Well, here we are…another round of personal finance and investing predictions (along with some other predictions) – just for fun.
For the last few years I’ve made some financial predictions by looking into my cloudy crystal ball. Here is a post about last year’s predictions and results – I was happy to report a got a few of them right.
Here are recaps from previous years:
I recently checked what that trusty crystal ball told me for 2018:
- The Ottawa Senators will NOT make the playoffs.
I have purchased tickets for a few games this winter (I already attended one game in 2017 versus the Penguins), but this year has been an absolute disaster.
- The Tampa Bay Lightning will win The Stanley Cup.
I feel they are the best overall team in the NHL. We’ll see if they prove me right.
- Telus will increase their dividend by 5%.
In recent years, Telus’ Board of Directors announced they intend to grow their dividend year after year. We’ll see if they remain true to their word in 2018.
- The S&P 500 will finish the year at 2,970.
Last year, in U.S. dollar returns, the S&P 500 returned almost 20%! I certainly didn’t see that coming in 2017, which is why I always think the best time to invest was yesterday.
- The TSX will finish the year at 18,750.
- Gold will finish the year at $1,400.
- Oil will finish the year at $75.
I’m bullish on oil this year.
- Our dollar will finish the year at $0.82, against the U.S. dollar, by year’s end.
- All big-five Canadian banks will increase their dividend at least once in 2018.
We’ll see if I get this one right! I think with higher interest rates, all our biggest banks will increase their dividends: Royal Bank (RY), TD Bank (TD), Bank of Nova Scotia (BNS), Bank of Montreal (BMO) and CIBC (CM). I intend to buy more of these stocks in 2018.
- Kinder Morgan (KMI:US) will increase their dividend.
As a shareholder of only a few U.S. dividend stocks now (some of the remaining ones include T, VZ, JNJ, PG, DUK and SO) since I’m trying to use U.S. ETFs more – I figured this one was a stretch. We’ll see!
BTW – the Vanguard ETF VYM: it’s one of my favourite low-cost U.S. dividend ETFs you can read about here.
- I hope my wife and I can achieve both of these financial goals.
- Rory McIlroy will win The Masters.
That’s it! I hope you have fun following along in 2018.
In retirement my main focus is on maintaining a reasonably safe cash flow from pension, dividends, and FI generated as a backstop (that we have some control over), and eventually also depletion of most capital over time.
Therefore I am also interested in asset values (that we don’t have control over) and have tried to create a portfolio that gives some measure of protection/options regarding sequence of return risk.
Well, I’m interested in asset values for sure, for the reasons you noted but I guess my bias is seeing more income available to spend from my account since it’s motivating. I would probably get emotional if I only focused on capital gains – such as Friday’s dive 🙂
Sequence of return risk is very real and something I’m going to have to learn to manage in the future. Just not there yet.
Good to hear from you.
I understand that and can relate. You can measure and plan a “safer minimum” lifestyle that way.
The reality is though for those planning to spend down capital (whether by need or by choice, although choice has more safety) it’s total return in the end that matters. Having a plan that helps through those bad years is something I’m sure you’re going to be well prepared for with your financial interest and knowledge.
I hope so. I’m probably overly conservative with my investments and have some loss aversion which is why I probably (well, I know I do…) gravitate to dividend paying stocks – since I can see the tangible income flowing in to combat down markets/bear markets. It helps me sleep at night and besides, lower markets with dividends paid allow me to buy more stock shares at cheaper prices. I’ve seen this drill before (2008-2009).
It is about total return in the end but I think given my CDN holdings, over the last 5+ years, I believe 9% total return is pretty good by holding 30 CDN stocks. I’ve done well.
I am owning more lower-cost U.S. ETFs inside my RRSP as I get older for extra diversification – so that helps on that front.
You are wise to recognize that early on. I’ve seen my thinking evolve on that and like dividends more for the same reasons. Although being in retirement now can only add or make new positions as my rising equity glide path evolves, or asset rebalancing is needed. However my thinking also changed from 100% equities to roughly 60% in retirement, even with a pension that makes up a good deal of our overall income, so you have nothing on me re being conservative!
Yes, your returns are good. It hasn’t been hard making money in Canada since ’09. I think a lot of less experienced investors may not think much about this. Mine are less as expected, with between 50% and 60% equity during that period but well exceeding my goals and needs, but I’m bracing for the next leg down! Since we’re not tapping capital now cash flow”should” remain the same even with some correction. I “might” even be able to leverage better FI returns if rates keep rising. mighta, coulda, shoulda, woulda LOL
More US ETFs should help you with diversification and generate more US$ cash which I’m sure you’ll make use of with your travel bug!
hmmmm…bit of an interesting day in the markets.
I’ll say 🙂
Telus is up, everything else is pretty well a bloodbath. Not a pretty sight.
That includes overseas too.
Just for giggles I checked how much I’m down (on paper) today. $14K. Income generated by portfolio = no change.
Correct. Until the income changes I don’t worry.
Oh well. Not worried. Let the DRIPs do their work, reinvest more shares at lower prices and hold more cash.
Yes, a forebearer of things to come me thinks.
Good on you with your FI timing. Nice.
I hear ya Lloyd…the bull in me say’s to buy but the bear in me say’s to stay patient for further sale’s. I think Mark’s concept on picking up utilities/telco’s on the cheap when the market is over reacting could be a good call this year. BCE at 5.1% divvy…ENB at 6.1% divvy…juicy times.
I had days like that Josh. For now, all my investing cash is pretty well invested. A few dribs and drabs of cash in some of the accounts and I’ll probably throw all that into the DJIA e-series on Monday. Just the DRIPs for the rest of the year now.
We can now DRIP x2 shares of BCE tax-free (TFSA) and x1 share of ENB tax-free. Potentially more purchases inside my RRSP this year if things go lower. How can I not? 🙂
And next week three of the Brookfield companies report. Kinda hoping for some announcements of increased dividends.
I’ll call 4-5% dividend increases for BEP.UN and BIP.UN 🙂
Hopefully BPY.UN as well. I doubt BAM.A will go 5% but I hope they go up a bit.
Geez Lloyd. I held myself off until I saw your post. Only I didn’t giggle!
Same ballpark here -17K on paper. The drop in CDN $ saved me. Portfolio income also = no change.
I guess it also depends on how we do our accounting RB. I doubt we all do it the same. For example, I have the spreadsheet set up to show all my interest bearing products with the real time cumulative interest income added with the net worth of the product. So every time I enter anything the spreadsheet will re-calculate the new value of those products. In the case of Friday, my net worth would have shown an increase.
I also have the current $C as an input so any dividend paid in $US and converted will show a corresponding change. So technically, yesterday my paper dividend went up. Mark says he doesn’t calculate his that and I can see a valid reason for not doing it. I just like to play with the numbers.
Thanks Lloyd. I’m not that sophisticated with tracking mine. No spreadsheet tracking income as I’m not capable of building that myself and haven’t found one to use.
Have about 60% of equity in US $ so currency affects it. Some years good, some bad (2017) but all works out over time and is cheapest way to hold foreign ETFs.
I don’t keep track of the ratio of $US to $C holdings. I always trip up on how to classify my Brookfield holdings. I’ve only ever bought stocks on the Canadian exchange and my US “strategy” (not really a strategy per se) is to hold the TD DJIA e-Series fund.
Yeah, if you’re talking net worth, I don’t really focus on that. I really just think about two major things when it comes to our long-term goals:
1) what is the income we need to live from, from our personal portfolio + pensions + gov’t benefits to be “comfortable” (need $1 M personal portfolio), and
2) get rid of all debt by the time we stop working full-time and move to part-time work.
Otherwise the ebbs and flow of the stock market, interest rates, are totally out of my control and I can’t worry about them.
Is anyone else not concerned about our housing bubble and credit crisis? I don’t want to be a bear but this current bull market is seriously aging. I am weary of Canadian financials due to the debt level of Canadian’s and current housing to income ratio. As all the boomers are getting set to retire they need the younger generation/ Canadian new comers to buy their house’s and I think we are rapidly arriving at the inflection point with raising interest rates and current housing prices in most Canadian cities that this bubble pop’s. As such I as starting to position myself playing some defence both in portfolio allocation and defensive securities. I am calling TSX 12000 and DOW 19000. Thoughts? Am I overly bearish?
Great blog Mark and all the best to you and everyone for 2018. GLTA
Well, I do have concerns Josh. Especially so since my wife and I plan on moving in another year or so and will need to sell our house! I’m not too worried about our price point ~ 600k. Younger folks with good jobs can afford that as long as they don’t have tons of personal/consumer debt.
With all the Boomers getting ready to retire, there will be another shift beyond housing. These Boomers will need income from their portfolio. As such, they’ll need to think about income-oriented assets like dividend-stocks, dividend-ETFs, other. I think that will continue to fuel the stock market and prevent a great collapse.
Nothing wrong with playing any defense any time. Smart investors only take on the risk they need to.
Thanks for the kind words 🙂
Thanks for the reply Mark. I agree that Ottawa should be insulated from any major price drops, actually will be moving there myself in 2019, but Vancouver and Toronto are looking scary which will hopefully not have a major effect on Canadian financials if their housing market starts to wobble. When are you thinking of pulling the trigger on increasing your positions in utilities? FTS, EMA, AQN, ENB, TRP and the like are starting to look interesting at near 52 week lows.
Cheers and hope you had a great day,
I just bought more FTS ,EMA, CU today 🙂
Nice trade Mike. I pulled the trigger of FTS @43.25 and have my eye on ENB put holding out to see if the 44 level will be supported. Sweet 6% divvy now.
Own a few hundred shares of ENB and FTS and unless the dividend gets cut or reduced I will continue to own them.
I hope to buy a few more, as I get more money, in a few months. Trying to save for a condo and invest is not easy. I am buying more shares via my DRIPs. Every quarter: ENB and EMA DRIP x1. FTS DRIPs x3. AQN DRIPs x2.
I always find 52-week lows or lower are good times to buy.
Mark, your thoughts on IPL? I think u hold that one? Are you under water on it?
Just above water right now, depending on the account. ACB = low-20s since purchased in 2012-2013. As long as dividends are not cut, not too worried on this one.
Josh: If you are looking for just income – what about ENF?
ENF is good but I don’t hold lots – need to diversify!
Like Cannew, I also am not into predictions. But, it looks like there maybe a pull back this year – but temporarily and then the TSX might roar on to play catch up. But at some point there will have to be a correction (not a pull back) and lets hope that next year or 2020.
Time will tell Mike!
I’m not in to projections, but I think the TSX will drop by year end, so lest say 14,000
Ouch, if so, down >10%. Time will tell eh? I suspect you want your stock prices to go down right? Buy more shares cheaper via DRIPs?
Actually, having to withdraw less from our RRIF and reduce our OAS clawback.
Fair. Want to get max OAS if you can!
Nice list of predictions. The leafs wont win the cup? Blasphemy! I predict they will sign or trade for a solid d man. Great to hear about telus they are a company i want to add to!
Heres hoping the tsx catches up. Seems to be getting beat lately. The banks should surely raise their dividends this year.
I like your predictions. Hope they come true
No, the Leafs will not win the cup! 🙂 All the best to you in 2018.
I predict every stock I buy will go down and every stock I sell will go up. If I have a good crop, the price of grain will go down. If I fill up the car with fuel, the price will go down the next day. I predict I will lose every, ummm, “discussion” I have with DW.
(All based on past performances.)
Nice predictions, Mark. Will be interesting to see where we end up end of 2018.
Yes, it will be interesting!
I like your predictions! Hope you are right about TSX (we need to play some major catch up!!).
Some easy prediction in there (The Senators for one! hahaha!)
#1 Habs won’t make the playoff either
#2 Preds will win the cup (oh I miss Subban!)
#3 Telus will increase their dividend (and Canadian banks too!)
#4 I will never buy shares of KMI 😉 hahaha!
KMI will hike their dividend I think. Oil will rebound, eventually, I just don’t know when. Maybe to $100 by 2020?
No doubt you miss Subban!!!