Weekend Reading – Promo codes, stock selections, pension income and more #money stuff

Weekend Reading – Promo codes, stock selections, pension income and more #money stuff

Welcome to my latest Weekend Reading edition – where I share some of my favourite articles from the week that was across the personal finance and investing blogosphere.

These were my posts from the past week:

I informed readers about this stock selection performance in my portfolio – Bell Canada.  From my article:  “BCE is yielding close to 5% now and they continue have a whack of free cash flow. That means, over the next few years dividends should continue to rise and rising dividends – as you know – help drive our portfolio.  Long BCE.”

Should you defer your Canada Pension Plan?  I think retirees should consider this based on their own financial needs and objectives of course.

Before I get to some articles, a reminder about some great deals I’ve established:

Stop delaying!  Save, invest and prosper!

Use my promo codes and other Deals from this page hear to save more, earn more and invest better!

Now for the articles…

I liked this Retire Happy article about new financial planning numbers for 2018.  In the article, there are RSP contributions limits, TFSA limits, CPP and OAS benefit tables and more.

The Dividend Guy took issue with Rob Carrick’s comments about dividend investing being a cult.  Good on him.  Let’s be honest – there are ETF cheerleaders, stock cheerleaders, dividend cheerleaders, mutual fund cheerleaders, housing market cheerleaders and on the other side the continuum, pessimists for all the above and more.  My thoughts – invest how you want to invest to meet your own financial objectives (or your family’s objectives) and don’t worry about anyone else.  If that means you’re a GIC cheerleader – based on what your financial plans says you need to invest in – then good on you.  Personal finance and investing should be about respecting the individual’s (or the family’s best interests) to maximize investment return and mitigate risk.  Unfortunately some people think, maybe too many people these days think, unless you invest in low-cost ETFs you’re an idiot. Sad.

This study confirms some of what we already know – Canadians are content with their financial advisors – to a ridiculous degree.  From the article:  “A survey conducted for Hennick Wealth Management shows that an average of only 3% of Canadians who use financial advisors were dissatisfied with the services they received.”  So we’re saying 97% of people (surveyed) who have financial advisors are satisfied?  That’s crazy high.

The folks at the Financial Planning Standards Council remind us that while robo-advisors are great financial planning often needs to go beyond algorithms.

Other fine reads and upcoming reads:

With “RRSP season” approaching, it’s good time to review how to build a fat RRSP nest egg.

With “TFSA season” already here thanks to new January contribution room, stay tuned for a new post from yours truly about great things you can do with your TFSA next week.  Until then, have a great weekend!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. 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.

42 Responses to "Weekend Reading – Promo codes, stock selections, pension income and more #money stuff"

  1. Mike: Good work on being successful trading, as mentioned we were not doing it and switched to the Slow & Steady. Like Lloyd we’ve achieved a point of satisfaction, even though we have no DB. Maybe we’ve gone to an extreme, but only time will tell.

    Reply
    1. Cannew: I don’t think you need to add any more risk or stress to your life. What you have in place – works for you. It’s not extreme at all! I hope to be able to be at the same place as you – one day. Meaning, that I can slow down and relax and go the slow & steady way. I have no DB either (haven’t worked as an employee since I was 28). Hate debt (makes me feel like I am a slave to money) – so I never have any debt! Paid cash for my house (no mortgage) years ago and since my divs pay all my living expenses, fun, travel etc – anything I made (since age 35) – I have invested (mostly in myself), but in many rental properties, businesses etc. Thanks for sharing your story and what works for you. Your a good guy!

      Reply
  2. Cannew: Very interesting & thank you. Last week I decided that the market is showing signs that a pull back might come sooner than what I had been expecting might happen. Don’t get me wrong – I do not like predictions or making them – but – I do like preparing for the possibilities. With this said. I moved some $$$ around and also took some out of the market. (now sitting in a HISA). That’s why I am looking at bonds, however I think of bonds the same way you do. We both like the DG stocks as our core holdings. However, I also look to hit home runs where I can double my $$$ quickly and get out (my whole life has been risky). I did this with some pot stocks where I made over 250% gains in 6 months. Totally liquidated these holdings and sitting on 7 figs. Now with the market at a high – I am stuck with what to do. But I want to do something – as this is too much $$ to leave in a HISA. Plus- I have a little project I am working on – that is to turn 25K into a million in 12 months and this needs more of my time. It is very rare that I do not know what the next step is to do with cash – but that’s where I am at.

    Reply
  3. Mike: We hold 13 Cdn stocks only in all our accounts, 2 RRIF, 2 TFSA and Non-Reg. I personally feel diversification is like trying to be a “Jack of All but Expert in None”. But for many ETF’s may be their best choice, it just not what I want.
    One has to pick the route they feel is best for them.

    Reply
  4. Like Mark, I’m not the one to advise others, though I do have a bias for sticking with DG stocks.
    At 50’s you sound like your in good shape. I know what we did in our 50’s (just turned 76) & what I’d do if I could go back, but that’s us and most would not even consider it.
    I have advised our kids & grandkids, Stick with a select group of DG stocks (10 -15), add to them over time, reinvest the divs and ignore everything else. Add some US DG stocks (up 5) to rrsp if they want, but no etf’s, bonds, preferred or mutuals and max Tfsa first.

    Reply
    1. Strong advice. I hope by our 50s we’ll be in great shape. The 13 stocks you own, I own them too and have no intention of selling them. I also own other stocks in my portfolio as you know:
      https://www.myownadvisor.ca/dividends/

      It is our hope that by age 50, maybe we’ll be close to having the portfolio churn out thousands of dollars in dividend and distribution income.

      We don’t own many U.S. stocks anymore, only a handful, I’ve been gravitating to holding just a low-cost U.S. dividend ETF like VYM or HDV.

      At this point, we don’t own bonds or bond ETFs or preferreds or mutual funds. We’re trying to keep it simple and simplify more over time.

      Reply
  5. Cannew: Thank you for explaining what worked for you. I am in the process of making a decision regarding my portfolio. I hold roughly 20 DG stocks (that I plan to keep forever – as I look at these as my core holdings) but have around 10 that I could start to take some gains on and do something-else. I have been leaning towards bonds – only because the market is high and I can see a healthy correction on the horizon. Like you – I have never owned bonds as I have similar views. I really do not know enough about bonds – other than if I was to purchase today – should be mostly short term ones. I have been looking at etfs like: XBB. My thinking is that if I hold some bonds and the correction hits – I could sell the bond etfs and buy stocks at a discount. I could also do this by holding cash in a HISA. Your thoughts?
    It appears you are a bit older than me (i am in 50s) and was a bit surprised at first to hear you do not hold preferreds like CPD, XPF etc.
    Do you worry about diversification? Meaning – it appears you hold CND DIVs. USA, Europe, Emerging Markets etc?
    Q: Lets say you were a new investor (today) with a million $$ to invest. What would you do?

    Reply
      1. Cannew: Do you live off the Divs from these 13 stocks? Plus CPP & OAS? or do you also have a DB pension? I guess you hold onto some cash for a rainy day?

        Reply
          1. Mike: we do take $10k or more from our rrif each year if needed, so those would be div’s as well. We’ve always transferred shares from the rrif to tfsa.

            Reply
        1. Cannew: Very interesting..May I ask what you do at times there is a correction. Like 2008? Do you just continue to collect the divs and not worry about the drop in the portfolio value? Is there a reason you don’t hold bonds? Do you ever take some gains?

          Reply
          1. Mike: In 2008/2009 our holdings dropped about 35%-45% in value, but the Income for those years grew from the previous years, though not at the same rate, about 2%-3% compared to 8%-10%, even though the banks held The only cut we had was MFL. So as we did not need all the dividends, we continued to reinvest them, which helped the growth. We also had money to buy so we bought shares and rode out the correction. In the time since our Yield on Investment has grown considerably so we are earning more on what we’ve invested. People say “To get $40k Income you need $1Mil invested”. Well that’s only if one invested $1Mil today, but if one can buy during dips and reinvest the dividends you can increase your yield on invested dollars and get the $40k with less.
            As for gains, I sold stocks I wanted to get rid of or that were not preforming as I hoped and re-invested in the ones I already owned. Now I’m down to the ones I plan to sit on and watch the income to continue to grow.

            Reply
          2. Mike: Back early 2000’s we had about half or more of our money in gic’s because we had done so badly investing. They were paying 4% to 5% so we were happy. However when I found DG Investing I realized that gic’s and bonds do not grow their income and the value of the money decreases because of inflation. Because of 2008/2009 we saw how the gov’t reacted and cut interest rates to zero. Thankfully by that time we had cashed in all our gic’s and invested in DG stocks (though not all were winners back then).
            GIC’s and bonds may be useful for savings or short term holdings, but I’d never have my investments in either. Maybe for those who need to sell capital for expenses and must rely on the market staying high, bonds are a safety net, thankfully we do not.

            Reply
  6. re: Dividend Guy/Rob Carrick

    As semi-non-related point, DG quotes the Boomer&Echo/Robb Engen article: “…I own more than 10,000 stocks from around the globe so if one stock, one industry, or even one country is having a bad month I’d barely notice.”

    A couple of things very wrong with this statement.
    1) He does NOT own “more than 10,000 stocks” — he doesn’t even own 1 of them. What he owns are ETF units. Yes, in theory those units are redeemable for those stocks held within the ETF; however, for redemption one must hold a minimum amount of units, usually 50,000. In reality and practice, unless Mr. Engen’s somehow ends up with a couple million dollars+ sitting in each ETF, he won’t be able to redeem his units for the underlaying securities. Returning us to what he actually owns — ETF units.

    2) And this: “…if one stock, one industry, or even one country is having a bad month I’d barely notice.” True, but it also works the other way, Robb. If one stock, one industry, or even one country is having an incredible month/year/decade you’ll barely notice. Besides, ETF weightings are so watered down that only a mere handful of those 10,000 stocks will have the power to move the ETF, in either direction. The topic has been much researched and studied and debated — holding all those extra stocks don’t really add any value of any type.

    As Robb pushes himself as a financial advisor, it is very unnerving to think he might be passing his misunderstanding onto his customers, thus perpetuating the environment of financial illiteracy.

    Reply
  7. I was gonna stay on the sidelines for this one. But when Lloyd said:

    “I don’t look at benchmarks as they are not relevant to me. I don’t compare my portfolio to index funds because it does not matter to me. I don’t need to earn the most I can earn. I’ve got enough and I’m basically done chasing increased earnings. And probably most of all is that I don’t think people should look at my process as being any better than anything else out there. IOW, my plan fits me.”

    I had to jump in! ***** Lloyd – I think we have something in common! 🙂

    Reply
  8. Okay, that makes sense SST. I guess one point a lot of people seem to not think of is that comparisons are only helpful if they compare the exact same item(s) (or in this case strategy). Given that not one of us will be exactly the same, comparing is a mugs game. I don’t compare myself to others because I KNOW they are not the same. Even people of very similar situations can have significant differences. I don’t look at benchmarks as they are not relevant to me. I don’t compare my portfolio to index funds because it does not matter to me. I don’t need to earn the most I can earn. I’ve got enough and I’m basically done chasing increased earnings. And probably most of all is that I don’t think people should look at my process as being any better than anything else out there. IOW, my plan fits me.

    Reply
  9. All valid comments, and my fault for not being even more specific with mine.

    As Dividend Guy/Mike said at the top, “I once met a client who didn’t need more than 2% investment return to achieve his financial plan”…so he utilized a strategy which would fulfill that specific need. And that’s how it should be — always.

    The error in all these comparisons is that they all compare returns (aka money), with almost none of them addressing risk etc. If you are going to mostly compare money then you need to include ALL financial/investment strategies…which leads to the conclusion that the one returning the most money is the most successful. It’s a fools game any other way, and one not worth playing.

    Reply
    1. “…the one returning the most money is the most successful.”

      This is what I don’t like. Bloggers, financial media, etc. all saying if you don’t invest in low-cost ETFs for total return, you are a fool and you are shamed. The smugness of the blogger community and/or media that says this is the only way to save, invest, etc. drives me a bit nuts. Don’t get me wrong, I own some ETFs and I have partnerships with companies that sell ETFs – but I would be the last person to say this is the only way to invest. It’s a good one – just not the only way.

      If our friend Lloyd has done well, and he has, through a variety of life choices – who am I to argue with that? As long as his plan “fits him” – that’s all that matters.

      Reply
  10. “The best strategy/tactic is the one which returns the most money, period. ”

    I like reading your stuff SST but I disagree with this assertion. Speaking for myself, I know the constant worrying about a high risk would kill me. I am more than willing to accept lower returns for safety so I recently pulled $400K out of the market and am building GIC ladders. Investing/saving is personal and there is no one size fits all financial plan.

    Reply
    1. Lloyd….Why the GIC ladders? As you know – these are taxed as income and yearly inflation eats into what you would make. Can you expect more than a 4% return yearly? Why not XPF & CPD and make much more and use the Div tax credit?

      Reply
      1. They are in our RRSPs. They are also with our local credit union so it is a community thing. I did this because we had the vast majority of our portfolio in the market. (and we still have a substantial portion in the market) With this set up, between our DB pensions,OAS and these GIC ladders we could still easily get by. In all likelihood, barring any kind of medical catastrophe, a lot of our assets will end being in charitable trust funds of some kind. We have enough.

        Reply
  11. re: dividend vs etf vs et al investing
    When it comes to money, bottom line is, it’s all about the money. The best strategy/tactic is the one which returns the most money, period. Magnitude over frequency, in other words, it’s not the frequency of winning but the magnitude of the win that matters. Two examples would be the early big winning bets made by both Derek Foster and Michael James which heavily padded their investment funds.

    History has shown that a pure capital gains investment strategy monstrously outstrips the returns of any dividend or indexing strategy. However, individuals are inherently lazy and driven by loss aversion, so they aren’t looking to get the most money…kind of. They want the most money they can get with the least amount of work and the least amount of risk. Reduction of work + reduction of risk = reduction of returns.

    Each strategy employs a different model which will render that strategy superior if its model is overlaid on a completely different strategy.

    Reply
    1. At the end of the day, as long as you are meeting your goals – to be blunt – I don’t really care what you do or how you invest – or other.

      Nobody has the same life, same goals, same desires, same wants or same needs. If folks feel low-cost ETFs are the best plan for them – go for it. If folks feel dealing in crytos is the best plan for them – go for it. Everything in life has risks and trade-offs.

      Derek’s plan and luck and life, might not work for others. Same with Michael’s. Same with me. Same for you.

      Over the years, I’ve grown tired (very tired) of the zealots who believe “their way is the best way”. Only in hindsight can you say things worked out or didn’t and you cannot possibly predict the future (good or bad) with any accuracy.

      Plan the life you want, live the life you want, and don’t hurt anyone (therefore respect others) in the process. I’m not sure things have to be more difficult 🙂

      Just me maybe. Maybe you too!

      Reply
  12. re: Canadians are content with their financial advisors
    The sample size was 368. Complete junk.
    Digging further….the poll was conducted by Environics Research for Pointman News Creation (a PR firm). So, Hennick Wealth Management paid Pointman News Creation for PR services and they paid Environics Research to create a poll. If there was ever a BS poll with BS results, this would be it. HWM wanted this to look like “news” instead of just another slimeball ad. Then again, should we expect anything less (more?) from the financial sector?

    It’s also a great lesson in…well, many things. As my pal Shane Parrish @Farnam Street writes:
    Most of what you’re going to read today is pointless.
    https://medium.com/personal-growth/most-of-what-youre-going-to-read-today-is-pointless-4b774acff368

    Reply
    1. “The point is, most of what you read online today is pointless. It’s not important to your life. It’s not going to help you make better decisions. It’s not going to help you understand the world. It’s not going to help you develop deep and meaningful connections with the people around you. The only thing it’s really doing is altering your mood and perhaps your behavior.”

      Well said. Read for entertainment these days, not really for education or knowledge.

      Reply
  13. Dividend Guy: Nice article but the point I find most people ignore when looking at ETF’s is their distribution record. I’ve yet to find one that grows their dividend consistently year after year, as do a select of solid DG stocks.

    Reply
  14. I won’t be surprise people with financial advisers are satisfied right now with such a long and strong bull market. Let’s wait and see how that number change when market eventually crushed.

    Reply
    1. Or, let’s see how the numbers change if the firm actually has a decent sample size. Let’s poll 100,000 people. I can almost guarantee the satisfaction rate will be <97%.

      Reply
  15. Thx for the mention Mark!
    I agree with you, the key is to have a plan and follow it. There is no point of switching from one strategy to another. I once met a client who didn’t need more than 2% investment return to achieve his financial plan. I asked him why would he bothered taking volatility and risk in his portfolio? In his case, sleeping well at night was definitely worth a lot more than showing a 5% avg return in 10 years.
    Enjoy your weekend!
    Mike.

    Reply
    1. “There is no point of switching from one strategy to another.”

      A case could be made that when first starting out, an index fund may be a viable option until sufficient assets are accumulated to be able to afford enough individual stocks to be sufficiently diversified. Another case could be made that a simplification process, moving from individual stocks to an index fund, is not necessarily a bad move for some instances. I can see me switching to all e-series when I get too old.

      Reply
      1. Over time in retirement we trimmed the number of stocks we owned to just those we felt were our core holdings (down to 13), ones we’re happy to hold and pretty much ignore. Certainly we record the dividends and watch for the increases, but as long as that happens we’re happy.

        Reply
        1. Hard to believe you only own 13 stocks and are comfortable with that. I get the idea of concentration to make good money but that would make me nervous. Just me though – kudos to you if you can stomach that!

          Reply
          1. Mark you know are holdings and that we’re in four sectors. Banks, Comm, Utl & Pipeline. I feel more secure with these than I did when we held 30+ stocks. Back then we diversified and often chased yield. Like SST noted, others may make greater total gains but I’m happy with the slow & steady Income growth and these have a long, long record of doing just that. I also know that if we’d held only these since 1999 rather then all the others we did and sold, our total worth and income would be much higher than it is now.

            Reply
            1. Yes, I do know. I guess what I’m saying is, I couldn’t do that yet. There is comfort, for me, in owning more CDN dividend paying stocks (30) + a few hundred shares in VYM and some growing shares in VXUS – for diversification. I’m happy that our dividend/distribution income is growing, for sure, but it’s a slow process like you said and with 100% equities right now I feel it’s a good reason to be diversified.

              I recall you own only CDN banks, telcos, major pipelines and maybe some Brookfield. I own the same companies but I also own REITs (about 7 of them).

              Unless those dividends get cut, I will continue to own all those companies for the foreseeable future. I still own CPG and SU in a small capital loss position but holding on for each for a long-term oil recovery and/or to offset capital gains eventually. I think my ACB for SU is close to $48.

              Reply
      2. I can see myself owning more U.S. indexed funds as I get older, more VTI, VYM, other but as for Canadian stocks – I need to be convinced the returns of the top-20 or 30 stocks in Canada will return less than all other stocks combined. Until that happens, I’m owning those companies directly for income and growth. >9% over the last 5-years. Pretty good I think but maybe I’ve been lucky.

        Reply

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