I enjoy predictions, I treat them as entertainment. I had some fun with my 2015 predictions and I actually got a few of them right.
Many months ago I predicted the financial markets would be a wild ride in 2016. It’s actually been a nice uphill climb since the beginning of the year for the Canadian stock market – but the year isn’t over yet.
What stocks would raise their dividends in 2016? How would our dollar finish this year? Here was my forecast for 2016 and where things stand today.
- The Ottawa Senators will make the playoffs.
Nope. I didn’t come close to getting this prediction right, unfortunately. With new head coach Guy Boucher in town now, the Senators should be able to turn the page on an old chapter and start a new one for the 2016-2017 campaign. At least Sens fans like me are hoping so – they are off to a decent start this fall.
- The Chicago Blackhawks will win The Stanley Cup.
Wrong again. Did you have Sid the Kid and his Pens on your Stanley Cup shortlist at the Christmas break? I doubt it and neither did I.
- Telus will increase their dividend by 5%.
Finally a layup! In May 2016, the TELUS Board of Directors declared a quarterly dividend of $0.46 Canadian per share, payable to shareholders on July 4. TELUS intends to keep increasing their dividend annually in the range of 7 to 10% from 2017 through to the end of 2019. There might even be another dividend increase this fall.
- Enbridge will increase their dividend by 5%.
Enbridge has paid dividends for over 63 years. Their annualized dividend is currently $2.12 per share, and has been increased in each of the last 21 years. Over the past 11 years the dividend has delivered an average compound annual growth of 14%. No dividend increase yet but it’s going to happen.
- The Dow will finish the year at 16,500.
At the time of this post the Dow is around 18,162. Impressive. I didn’t see that coming.
- Coca-Cola will increase their dividend by 3%.
Coke is it. Back in February 2016, Coca-Cola raised their dividend to $0.35 per share. This was the 54th consecutive year they raised their dividend.
- Bonds will have a positive return in 2016, returning 3%, to be measured by iShares ETF XBB.
At the time of this post the ETF XBB has returned about 3.7% which is just ahead of my prediction.
- The TSX will finish the year at 13,000.
At the time of this post our TSX index is about 14,752.
- Oil will finish at $45.
It might but it’s been slowly moving upward of late. It now sits at $51.
- Our dollar will be $0.74, against the U.S. dollar, by the end of 2016.
Due to Brexit and other macro factors, it’s hard to know how our dollar will finish the year but for now, it’s past my target trading. It sits around $0.76.
- I’ll play more golf this summer (when compared to last summer).
Goal! I’m looking forward to men’s night next year already.
- Royal Bank will increase their dividend by 5%.
Goal! Although Royal Bank missed street expectations earlier this year they still managed to raise their dividend by three per cent to $0.81 per share.
Another couple of months to go folks. Let’s see how things shake down.
Do you make any predictions for fun?
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
Mark, talking of predictions, I like following Larry Swedroe’s “sure thing” series he runs each year, updated quarterly. So far this year, none of the predictions the “experts” made have panned out.
http://www.etf.com/sections/index-investor-corner/swedroe-sure-thing-predictions-batting-zero?nopaging=1
Thanks Grant. I like those articles. I will read that this morning while I prepare and post my Weekend Reading edition.
Nice predictions on the future. If you played baseball you’d have a hall of fame average!!!
Ha, I like it 🙂
Mark,
Nicely done with your predictions but your future organic dividend growth expectations are lower than mine. Perhaps you’re more conservative or you hold more large caps than I do but I feel my future DGR will be more in the 7% to 8% range. A drop to 5% seems a bit much but it’s still above inflation, which is one of my goals. By organic DGR I mean net dividend growth without reinvestments, additions, withdrawals or forex factored in.
I’m happy to get 5% dividend growth overall. I am conservative Bernie – it helps with my planning 🙂
I do hold a number of large cap stocks – most of the top holdings in XIU actually.
It’s tough to make predictions, especially about the future 😉
I agree with you that some items are easier to predict than others.
It is easier to predict that I will earn four quarterly payments of 80 cents/share on each share of Johnson & Johnson stock I own, than to predict whether the stock will sell above $80/share or below $80/share in an year. I would also expect a dividend increase in April 2017.
Perhaps I should try to do predictions also 😉
In general I do expect my organic dividend growth to be around 5% – 6%/year, on average ( based on decades of stock market history).
I hope my dividend growth is also around 5% per year. That would be outstanding but with slower growth, I’m simply happy with dividend increases when I get them – and as long as the companies I own continue to pay, I’ll be in good shape long-term.
You did pretty well Mark.
I try and avoid making them usually since they’re not often right!
Ha. One thing I find is the dividend increases are, for the most part, rather predictable. Imagine that?!
Yes, I can imagine!
We would be very rich if price increases were as predictable as dividend increases!
For sure!
Bernie, true price fluctuations of the market are not predictable in the short term, but over the long term they are, every market dip being a temporary interruption of a permanent uptrend. If it weren’t for human behaviour, the market would go up about a steady 10% a year.
The average annual returns from 1970 to 2015 (based on $CAD) are:
TSX : 10.35%
S&P500: 12.26%
EAFE: 12.06%
The average annual returns from 2000 to 2015 (based on $CAD) are:
TSX : 6.77%
S&P500: 5.05%
EAFE: 3.90%
The market is absolutely guilty of human behaviour.