Earlier this year, largely for kicks, I wrote about 10 things I thought we would see in 2013. Now that 2013 is in our rear view mirror I thought I’d reflect on how clear my crystal ball was.
1.The S&P/TSX Composite Index will finish the year at 13,100.
Close but not quite. The index finished 2013 at 13,621.55.
2. The Dow Jones will finish the year at 13,900.
Not even close. The Dow had its biggest year in 18 years, closing 2013 at 16,576.66. For the year, the blue-chip stocks in this index were up almost 27%.
3. With renewed focus on Asia markets, RIM is the comeback business story of the year and makes the cover of Canadian Business Magazine at some point to prove it.
Unfortunately, it was far from a comeback year for this former tech giant. Research In Motion did not make the cover of CB Magazine as I predicted.
4. Crude Oil will finish the year at around $98 per barrel.
Oil finished the year close to what I predicted. Lucky guess.
5. The Canadian Dollar will finish the year at $0.97 against the U.S. Dollar.
Our dollar fell below parity with the U.S. dollar in 2013, finishing the year at $0.94 for about a 6% loss. I figured it would lose to par but not this much.
6. Speaking of dollars and cents, nobody misses the Canadian penny.
I still don’t.
7. Canadian REITs, measured by iShares XRE performance, will deliver 10%+ return.
Canadian Real Estate Investment Trusts (REITs) did not have a good year. The 2013 return for XRE based on net asset value was -6%. Maybe this year is the bounce-back year?
8. The following U.S. companies will announce dividend hikes this year: Coca-Cola, Johnson & Johnson, Procter & Gamble and Emerson Electric.
- On February 21, 2013, Coca-Cola announced a dividend hike of 10%.
- On April 25, 2013, Johnson & Johnson announced a dividend hike of over 8%.
- On April 15, 2013, Procter & Gamble announced a dividend hike of 7%.
- On November 5, 2013, Emerson Electric announced a dividend bump of 5%.
Correct on all accounts thanks very much.
9. The following Canadian companies will announce dividend hikes this year: TD Bank, Bank of Nova Scotia, Enbridge and Telus.
- On February 28, 2013, TD Bank announced a dividend hike of 5%.
- On March 5, 2013, Bank of Nova Scotia announced a dividend hike of 5% and increased it again this summer to the current $0.62/share.
- On December 4, Enbridge announced a dividend hike of almost 11%.
- On May 9, 2013, Telus announced a dividend hike of over 11%. On November 8, 2013, Telus announced third quarter revenue increased by almost 4% and promptly hiked their dividend, again, by almost 13%.
Correct on all accounts, even more than I bargained for.
10. Canadian bonds, measured by iShares XBB performance, will deliver 5%+ return.
XBB, a low-cost ETF that tracks the diverse DEX Universe Bond Index did not have a strong year. The 2013 return for XBB based on net asset value was -1.5%. With rates expected to go nowhere anytime soon it could be another subpar year for bonds.
Any lessons learned from this forecasting exercise?
I am no better at predications than anyone else, including financial experts who think they can predict the future. I am confident many blue-chip Canadian and U.S. companies that have increased their dividends over many decades, regardless of market conditions, will continue to do so. 2014 should be no exception.
What do you make of my financial predictions? Did you make any such predictions this year? How did you do?