Why run a portfolio when you can buy XEQT?

I have a portfolio composed of a number of individual accounts. I earn a good income in retirement from the dividends and the capital gains keep the overall value of my investments climbing. Yet, I cannot help but wonder if I could do as well or better by simply owning the iShares ETF XEQT.

iShares XEQT is an exchange-traded fund (ETF) offering investors a complete portfolio in one ETF. It is a complete portfolio assuming you don't want to hold any bonds. I don't. XEQT is an all-equity ETF. No bonds.

It holds four iShares ETFs: 

• iShares Core S&P Total U.S. Stock Market ETF for U.S. equity exposure (44.6% weight)
• iShares Core MSCI EAFE IMI Index ETF for international developed markets equity (25.7%)
• iShares Core S&P/TSX Capped Composite Index ETF for Canadian equity (24.9%) 
• iShares Core MSCI Emerging Markets IMI ETF for emerging markets equity (4.8%)

This one ETF holding four ETFs provides a diversified portfolio of around 10,000 stocks representing the U.S., the international developed markets, Canada, and lastly the emerging markets. XEQT gives one exposure to the global market for a management fee of 0.20% when last I checked.

XEQT only yields about 1.89% in dividends but it offers very good long-term capital growth. If I had all my money in XEQT would I be better off taking the dividends and then selling some units to cover living expenses in retirement?

The simplicity and global diversity of XEQT makes it an appealing answer to portfolio management. I have decided to run a test. I have created a test portfolio composed of one holding: XEQT with a value equal to my portfolio at the close yesterday.

Today, as I write this XEQT is ahead by $518.07. This means very little but stay tuned. Getting out of the stock-following business maybe possible. 😊 And if you prefer Vanguard to iShares, Vanguard offers VEQT. Your choice.

 

Mullen Group (MTL)

 

Just a quick note before I get going on today's stuff.

I like the Mullen Group. I don't have the money at the moment to invest but if I can round up some cash I am in. 

The stock has dipped below $13 but has not rebounded greatly since touching its low for the year. Check it out. A good company at a good price with a well covered dividend paying out more than five percent. The payout ratio is around 50%. Ideal, don't you think? It sure looks like a buy to me.

And a friend, who is a fine investor, agrees with me on this one as do a number of analysts. Do a Google search. You will find MTL has one booster who sees MTL hitting $22 and the average target price is better than $17. It is hard to see a downside to this buy.

Cheers!

TD Bank is now a HOLD!

TD was one of my core holdings. I was content to hold TD and happy to add to my holdings when the price dropped. Adding to my holdings was a mistake. The market was onto something that I was not: TD was in deep legal trouble in the United States. The second biggest Canadian bank has now put aside hundreds of millions of dollars in anticipation of some damn big fines related to money laundering accusations in the States.

TD is still a core holding of mine. I cannot afford to sell it and as I had no intention to sell, the pain is mitigated. I will hold onto my stock and pocket the 5. 43% dividend. My guess is that the dividend is still safe. TD has gotten enough bad press. It does not have to soil its reputation with its first dividend reduction in its long history.

If you hold TD, as I do, your losses may be around a long time, and keep holding. If you are a value investor, move with care. TD may be facing fines of $1.5 billion U.S. plus annual remediation costs in the hundreds of millions stretched over about four years. The painful scenario appears to be already priced into the price of the stock but have both shoes dropped? I am not so sure.

TD is officially off my buy list.

Expert stock pickers can be wrong and often!

To avoid being sued, I blacked out the analyst's name but the important information is still here. This stock picker has a win-loss ratio of 8:32. Going by his recent picks, he was right only 20% of the time. This fellow should stick to coin-flipping.

His average return was in the red at -6.0%. This is really dismal.

Years ago I gave a few thousand dollars to London Life to invest for my retirement. London Life lost something in the neighbourhood of 75% of my savings. When I retired, because there was a maximum loss clause, London Life game me back 75% of my original investment.

Losers! And they took me down with them.

Invest in dividend-paying, blue-chip companies, spread your money around, in other words diversify, try to not time the market but keep some powder dry to buy when the bear is loose and you should easily best analysts like the one shown or the folks in charge of my London Life investment.