Mid March Contagion, 2023

 

It's mid March and being St. Patrick's Day yesterday, there wasn't much "green" in the Market's close for last week. Down and a sea of red.

Being a long term investor, I don't get all the panic and selling when stuff hits the fan. They call it contagion or contagious fear/selling I guess. Some banks in the US ran into trouble and that's all over the investing news as well as Credit Suisse across the Big Pond, which caused outright global fear for a day until the following day when it was announced it had billions in a line of credit to tap into.

When stock prices are down I become more interested than usual, looking for bargains. Normally, the lower prices don't last long before the Market place gets accustomed to the latest short term fallout and the tide changes to more buying than selling.

Canadian Banks come to mind like CIBC (CM) and Bank of Nova Scotia (BNS) with National Bank of Canada (NA) being popular these days. ETF's that hold these banks are lower in price as well ... for now.

Meanwhile ... Bitcoin (BTC) and Ether (ETH) continue to climb in price. Bewildering for sure with all the downfalls in the Crypto market these past months. Going opposite to the stock market. As always ... very volatile when it comes to risk.

I assume the start of that climb was due to a couple of the largest "Stablecoins" losing their peg ... or equal to 1 US dollar for every USDC, for example. Where to transfer coins in a panic? Depending on the Exchanger ... not many options for some but to trade to BTC and/or Ether. That was probably a flurry of millions to billions of dollars worth of transactions overall.

However, USDC with Circle and Coinbase behind it ... is back to normal at this time. 1 USDC = 1 USD, give or take a few cents.

Bitcoin holders that were patient and didn't sell with the collapse of some big outfits and more US rules introduced, costing a few US Exchangers big bucks in fines to conform to the new regulations ... should be pleased with the boost in price lately. Sell some while it's up or continue to hold ? comes to mind I'm sure.

Pipelines and Banks in March, 2023

 

I find it interesting and keeps me motivated when reading up on various sources of information and ideas/plans from Bloggers that have already achieved their investment goals, working towards them or just remain on a never-ending continual build of a portfolio 

I'll most likely be the latter where it will be a source of cash when needed or reinvestment funds to continue the "build" on dividend paying stocks and ETF's.

Individual stocks once bought have no management fees unlike ETF's ... but, with all the competition for investor's cash, many have very low management fees these days and I've seen a couple recently with none. Those that provide cash distributions with growth over the months and years are popular I'm sure. BlackRock and Vanguard and many others out there come to mind.

One of my holdings, PPL, or Pembina Pipelines (BTSX) has moved from monthly cash distributions to quarterly starting this month with an ex-dividend date of March 14th and a current yield of 5.61%

My focus will then be on the Canadian banks towards the 2nd half of March, with CIBC (CM) and National Bank (NA) having ex-dividend dates. 

Meanwhile, with the long term stocks where I like with a decent history, there's always something new that comes out.

Royal Bank of Canada (RY) recently launched a covered call ETF ("covered calls" usually comes with higher distributions) called RBC Canadian Dividend Covered Call ETF with ticker: RCDC.

An impressive list of 75 holdings by "weight" including BTSX stocks and many in the TSX Top 60 by dividend yield. The current yield is over 6% and pays monthly distributions. 

Recently, I was reading Tom Connolly's March updates on DividendGrowth.ca and he provided a link to a "Do it Yourself" investor with 36 years of experience and a 2 part interview on Bob's Tawcan Blog who's 100% focused on Canadian stocks and has the Tax impact factored in. 

https://www.tawcan.com/living-off-dividends-tax-free/

Any DIY investor living in a country can apply this with research and beefing up on that countries tax laws on how it impacts today and into retirement. The US, Europe and Asia for example have top quality dividend stocks. Only a Google search away but deeper research and the risk factor is always recommended

In that interview, the investor mentions the BTSX, which I also follow : 

High quality stocks are selected – conservative large cap stocks – most often dividend aristocrats – minimum 2% yield with the odd exception for superior growth stocks or those with growth potential. Great focus is placed on buying dividend aristocrats and stocks in the TSX Composite 60 Index with a nod toward following the Beat the TSX strategy. 

Tawcan: Funny B mentioned the BTSX strategy. Check out Matt, the brain behind Beating the TSX strategy, and his family’s amazing story about travelling the world with 4 kids.