When it comes to investing in a diversified portfolio of Canadian equities, there are usually two choices: a total return Canadian equity portfolio, or a Canadian equity dividend portfolio that generates considerably higher income.
While many investors look around the world for the best places to invest, money manager Robert Gill believes some of the best bets are at home in Canada, especially now. Mr. Gill, senior vice president and Canadian portfolio manager at Goodreid Investment Counsel Corp. in Toronto, says Canada is cheap with more room for growth. He notes the S&P/TSX Composite Index is trading at about 13.4 times earnings, while the S&P 500 is trading at about 18.6 times earnings, citing Bloomberg LP data as of May 9. Dividend yields are also 3.2 per cent for Canada and about 1.7 per cent for the S&P 500.
Years ago I was fortunate enough to be invited to Omaha, Neb., to have lunch with Warren Buffett. As Warren sat down beside me at Gorat’s, his favourite steakhouse, I was bursting with questions. After a brief introduction, I asked, “What advice would you offer a young person starting out in the investment business?” He replied by suggesting that the most educationally rewarding experience a new investor could have was to find their own pool of capital to manage, as soon as possible. Do not wait to be given a portfolio to manage; instead, ask your friends and family to invest with you. Consider starting an investment club.
Banks are only viable institutions with the trust of their customers. Banks rely on deposits to fund much of their business activity, such as commercial loans, mortgages and other debt offerings. Because they are vital to the economy, governments oversee and regulate banks rigorously. However, in this age of digital access, the concept of “a run on the bank” is quite different than it was 90 years ago at the start of the Great Depression, when as old photos illustrate, long lines of people formed to wait their turn to withdraw their money.
TC Energy Corp. (TRP-T) has recently fallen out of favour with investors, but we believe this would be the right time to add the energy infrastructure company to any investment portfolio. TC Energy transports oil and natural gas through 90,000 kilometres of pipeline across North America. It delivers energy to millions of people, connecting growing supply in the most prolific production regions of the continent to refineries and key end-markets. The company has a very stable business. So what happened, and why are we looking at it now?
There is a tremendous amount of commentary these days about the future of equity markets. Much of this talk is focused on what can be termed, “top down” issues, for example the geo-political tensions around the world or whether the economy will stall in the face of higher interest rates. But “bottom up”, company-specific analysis rules the day in the long term. Using a car road trip as a metaphor, focusing on the fortunes of individual companies to create a portfolio will determine your end destination, while those top down, macro issues will affect the route to your destination.
October baseball is here, where the best of the best teams in Major League Baseball duel it out to be crowned champion of the world for another year. And while there will be history made, exciting walkoffs, and bitter disappointment (sorry, Blue Jays fans), one thing is and has always been true – hitting a baseball is one of the most difficult things to do in all of sports. So what can we learn from it and how does it apply to investing?
Our new position, McKesson (MCK-NYSE), provides healthcare solutions in the United States, primarily through drug distribution. As such, it is relatively insulated from bouts of waning consumer confidence and has little exposure to the negative effects of an appreciating U.S. dollar.
Having managed professionally for over three decades, those of us at Goodreid have learned a few lessons. One of the most important teachings of the market is to live with, and respect, the process. Economies and their pricing tool, the equity market, naturally cycle, searching and adjusting to reach a perfect balance between supply and demand. Throughout this process the system spends almost all its time out of whack, with either a growth or contraction bias. Living with this imbalance means accepting with grace and having peace of mind during both upcycles and downcycles.
Robert is joining Goodreid from a prominent Investment Counsel firm, where he was Canadian Equity Portfolio Manager to institutional and high net worth clients. “We are excited to have someone of Rob’s calibre join the Goodreid investment team”, said Mr. Reid. “His approach and track record clearly illustrate his strong understanding of investment management, and in particular, the Canadian equity market”.
Who doesn’t like a gain? But the reality of many financial gains in this country is that you have a silent partner – otherwise known as Canada Revenue Agency (CRA). CRA’s piece are the taxes we pay. There are many exceptions to taxes on gains on capital (most notably in Canada on principal residences), but the purpose of this blog is to focus specifically on gains on the sale of publicly-traded shares.
After a screaming hot run for growth stocks off the pandemic-led economic and stock disruptions of March 2020, value investing made an impressive comeback in 2021. This has thrown equity managers for a loop, with only 40% of U.S. equity managers managing to outperform the S&P 500 Index this year.
For anyone wondering how likely it is that lumber prices will stay at current levels – roughly 4x the 35 year average price, and 197% above any prior cyclical peak, pre-2018, a recent announcement by Brookfield Asset Management tells us everything we need to know about that particular question.
CURA has rallied nicely over the past 3 months in lockstep with political developments in the U.S.. Shares picked up strong momentum when Joe Biden won the Presidency in November and gains continued as the U.S. Senate polls turned to favour the Democratic Party in Georgia.
We’ve likely all heard by now the breathless media accounts of how Shopify last week overtook Royal Bank as the largest company in Canada with a market capitalization of $127B.
Canadian banks are important…not just to Goodreid’s clients (although they are very important to us, comprising nearly 20% of our Canadian portfolio), but to the overall direction of the S&P TSX Composite Index...