Weekend Reading – FI updates, top tech ETFs, finding financial compromise and more!

Weekend Reading – FI updates, top tech ETFs, finding financial compromise and more!

Hey Readers,

Welcome back to another Weekend Reading edition…highlighting some of my favourite articles from the week that was across the personal finance and investing blogosphere.

Just in case you missed last week’s edition you can find here: about inflation, early retirement case studies, self-employed tax tips and more. 

About the latter – don’t forget my TurboTax Canada giveaway! 

You can win 1 of 3 TurboTax Canada online versions to use this tax season by entering my giveaway.

I’ll be drawing some winning names in just over a week. And, for additional tax filing support, I polished off my promised tax tips post so you should see that published in the coming days. Stay tuned!

What’s up this week?

Last week we discussed inflation.

This week = Spring!

via GIPHY

Finally!

The weather in Ottawa this weekend is going to be amazing so we’re getting our terrace set-up to enjoy it. I suspect after a couple of hours worth of work, there might be a cold beer on the terrace in my future. Just sayin’….

Have a great weekend, enjoy and see you on the site and in the comments section!

Mark

Weekend Reads

Dale Roberts believes investing in bitcoin is a no-brainer.

The founder of Million Dollar Journey (Mr. Frugal Trader himself) has reached a new all-time high in this latest dividend income and financial freedom update. He has certainly been inspirational to my journey.

From his post:

“Our top 10 holdings have moved around quite a bit since the last update due to the big run in the financial sector. In our overall portfolio, here are the current top 10 largest dividend holdings:

1. TD Bank (TD)
2. CIBC (CM)
3. Canadian National Railway (CNR)
4. Royal Bank (RY)
5. Scotia Bank (BNS)
6. Bank of Montreal (BMO)
7. Fortis (FTS)
8. Enbridge (ENB)
9. Emera (EMA)
10. TransCanada Corp (TRP)”

Those holdings line up quite well to some of mine. I updated and shared my top-5 holdings on my FAQs page since it’s a question I receive often. 

I intend to use the income from many dividend payers to help fund my semi-retirement in the coming years, while working part-time.

You can read the sound advice about how to generate retirement income here from an advice-only planner. 

How to generate retirement income

Staying on the dividend theme, Mike from The Dividend Guy blog shared a few lessons from the past 12 investing months.

I’ve been a firm believer in his #6 lesson for well over a decade now:

“Dividend growers are part of the best protection against any market crashes. Many will tell you that gold or bonds are the best store of value for your money. However, if you invest in robust companies increasing their dividend year after year, your chances of outperforming the market are good and you will likely do it with less volatility. An asset printing more money each year is a real store of value for your portfolio.”

Nice stuff from a new blogger, Vibrant Dreamer, about the 5 best tech ETFs to invest in, in Canada. I invest in QQQ for my small tech growth kicker but I’m not against owning some Canadian content potentially. I’ve had my eye on a few of these ETFs as well: TEC, XIT, XQQ (for the CDN-side of QQQ) and others. 

Really nice to see an advisor find this level of financial compromise with a client. The advisor didn’t overhaul the portfolio, rather, found some complementary solutions. Great stuff Markus Muhs.

Matthew Freeman continues his march towards higher dividends this year.

On Cashflows & Portfolios we answered the question: when should I start investing?

Interesting stuff here thanks to a dedicated reader: Canada Revenue Agency (CRA) has released the year’s maximum pensionable earnings (YMPE) under the Canada Pension Plan (CPP) for 2021…and it jumped 5%. That is huge. Certainly a signal how the pandemic has changed things.  

Reminders!

Check out my dedicated Retirement page to ensure you can learn from successful retirees, how they invest and what they invest in, how they consider decisions about taking their CPP and OAS and more.

Including this one if you haven’t already read it:

Steven is single and 60 – can he retire on a lower income?

Reader question of the week (adapted slightly for the site):

Mark, 

Thanks for all of the great info! I was curious, as someone with a defined pension, what is your mix or ratio of ETFs to individual stocks? I also have a defined pension so feel like I can take a bit of risk (I’m 36) but am curious what is reasonable? Thanks! 

Thanks for your question!

First off, I consider my pension a “big bond” and formalized that thought years ago so I could commit myself to owning 100% equities in my asset accumulation years. And I have!

I own a mix of individual stocks and low-cost ETFs (as you know). I consider myself a hybrid investor and coined that term well over a decade ago as well. You can read a snippet of what that approach means in this recent dividend income update.

February 2021 Dividend Income Update

More specific to your questions, although I haven’t really looked at my portfolio in detail for a while (I don’t feel I need to….my dividend and distribution income machine is on autopilot) I estimate my ratio of ETFs to individuals stocks is rather low, probably about 30% to 70%. I’m actually working on increasing that ratio closer to 50/50 in the coming years as I move towards semi-retirement. 

You can read about that more here when I discussed my desire to have a modest cash wedge to enter semi-retirement with. 

How much cash should you keep?

By having this 50/50 mix, or even 40/60, more balanced, I will reduce some individual stock risk as I enter full retirement in my 60s and beyond. I intend to live off dividends and distributions while working part-time in my 50s. I figure this approach is a good hedge/to ride out another stock market decline (bound to happen…) and ride up total stock market returns when markets do recover by doing nothing at all. 

I can’t see myself selling all my individual stock holdings, potentially ever. They have been too good for me over the last 11+ years and I receive some very tidy income from them as well.

Thanks again for your question and your readership. I hope that helped a bit!

Happy saving and investing folks!

Mark