Building a Portfolio, Mid December 2024

 

I recently read an article on the Globe and Mail about having too many stocks in a Portfolio but it's a preference to whatever sector mix and ranking an investor prefers and works for him or her.

I currently have 20 dividend paying stocks and 6 ETFs/Funds and always looking at other stocks for dividend and hopefully, capital growth with some being "bond like" with a steady monthly dividend payment. This snippet from that article kind of fits the way I approach the Markets.

Just as with building a house, a portfolio is not built in a day. It must be attended to with shares carefully added and nurtured. It is wise to look it over quarterly and see what variations should be made, if any. Avoid haste. This is indeed a long-term exercise where the best results are relatively slow and sure.

My most concentrated sectors are Financial, followed by Energy where I further bought Canadian Natural Resources, CNQ with a 7.4% dividend increase and Pembina Pipeline, PPL this month. The oil and growing natural gas buildup are behind these stocks, making their money here in Canada, by international export, shipping and providing resources for the growing electricity demand. Data centres, with some in the planning stages to build huge complexes will need an enormous amount of power ... probably a lot of alternative energy sources involved as well.

                                        From Forbes article about AI, Data Centers and Cooling

SOBO, South Bow is on my radar for more buying with about a 8% yield and an ex-dividend date of New Year's Eve. SOBO has gained nearly 23% since it's spinoff from TRP, TC Energy but slowed up over the last month.

A utility I got into last quarter is Capital Power, CPX with a current 4.27% yield and increased it's dividend by 6% for September, 2024. A popular stock with it's price climbing by 60% this year. Caution here where CPX is currently over-valued. The ex-dividend date is on the 31st of December.  

Concluding for today and wishing you a Merry Christmas, I like this comparison from a retired lady living in Ontario and author of the Our Life Financial newsletter I receive monthly ... keeping in mind the "boring companies" also pay dividends.

A lot of people get caught up in the hype and the media does a very good job at promoting stocks that are flashy, encouraging young (and old) investors to invest in the high flyers. I mean look at the S&P 500 this year thanks to the Magnificent 7 (namely Nvidia). They have had a terrific run and perhaps will for the foreseeable future. What people don’t take time to consider, however, is the regular, every day companies that can do just as well.

Let’s look at a few below, and I’ll start with the U.S. tech that has received a lot of coverage this year:

YTD Total Return (Jan 1 - Nov 29th):

Nvidia 187.07%

META 66.28%

Tesla 38.94%

Amazon 38.66%

Apple 28.38%

Google 22.45%

Microsoft 15.01%

Not bad at all, with Nvidia clearly having a fantastic year.

But how do those compare with some of the boring companies up here in the North? Take a look:

CES Solutions 183.43%

Aecon 121.84%

Manulife 60.38%

Extendicare 54.04%

Peyto Exploration 48.17%

Royal Bank 35.69%

Arc Resources 34.35%

Enbridge 32.82%

Bank of Nova Scotia 32.78%

There are countless others that could be added to both the U.S. and Canadian lists, the point is, many people focus only on the stocks that are continually being pumped by the media but there are so many others that if purchased at the right time can do remarkably well for you. It’s finding the stocks that are downtrodden, that is the key.