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.
Despite some recent turbulence, Gordon Pape’s High-Yield Portfolio continues to average almost 9% annually
Gordon Pape’s High-Yield Portfolio is designed for those who are looking for above-average cash flow and are comfortable with a higher level of risk. It invests entirely in stocks, so it is best suited for non-registered accounts where any capital losses can be deducted from taxable capital gains. Also, a high percentage of the payments will receive favourable tax treatment as eligible dividends or return of capital. Here is an update on the securities it owns and how they have performed in the six months to Sept. 6, plus why he’s cutting its stake in Morneau Shepell and boosting its holdings in Brookfield Energy Partners.
Read more: How much CPP will you get? Here’s how to find out
A new way to stash cash in an investment account and still make a decent return
Holding cash in your investment account is a way of reducing stress about a stock market plunge, but it’s not a worry-free strategy, Rob Carrick writes. You’ve got to find at least a semi-decent return on your cash, or your money is basically dead. One option to consider is high-interest savings ETFs, which seem to be developing a following.
There are two complications with high-interest savings ETFs, the first being that some brokers don’t allow clients to buy and sell any cash-type investment product other than their own in-house version. The other is that with high-interest ETFs, most brokers will charge you as much as $10 a buy-and-sell trade – which will bite deeply into your interest gains if you have a small holding or trade frequently.
More from Rob Carrick: How to build a credit score that gets you a great mortgage rate
Why your returns may be better with all-in-one ETFs than individual funds
Most people want to invest in low-cost ETFs, but are overwhelmed by choice, Andrew Hallam writes. He suggests this solution, along with some examples: Consider buying an all-in-one portfolio ETF that offers broad diversification including Canadian, U.S., international stocks and bonds.
It’s not just easy, but potentially more profitable that picking a bunch of individual ETFs that offer similar market coverage. Why? Many investors speculate. They buy a particular ETF, only to trade it for another one they believe will do better. Some investors try to make tactical choices by tweaking their portfolio allocations based on economic or political news. It might sound like a smart strategy, but it usually hurts their returns.
Read more: Canada’s worst-performing tech stock has added another dubious milestone to its name
Update on one of National Bank’s Dividend All Stars
Late last month, Jennifer Dowty reported on a shakeup in National Bank’s Dividend All Stars portfolio, which included Dream Global REIT. This past week, private equity giant Blackstone Group said it is acquiring Dream Global, a Canadian company that specializes in European properties. Blackstone is paying $16.79 a share of Dream Global, which gives shareholders an 18.5-per-cent premium to the previous trading day’s closing value.
Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up here.
This ‘hot potato’ portfolio has gained an average of 15.9% annually over nearly four decades
The humble spud lends its name to two types of portfolios, Norman Rothery writes: the passive couch potato portfolio and the aggressive hot potato variety. The passive portfolio puts an equal amount of money into four major asset classes including Canadian bonds, Canadian stocks, U.S. stocks and international stocks.
The hot potato approach is easy to describe, but requires a bit of work in practice. Each month it moves all of its money into the single index (of the four used by the passive portfolio) that climbed the most over the prior 12 months. As a result, the hot potato portfolio changes fairly frequently and is not as diversified as the passive portfolio. It is, simply put, not well suited to passive investors and should be avoided by novices in particular.
This consumer products giant is now yielding 8.5% - and the really smart money thinks the stock is rock solid
Is Altria Group Inc. in trouble? The stock market says yes, but the bond market says no. Investors should pay more attention to the bond market, David Berman writes.
The company, which sells Marlboro cigarettes and other tobacco brands in the United States, has seen its share price fall 49 per cent over the past two years, including an 11-per-cent decline over the past week alone. The decline has pushed the dividend yield up to a remarkable 8.5 per cent – a flashing warning sign.
Yes, there are several concerns with the company. But the bond market, a reflection of credit-rating agencies and sophisticated institutional investors that tend to be less swayed by short term fears, suggests that the company is rock solid.
Related: Altria, Netflix and more of this week’s stars and dogs of investing
What investors need to know for the week ahead
Companies releasing their latest earnings in the week ahead include BlackBerry, Nike, AGF, ConAgra and Accenture. Economic data on tap include: Canadian wholesale trade for July (Monday); U.S Conference Board Consumer Confidence Index for September (Tuesday); U.S. new home sales for August (Wednesday); U.S. wholesale and retail inventories for August (Thursday); Canada’s budget balance for July plus U.S. personal spending and personal income, as well as durable goods orders for August (Friday).
Looking for more investing ideas and opinions?
A top-performing energy stock with 11 buy recommendations
With a unanimous buy rating, this stock has rallied almost 30% in 2019