Thoughts on investing

I'm old and retired but my days of investing for the long term are not over. To a great extent, my wife and I live on the dividends from our investments. We like companies with long histories of honouring dividend commitments. The big five Canadian banks all meet this criteria. And the big utilities, like Fortis and Emera, are also in this league.

My wife and I treat our retirement portfolio like a vegetable garden except our financial garden produces money. Take Fortis, the giant Canadian utility, it has not missed a dividend payment in almost 50 years. In fact, Fortis has raised its dividend in each of the past 49 years.

Does that mean an investor could not lose money investing in Fortis? No! Recently, Fortis hit $62. Now, one can pick up a share for less than $57. Clearly, there are investors who have lost a good chunk of their recent investment in Fortis and if they sell today they will realize that loss. But, if they don't sell they can enjoy the growing dividend and at some point they will realize a capital gain with the recovery of the share price. And it will recover. Of that, there is absolutely no doubt.

Which brings me to two recent stocks that attracted my attention and I acted on that attraction: Telus and TC Energy. Both dropped in value soon after I increased my exposure. I had owned some shares of both. I even wrote posts proclaiming that these stocks were buys; a relative acted on the advice and bought. He and his wife have lost a lot and I worry they might lose faith and sell. Gosh, I hope they can hold on. I still believe both stocks will prove to be good, long-term buys.

With Telus, I am not alone at seeing a buying opportunity. When I check the Analyst Consensus page on WebBroker, I find Telus rated a Strong Buy. I could not agree more.

The 6% dividend not only looks secure, many believe it will increase in the coming year. With a target of more than $29, I happy to own Telus.

Now, look at TC Energy. TRP is almost 30% off its high of the past year. That puts the stock firmly in bear market territory and yet Morningstar only rates TRP a 4**** (four star) stock. Bottom feeders may want to wait but I am happy buying today. Why? Well, for one thing, I immediately begin enjoying the TRP 7.3% dividend. That is the kind of safe dividend that every retiree covets. 

Thanks to dividend paying stocks like Telus and TC Energy, plus the Canadian banks, the large Canadian utilities and a big, smattering of North American REITs, my wife and I withdraw more four percent or more annually from out retirement portfolio without worry. Do we worry about running out of money? Maybe we should but we don't as our portfolio is about twice as large today as it was when I retired some fourteen years ago.

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Telus: Still a buy today

This morning, before the market (TSX) opened, bad news hit the air waves concerning Telus, or more accurately about Telus International (TIXT). The important thing to remember is that Telus (T) is not TIXT, nor is it a wholly owned subsidiary. I bought shares of Telus yesterday at $25.20. Now it is down $.49 from that price but this is not the whole story.

The target price for Telus has dropped a little but the anticipated gain for the coming year is still excellent and investors are being rewarded for their patience with a dividend of approximately 5.8%. The dividend growth rate of about 7% still seems reasonable.

If the market panics and the Telus price continues to weaken, I see myself as a buyer and not a seller.

Telus: the story just gets better

 

I saw Telus as a buy a few days ago. I added to my position. This morning, watching BNN, I noticed Telus (T) was down even more today than it was yesterday. And yesterday it was awfully attractive.

I immediately booted up my computer and logged onto TD WebBroker. I picked up another few hundred shares of Telus at a truly fine price. Telus is now yielding 5.77%. This stock is a keeper in the short term and a core holding in the long term. I am one happy retired investor.

I can see a very nice profit at the end of the Telus rainbow.

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Telus has gone up nicely since I made my last purchase. It appears that lots of other investors agree with me, Telus is worth trading today. Its trading volume is well up for the day.

I see Telus (T) as a buy today.

I noticed today that Morningstar is rating Telus (T) as a five star buy. I bought: 500 shares.

As a dividend investor, Telus, yielding 5.66% at its present price, is a wonderful stock. A generous dividend with a low chance of being cut by any meaningful amount.

Selling today at a price approaching its low for the year, Telus (T) has lots of headroom. I would not be in the least surprised to see Telus selling for more than $30 sometime in the coming year.

I am stocking up on Telus; I'm buying more than I have as my goal. I plan to sell the excess when the time is right. One must always keep avenues open for generating not just yield but cash for future retirement portfolio purchases.

Telus is one of my core holdings in my retirement income portfolio.

TC Energy (TRP) In my book, today this is a buy.

TC Energy (TRP) is flirting with its low for the past year. Also, it is off its high for the past year by about 25%. This puts the stock well into bear territory. I believe TC Energy is a solid company paying a dividend that a retiree can trust -- a dividend yielding more than 7% today.

Can TRP go deeper into bear territory? Sure. But, I don't see it losing any amount that I would find frightening. It has absorbed some big losses already. I cannot see more of the same happening in the near future.

Moments ago, I put my money where my mouth is; I added to my TRP position. I look forward to my first dividend in a little more than three months. My retirement income has taken a $744 pop with this purchase.

My latest crack at a "Retirement Portfolio"

I have been checking out retirement portfolios posted by financial experts found on the Net. You see, I am an outlier when it comes to most portfolio-building approaches. For instance, I balk at investing any of my retirement money in bond ETFs. And so, I like reading how others approach portfolio building.

I have been wondering how I would invest my savings if I were retiring with a million dollars in savings today. I'd take my inspiration from the Canadian market itself and invest in most, if not all, the market sectors: financial, real estate, utilities, energy, etc.

The result of my weekend musings can be inspected below. I built this million dollar portfolio Saturday. It immediately jumped more than $4000 in value on market open Monday. I'll check this portfolio once a month to see how it is performing.

I have been considering Mullen Group, Algoma Central Corp and the ETF VIDY as additions to my actual retirement portfolio. I'll be watching these three investments and following the perform of each with great interest.

Oh, if you are interested in what percent of the total portfolio each investment represents, just look at the first numbers in the Market Value and round the number up or down to the nearest number that is a multiple of five. For instance ALC is 2.5% of the total portfolio and BMO is 6.0% and BNS is 3.0%. (This corrects an earlier error.)

 

 

I checked my million dollar portfolio in early afternoon. The gain is closing in on nine thousand dollars. Is this confirmation of my approach to portfolio construction? Not necessarily. 

What it does demonstrate is market volatility. Do not overreact to market ups and downs. Always keep in mind that the market is up a full two thirds of the time. In the end, investors with the long range view always come out ahead.

One has to be very careful when reading posts recommending an investment strategy. Stock markets are very volatile. My retirement income portfolio which was thrown together on the weekend was up $17,815.90 at market close just three days later. Someone pushing a certain investment approach can make most approaches appear very good on paper; just choose the right reference dates.

Let's be honest. There may well be a recession coming. It may be mild but it should take the markets down a notch or two. These gains, so quickly amassed, could disappear just as quickly.

But this portfolio will deliver a nice income and most of the dividends are rock solid. This portfolio should get a retiree through tough times with cash to spare.

By market close Friday I was amazed at this mythical portfolio's balance. It was up almost $32,500. Wow!

During the week, I have been adding some of the investments in my mythical portfolio to my actual retirement portfolio. In calculating the number of shares to own, I have been guided by the portfolio percentages used to create this mythical portfoliio.

I am pleased to say that taking my investment inspiration from this mythical portfolio is proving to be a fine move.

To see where this theoretical portfolio was after almost a month, please click the link: 

Retirement income portfolio update