Weekend Reading – Beat the TSX (BTSX) shines
Welcome to a new Weekend Reading post: the Beat the TSX (BTSX) shines edition!
You can review some of my latest posts below:
I provided an update on our financial goals, including some plans related to semi-retirement!
I provided this latest dividend income update, highlighting we are 91% of the way there towards a major financial milestone!
Weekend Reading – Beat the TSX (BTSX)
If there was ever a year to have a bit/hint of a home-bias for investing, this might be it.
Headlining this Weekend Reading edition, as an owner of many BTSX stocks for almost 15 years now, I enjoyed Matt Poyner’s BTSX 2022 mid-year update.
As a primer or a reminder for the BTSX strategy:
- Step 1: Find the TSX 60 Index (see low-cost ETF XIU as a proxy) and sort by dividend yield. (Note: the TSX 60 via XIU is the current collection of market-cap weighted Canadian blue-chip companies)
- Step 2: Select the top-10 stocks via yield. (Note: see histories of companies with solid dividend payments; so in your list you are likely to find in the top-10 telcos, utilities, REITs, and financial stocks)
- Step 3: Buy those stocks in equal parts and hold stocks without fail for one year. (Note: this process is repeated every January/once per year)
Of course, my deviation to the entire BTSX strategy is I don’t sell stocks and repeat the process every year. I tend to buy and hold and buy these BTSX stocks some more, over time. Your mileage may vary.
The incredible success of the BTSX strategy is in the pudding, including year-to-date:
(Reference: Matt’s great site)
My simple conclusion?
- Buying and owning BTSX stocks can not only deliver near-term returns but it can also deliver multi-decade portfolio income and overall growth success.
- Buying and owning BTSX stocks can help you weather market calamity – including as a hedge for inflation, rising oil prices, and beyond – you get paid to be an investor via dividends and growing dividends.
- Buying and owning BTSX stocks can be a great complement to the broad, big world of investing, via low-cost ETFs beyond Canadian borders or by owning other stocks in other sectors that fit your financial goals and risk tolerance.
Although I own a few other stocks for diversification, beyond Canadian telcos, utilities, low-yielding but growth oriented stocks, and finally, Canadian financials, I remain steadfast the BTSX stocks as a core concept of your portfolio could serve many DIY investors very well.
Further Reading with Matt and I: how to Beat the TSX (BTSX) and why it works so well.
Morningstar shared some of the best Canadian bank stocks to buy in 2022:
Here are some very inpsirational dividend income updates:
Kudos to GenY Money for already surpassing her 2022 goal.
“My “hourly rate” is now $2.94 whether I’m eating or sleeping or mowing the lawn.”
Love it.
Impressive update by Our Life Financial:
- “Total dividends received for June 2022 $3,406.10
- This is an increase of 57.17% YoY (June 2022 vs June 2021)
- 2022 total dividends received so far $17,620.32
- This means we’ve reached 50% of our $35,000 year-end goal”
Just wow from Dividend Daddy:
“My June 2022 dividend total is $6,310.72 This means that in June: I earned $210.36 every day from dividends ($6,310.72 / 30 days). I earned $35.86 per hour from dividends (assuming a 9-5pm job). I earned $8.76 every hour of every day of the month from dividends.”
Kudos to Matthew Freeman and his income journey.
“I do have some good news to share in regards to my dividend income, thanks to the semi-annual distribution payment from iShares Core MSCI All Country ex Canada ETC (Ticker: XAW) I received the highest amount of income for a single month ever. Compared to last June my income grew a whopping 48%. I received $954.58 this month from 18 stocks and one ETF.”
Jordan Maas continues to enjoy counting his dividends and whiskey tasting. Nice pairing, Jordan!
“Total Passive Income June 2022: $1273.40! *46% of this was 100% Tax Free!”
Very well done Vibrant Dreamer!
“To summarize, I made $1,282 in side hustle income in June 2022. I also had $2,120 income from passive sources which brings my total June 2022 extra income to $3,403.08 CAD which covers all our monthly expenses as a family of four.”
More Weekend Reading…
Speaking of ETFs above, Tom Drake highlighted some of the best ETFs in Canada to own.
From Tom’s list, I’m a big fan of the following:
- XIU for Canadian stocks.
- XAW for international stocks (beyond Canadian borders/ex-Canada).
From the Investment Executive, Canadian ETFs witnessed the largest outflows recently since 2013!
(People: you should be buying equities, not selling…sigh.)
“Almost $700 million flowed out of Canadian ETFs in June, the first negative month since before the pandemic and the largest drawdown since 2013, National Bank Financial reported on Tuesday. Equity ETFs lost $2.2 billion last month and cryptoasset ETFs saw redemptions of $697 million, accounting for 16% of the crypto category’s $1.8 billion in assets, the report said. Fixed income ETFs were the big winners, pulling in $2 billion.”
Nice reflections and milestones from Financial Mechanic related to her 5-year blogging anniversary!
Always a fine list of Sunday Reads courtesy of Dale Roberts at Cut The Crap Investing.
Over at Cashflows & Portfolios, what asset class returns could occur in the future?
Remember!
Last but certainly not least, join me online later this month in a live Q&A!
Join me above in a few weeks (during a day off work of course!) to chat and engage.
I look forward to sharing much of what I write about on this site with you and others 🙂
Have a great weekend!
Mark
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 – thanks for the mentions! As a BTSX investor myself, I am amazed by the results too.
To those who are having trouble accessing the site, I apologize. I have made an adjustment on my end that I hope will help.
Thanks Matt – readers were wondering and yes, the results are incredible!
Keep up the great stuff.
Mark
The BTSX makes a pretty compelling case.
Trouble is resetting it every year with investments in different accounts, tax implications etc. I wonder how many people do that, or just add what they don’t already have. As it happens I have 9/10 of them and previous couple of years had 8/10, without aiming for them.
Ya, I struggle as well my friend with the re-balancing and largely don’t do it – I just add more of the same stocks so my returns may or may not be as much as BTSX but close 🙂
I happen to own 9/10 this year and usually own 7/10 or 8/10 most years. The holdings really don’t change that much by design.
Hope you’ve been doing well!
Mark
Same.
Yep, doing fine and hope you are as well. Enjoying summer.
I have 7 of the 10 BTSX among others, of course. Thanks for the post!
Excellent, that should serve you well!
Mark thank you so much for this article, the more I hold those great BTSX stocks the more I realize that I made the best choice and I love to follow those companies and their progress and future developments. Matt does a great job at keeping the BTSX updated and also love reading his articles .
Thanks for the morning star picks I would love to add to either TD or RY in my tfsa but my contribution room is maxed sometimes I wish the government will give us a bonus contribution room for one year 🙂 but I guess that won’t happen.
Ha, well, maybe we’ll get $6,500 in TFSA room for 2023 – saving for that now while having some fun!!
I recall you have a nice basket of stocks Gus, well done 🙂
Mark
Thank you Mark! yes my portfolio is holding very well and of course Reit took the hardest hit but it’s fine I’m dripping more now that the price is lower as for stock selection yes I believe i’ve got a good basket of them I guess I learned from the best 🙂
LOL, you’re doing great!!
Mark, many thanks for giving us a link to the latest from BTSX. I must be doing something wrong because I’ve been looking for the last few days at that site, and I hadn’t seen it in recent posts over there, nor when I click on Blog and still don’t. Only when I click on your link.
I may be branded as a heretic but the longer I’ve done this over many years, the more I think that dividend growth is way overrated and investors forget that the vast majority of long term returns come from high dividend yield and the re-investment into other high yield equities. I see this readily in the BTSX portfolio. This doesn’t mean I don’t have low yield companies in our all Canadian non-registered portfolio that got started up for the second time in 2003 after the house mortgage was paid off. I do have a few low yield companies in there, but in the last while I’m starting to focus more on Canadian stocks that have higher dividend yields (around 4 to 5%) that many dividend growth investors will shun. These are equities outside of the four sectors that are usually found in the BTSX and aren’t in the TSX60. The only thing wrong with them is either the dividend growth is too slow for other investors or they don’t give dividend increases consistently each and every year. At least a couple of them also give investors “special dividends” every few years, which I’m always delighted to accept.
Perhaps my own personal dog stocks.
It’s funny you mentioned your problem with Matt’s site I also have the same issue of not seeing the latest post and I can’t even see it when I’m on my phone either it’s strange but I love the contents that he writes.
Odd Gus, maybe he put it under another header?
Here is the link again in case you want to bookmark it 🙂
All my best.
https://dividendstrategy.ca/btsx-2022-mid-year-update-a-light-in-the-dark/
Thank you Mark ! it worked 🙂
Odd my friend, again, same to Gus, maybe he put it under another header?
Same: “This doesn’t mean I don’t have low yield companies in our all Canadian non-registered portfolio….” (I own stocks like ATD, WCN to name a few.)
My sweet spot is also about 3-5%. That’s perfect for the ability to “live off dividends” to a degree.
How many stocks are you owning now?
I’m about 26 CDN and 6 U.S. with a few low-cost ETFs for extra diversification.
Mark
We own shares of 31 Canadian companies in the non-registered and have an all-in-one balanced global ETF in our TFSA’s and RRIF’s.
The last time we had individual U.S., and foreign ADR’s for that matter, was back in the 90’s. They all got sold off at the end of that decade to put a large down payment on our house.
Now the Canadian equities we own are within seven sectors, Whenever we have the cash, whichever sector is lagging in the portfolio, I just have to choose a stock within there, and add that extra money from savings and dividends to it. A bit of contrarian investing.
I would say that’s my sweet spot too Mark, 3 to 5% yield. Of course I’ll take higher than that when offered like in 2020.
Hope you’re enjoying the summer.
That’s a fine basket DividendsOn.
Ya, those BTSX stocks that operate in the 3-5% yield range offer a bit of capital appreciation as well.
We’ll see how things play out in the market this year, BTSX could have a banner year.
Mark
Thanks for the mention Mark! Have a great weekend!
Most welcome GYM 🙂
Hope you had a good one.
Mark
Another amazing weekend reading! Thanks for featuring me and certainly will join the QA! I am wondering if TD will hire you as an advisor soon so you won’t be ONLY your own advisor!
LOL. No intention to be a fee-only-planner – I like being “My Own Advisor” too much 🙂
Thanks for the social support as always. Always great to interact with like-minded people 🙂
Mark