Welcome to some new Weekend Reading: my habits of successful investors edition.
You can check out some other recent Weekend Reading editions below:
Most recently this supply chain issues edition and why we should all be concerned.
Is paying off your mortgage a mistake?
I have long believed cash flow (not just cash) is king.
Habits of successful investors
Before the weekend reading articles, I was reflecting recently on my 2021 financial journey, our goals for the year, our thoughts back to when we entered this full pandemic year…
First up, like I wrote about recently, I don’t see the current mess of supply chain issues completely going away. The pandemic has magnified our reliance on international, long-distance trade and while trade is generally good – I don’t think this is inline with any sustainability thinking. So, until we focus on capacity building manufacturing and services more locally, more prolonged supply chain issues could be the new normal.
Second, when I see the stock markets (Canada and U.S.) up well north of 20% at the time of this post, I have to comment that I certainly didn’t see any of this coming. Pleasantly surprised, yes. Will such returns occur again in 2022? Probably not. As such, I’ve thought about how I might guard against any major market downturn. What goes up, might come down again, hard.
Even with some modest inflation I will always keep some cash to manage market volatility.
Then again, I’ve never had any fear in continuing to buy more assets with higher inflaiton and markets at all-time highs. I have an investing plan and I largely stick with it. I feel as investors our shared goal is to grow our wealth – to live the life we want. So, unless you and I are investing the majority of our retirement nest eggs into something like Bitcoin *yikes*, or any other asset in a concentrated way, then I don’t really see the issue of buying more diversified assets near all-time highs. I’m simply buying assets at higher prices than I would have otherwise predicted. Good luck with predictions!!
Third and finally, I was reflecting upon what got me/us “this far” in our financial journey. With the 2021 market run-up, my mind has diverted to thinking about part-time work more and more. While it was always a huge financial goal of mine to retire at age 50, and I probably could have retired long ago if I/we made other financial decisions, having a paid off home was and remains important to us. So, paying off the house/condo before part-time work is the plan. Part-time work is really not an option until we become debt-free: now less than 3 years away.
So, our financial goals are very simple for the coming years – something I’ll write more about (soon) when I update our Financial Independence status:
With those reflections mind, I was recently asked to contribute to a post on Freedom Thirty Five Blog about just that – what successful investors do. Check out that post for my thoughts and my curiosity comments that headline Weekend Reading.
Have a great weekend!
Tawcan shared some great U.S. dividend stock ideas.
Dividend Growth Investor looked at some dividend initiators – as a fertile ground for your stock research.
He included companies like Apple and Visa as good examples.
In case you missed this popular post on my site, what is a Locked-In Retirement Account (LIRA) and how should you invest in it?
The Dividend Guy highlighted some of the best sectors to consider as we come out of the pandemic – hopefully!
Is retirement abroad dead thanks to the pandemic? I don’t think so but I would proceed with more caution myself. Read about my thoughts and the insights from others in this MoneySense article by Jon Chevreau:
Has the pandemic ended the dream of retiring abroad?
Over at Cashflows & Portfolios we summarized why taking CPP at age 70 makes the most sense – if you have the discipline to wait of course. I mean, where else are you going to get a 42% income boost for retirement??
Nice stuff by Mike Drak in the Financial Post related to financial independence: you need to get a handle on how you want to live. Agreed.
Morningstar highlighted active mutual fund money management continues to thrive in Canada.
Humm, choose wisely…
A reminder to check out Barry Choi’s beginner’s guide to travel hacking here.
Barry’s key tips are great, we do the following:
- Sign up for the credit card welcome bonus, while employing a 2-card method. That means you keep a primary credit card (long-term) and then apply for new cards every few years to take advantage of bonuses, perks, changed rewards, other.
- Use the credit card for the highest perks and/or redemption values that match your needs. Every credit card has a few different features – so figure out your spending patterns and obtain a card that gives you the most value. Consider travel cards that offer no foreign transaction fees or a companion voucher or a lounge credit as a perk.
More FREE My Own Advisor content:
How I invest in dividend paying stocks is always found here.
I keep dozens of free Retirement essays and case studies to help you out here.
You can read up about low-cost ETF investing, including how I invest in some ETFs, here.
Looking for free calculators, tools, or even my support? Check out my Helpful Sites page.
A reminder you can hire me! I also run a site with my partner called Cashflows & Portfolios, a site dedicated to free content for any age but also low-cost services about how to drawdown your retirement portfolio and provide personal, tailored answers to these time-tested questions:
- How much can I safely spend in retirement?
- Will I run out of money?
- What accounts should I drawdown first?
- What is the best drawdown order for tax efficiency?
- When should I take CPP or OAS?
- How much will my estate be taxed?
- And more!
Hit me up for your personal retirement projections report!
Reader question of the week:
Love the content. I’ll be brief. What are you going to invest in, in 2022? I read your Then and Now – Canadian National Railway article with great interest. If you have owned CNR for the last five years, you’ve done well.
Keep the fun content coming my way.
Thanks for your readership and question.
To be honest, no idea. Well, that’s not entirely true.
I learned some lessons in diversification last year at the start of the pandemic so I might own low-cost ETF XAW inside my TFSA again in 2022. I look forward to making that TFSA contribution in 5 weeks! 🙂
Beyond CNR, which always seems to be on my radar, I will of course keep you posted if I decide to pick similar or different stocks for 2022.
Last but not least, congrats to Rick and Karen – winners of The Wisest Investment giveaway.
Your books are going into the mail this weekend and more giveaways are coming!
Save, Invest, Prosper!
As always, check out my Deals page.
Have a great weekend!
The two American couples who retired at a young age in the mid-1980’s and early 90’s and I’ve followed on the internet for over two decades are holed up for the pandemic duration in a couple of different areas in Mexico. Very occasional visits home to the U.S., and that’s about it. No travel it seems to other cheap living areas of the world anymore, like they used to.
As for ourselves, we’re happily in voluntary lockdown since March 2020. Only go out when necessary, for groceries, doctor’s, dentist, that sort of thing.
Investment wise, still fling our distributions every quarter at ZBAL in the registered accounts. For the non-registered account lately been building up our consumer staples and consumer discretionary sectors with individual Canadian dividend paying companies.
Yes, I recall that couple as well.
Investment wise, that seems smart, re: been building up our consumer staples and consumer discretionary sectors with individual Canadian dividend paying companies in the taxable. I hope to make more purchases in WCN and CNR in particular in 2022 there.
Great Post Mark as usual.
I like when you said that you don’t have any problem buying shares of good companies even when the market is at all time high , two weeks ago I added BMO and POW corp to my portfolio and the price was at all time high then came friday 🙂 and I was saying to myself I wish I waited few days but like everyone knows no one can time the market so reading your article it reassured me that I’ve made the right choices also like Henry always says it’s the increasing income that matters not the price of shares which it will come later.
I’m so excited about next week with banks reporting their profits and hopefuly the news about increasing their dividends.
I suspect next week we’ll see a few 15% dividend increases from a few banks Gus. I can’t wait 🙂
“Henry always says it’s the increasing income that matters not the price of shares which it will come later.”
That can be quite true!!
I will be pretty happy if banks raise dividends on an average of 10%. I doubt BNS will not raise very high though.
I hear ya May. I suspect a slight raise by BNS but not much. I could see RY, TD, BMO and CIBC all raising at least 10%. I wouldn’t be surprised if NA raises by 20%.
Great roundup, Mark. That Freedom Thirty Five post is really something special.
He did a great job 🙂 Hope all is well with you!
Thanks for highlighting my post, Mark. I learn so much from this community. 🙂
I don’t know what I’ll invest in come the new year either. If the market continues to fall like today then I might pick up some more CNR lol. Looking forward to see what financial goals you have planned for 2022 and beyond.
Ya, I really don’t know. I have CNR again on my list. Ideally some more WCN too. XAW. A few others 🙂
Have a great weekend.
Right? Although I don’t want to try and time the market, Friday’s drop does give a little pause to jumping in on January 2nd with purchases in the TFSA!
Having said that I had my son buy more XUU yesterday for his TFSA, but he has a much longer time horizon than I do.
Yes, nothing wrong with making purchases on days like Friday. XUU is a great fund for the TFSA.