Weekend Reading – Food Inflation edition
Welcome to a new Weekend Reading edition about food inflation – a very hot topic.
Before some of my thoughts and personal navigation on that…
I tackled the subject of mortgage renewals and provided an answer to the fixed vs. variable mortgage debate here.
My wife and I have some very big, important goals we wish to accomplish in 2023 so I shared some updates on these financial goals here.
Weekend Reading – Food Inflation edition
Dang, food can be expensive!
But there are ways to combat this…
More about that in a bit…
The good news is, food inflation seems to be easing a bit.
Not that prices are ever going to go back down.
While inflation seems to be cooling thanks to our rapid rise in interest rates over the last few quarters, according to the latest data from Statistics Canada, some food items continue to rise in price. Buyer beware!
The Consumer Price Index (CPI) released April 18 shows inflation rose 4.3 per cent year-over-year in March following a 5.2 per cent increase in February.
That’s good but it also means that food prices are simply rising less quickly, hopefully signalling the worst of the grocery price hikes could be behind us. We’ll see.
I don’t know about you but when I shop, I see some sticker shock in the grocery store aisles at times. Some products are up 15-20% year-over-year.
We don’t eat much pasta but I read that this item rose about 15% when compared with a year earlier. We don’t bake too much around our place either but those supplies jumped as well. More detailed data is available at Statistics Canada.
I mean, food is so costly that I read somewhere that 1/3 of Torontonians, who are now accessing food banks in that city from time to time, have full-time jobs. I don’t have the facts on this but even if that is remotely true….yikes.
In another source, Canada’s Food Price Report 2023 predicts a 5% to 7% food price increase this year. So, prices are not expected to go down, maybe just slow down.
Source: CTV News.
How might you fight inflation?
Back in March 2022, over a year ago, I had my suspicions about inflation and seriously doubted any experts that believed inflation was going to be “transitory”.
To be honest, I didn’t believe any one of them…
Even earlier than that post, I highlighted our thoughts about how to invest to prepare for higher inflation, in January 2022 knowing it might not slow down for a few years:
Because we enjoy simplicity in our lives, we developed this simple plan of investing attack: a focus on these sectors and companies in these sectors to own more of over time to help fight inflation.
“Based on my thesis above, you’ll find the following sectors should help fight or beat inflation:
- Consumer staples (think products you buy or use every day)
In our portfolio, as examples, the following companies have increased their dividends in just 2023 alone:
- Energy – Canadian Natural Resources (CNQ), Pembina Pipeline (PPL), TC Energy (TRP).
- Consumer – Procter & Gamble (PG).
- Financials – Equitable Bank (EQB), Great West Life (GWO), Manulife (MFC), BlackRock (BLK), Sun Life (SLF).
- Utilities – Bell Canada (BCE), Telus (T) (I consider these utilities in many respects), Southern Company (SO).
- Commodities – Nutrien (NTR).
So, what I’m saying is, I try to eat my own cooking good, bad or indifferent!
But beyond investing, there is of course the day-to-day navigation of food inflation to manage.
While we cannot control the actual prices of food and related goods that come into our home, we can be very selective in how we plan, shop and also mitigate food waste. We will continue to practice the following:
- Shop for deals. We look for deals on apps like Flipp to monitor what’s on sale to help with #2.
- Plan all meals. Beyond the odd takeout meal, we pretty much plan most meals week by week. My wife is awesome at this for us…but I also help with #3.
- Continue to monitor our existing stock. This allows us to use up any existing supplies and buy in bulk as needed and where it makes sense, to, finally….
- Shop and stick to the list. My wife is excellent at this, I’m not, when it comes to potato chips. This is why I should not go shopping when I am hungry!
How are you controlling food inflation? Any tips or tricks to share beyond my basics? Send them my way in a comment!
More Weekend Reading – Food Inflation edition…
To help fight sustained inflation, The Globe and Mail (subscription) shared 13 stocks that have grown their dividends more than Canadian banks. Worth a consideration, to help you fight inflation and grow more wealth over time in your portfolio too:
“But a look at dividend growth trends in the S&P/TSX 60 index of big blue chips shows the big banks are decidedly mid-pack. According to Globeinvestor, National Bank of Canada has increased its dividend by an annualized 9.4 per cent over the past five years. The other Big Six banks range from 8.9 per cent to 5.2 per cent, which compares well to the latest inflation rate of 4.3 per cent.”
Here are some of my favs from the list:
- Alimentation Couche-Tard Inc. (ATD-T): Dividend growth of 19.9 per cent and a recent yield of 0.8 per cent.
- Waste Connections Inc. (WCN-T): Dividend growth of 13.6 per cent and a yield of 0.7 per cent.
- Canadian National Railway Co. (CNR-T): Dividend growth of 12.2 per cent and a yield of 1.96 per cent.
- Canadian Pacific Railway Ltd. (CP-T): Dividend growth of 11.7 per cent and a yield of 0.7 per cent.
- Metro Inc. (MRU-T): Dividend growth of 11.4 per cent and a yield of 1.6 per cent.
Interesting reading I finally caught up on, at Eat, Sleep, Breathe FI.
Site owner Chrissy shared one-years’ worth of Financial Independence Retire Early (FIRE) interviews by the numbers – and I was shocked to see how little some folks spend on housing, food and utilities. Some FIRE-folks are not homeowners which means some of their costs, depending on the location they live, might be lower than others but my goodness, some folks live in very low cost areas. Our property taxes here in Ottawa would rank in the top-5 on that list, in a condo no less.
Dividend Growth Investor reminded readers saving and investing your first $100,000 is the hardest.
Related to investing, it was a pleasure once again to contribute to the MoneySense edition to identify The Best ETFs in Canada for 2023.
While I feel there has never been a better time to fire your costly financial advisor and become a DIY investor, I can appreciate the process of selecting some ETFs could be overwhelming to many. From the article:
“Do-it-yourself (DIY) investors in Canada these days suffer from an overabundance of choices. There are more than 1,299 exchange-traded funds (ETFs) from 42 providers now listed on Canadian exchanges, making the task of constructing a simple “couch potato” portfolio that’ll likely do just as well as the investing pros more daunting than it has ever been.”
That said, I support many of the low-cost choices in this year’s edition that made the cut.
This 11th edition highlights the top 22 exchange-traded funds from the panel among Canadian, U.S., international, fixed income and all-in-one ETFs, and—fan favourite—desert-island picks.
A big thanks to the team at MoneySense for having me back for yet another year, including my commentary for this 2023 edition, and thanks to my super-sharp partner on our picks: Yves Rebetez, CFA, who is a partner at Credo Consulting, a brand analytics and research firm focused on the Canadian financial services industry.
DIY investing is not without some risks, especially if you love crypto. (I do not.)
“Ever since the first major crypto boom in 2011, tens of thousands of cryptocurrency coins have been released to market. And while some cryptocurrencies performed well, others have ceased to trade or have ended up as failed or abandoned projects.”
When in investing doubt, a simple all-in-one low-cost balanced ETF could do the trick. Dale Roberts highlights some ideas in this post.
Last week, Kanwal Sarai released episode 1 of 2 of our interview on his Simply Investing Dividend Podcast. Well, he just released part 2 of 2 here. Enjoy the podcast and leave me a comment about anything I mentioned! In this episode we discussed:
- bucking any “conventional wisdom” that states as you get older you must start moving out of equities
- my feelings on having a/any plan when it comes to investing
- what keeps me up at night, when it comes to today’s economic climate
- some of the personal finance advice I would give my younger-self
- and more including my work below about…
If you are interested in obtaining private projections for your financial scenario, check out all the details here!
Less Cashflows & Portfolios work this weekend – I look forward to my brunch/lunch with you very soon, Mom! 🙂
Have a great weekend everyone.