Canadian markets … but you’re starting to see some M&A activity that will potentially drive the value of some of the energy companies.” He spoke recently to The Globe about his investing approach, what he’s buying and selling these days and his take on the gyrating markets.
Read more: Why it may not take long for stock prices to rebound in the Canadian energy sector
How pro athletes and other high earners stick-handle high Canadian income taxes
RONALD MARTINEZ/GETTY IMAGES
After honing his craft over nine National Hockey League seasons, John Tavares finally reached the point this summer where he was free to choose his own destiny. The Mississauga native signed with the Toronto Maple Leafs on the first day of free agency, with a seven-year, US$77-million contract. Sports agents have long bemoaned the tax rates that high-salaried Canadian-based athletes face. But wealthy people have tools that can tamp down the effects of those tax rates. Financial advisers recommend their high-income clients, such as professional athletes, use a vehicle called a Retirement Compensation Arrangement (RCA) to help offset high income taxes. In basic terms, an RCA allows an individual to sock away up to half of their salary each year and delay accessing it until retirement, when the individual may well be living somewhere else and paying a far lower tax rate.
What investors need to know for the week ahead
Eyes will be on the Bank of Canada Wednesday for its latest rate announcement. The central bank is widely expected to raise its benchmark by one-quarter of a percentage point to 1.75 per cent. With corporate earnings season in full swing, expect results this week from: Bausch Health Companies, Halliburton, Kimberly-Clark, Newcrest Mining, TD Ameritrade, West Fraser Timber, 3M, Canadian National Railway, Capital One, Caterpillar, Lockheed Martin, McDonald’s, Verizon, AMD, AT&T, Agnico Eagle, Barrick, Boeing, Ford, Goldcorp, Hilton, Microsoft, Restaurant Brands, UPS, Aecon, Alphabet, Amazon, Atco, Bristol-Myers Squibb, Comcast, ConocoPhillips, Crescent Point, Hershey, Husky Energy, Intel, Maple Leaf Foods, Merck, Newmont Mining, Precision Drilling, Shaw Communications, Shopify, Teck Resources, Twitter, Union Pacific, Waste Management, American Airlines and Colgate-Palmolive. Economic data on tap include: Canadian wholesale trade figures for August (Monday), U.S. new home sales for September (Wednesday), U.S. GDP for the third quarter and consumer sentiment for October (Friday).
Looking for more investing ideas and opinions?
The best of Canada’s banks to weather a downturn
‘Should I wait for the next downturn to invest?’
Carrick on money: This retirement advice should be retired
The smart thing a lot of investors are doing with bond funds
A leading expert on valuing stocks has some comforting words for investors
Why this market sell-off is different
Short sales on the TSX: What bearish investors are betting against
Why spectacular returns could await investors in this telecom giant
Self-directed investing: A beginner’s guide to getting started as a DIY investor
Winnipeg single mom with no debt looks to build savings in TFSA, RRSP