Financials in May, 2023

 

Feds are slowly taming the wild west days of Crypto but first, what's happening in May with stocks and my interest in it.

Yesterday I bought more Enbridge (ENB) stock with pipelines and building storage facilities for oil and gas producers in Canada and the US. Current yield is 6.62%

With Financials, there are some personal great picks with the insurance/financial sector in Canada. 

Looking at the big picture, there continues to be some trouble with mid size banks in the US, although the Feds step in and take over when they falter and lately, sell them off to the bigger banks in the US, which in turn keep them running and manage them the way they want.

With constant news about this, it casts a shadow at times on some of the Big Banks in Canada that have exposure and branches in the US like TD and Royal Bank. That tends to filter into the financial sector throughout Canada.

Being a long term investor it provides for more bargain hunting where some financials are down from their yearly highs knowing they will continue to bring in their billions.

Manulife Financial (MFC), Great-West Life (GWO) and Sunlife (SLF) are on my radar to further buy in May before their ex-dividend dates.

In Canada, a Crypto outfit has to register with the SEC to operate or they will get warnings to do so and eventually booted if they don't. Among others, both Coinbase and Kraken are in that process and both are high profile exchanges/wallet holders in the US. 

A recent Blog article about Canada registration from Kraken (March 30/2023)

In the US, the Feds are hot on the heals of those not registered with them and scrutinising the coins they hold calling many securities although no official guideline for crypto coins has been drafted before but that's about to change as they are working on that currently and they will be sending letters to Exchanges holding them to comply or be fined

Companies like Coinbase and Kraken I'm sure find this all an impact on how they make extra money on products such as "swapping coin" fees, Staking, etc. on top of transfer and trading fees, etc.

There will be a lot more news as this unfolds in the US. Meanwhile in Canada, it's pretty cut and dry ... register and with your products or move on. The largest exchange in the world, Binance figured they were above all this registering stuff and either hit the road or go to court. They left.

Meanwhile, my only interest now is with the BTC and ETH I hold and follow what's happening with their prices these days. I used to be in many other coins and stable coins but with all that's going on I mentioned above ... transferred it all to BTC, with options to cash out to a bank.

Stocks or ETFs for Cash?

 

With April 2023 coming to a close, I read a couple interesting posts about which is better when seeking dividend yield over the long run.

Before I get into that ... why bother with the accumulation of dividend cash? Investors use it to cover personal expenses, trips, tap into the cash when needed or buy more stock for dividend growth. 

Last week I read Globe and Mail's Rob Carrick's article about owning individual stocks over ETF's. 

Recently, Matt from Dividend Strategy weighed in on that debate which I'm sure is on a lot of DIY investor's minds, specially those just starting out.

BTSX vs Dividend ETFs

An individual's choice for sure. With a purchase into an ETF like Royal Bank's RCDC, your spread out into a number of top companies and banks by weight but ... your paying management fees and more than likely the monthly cash distributions will remain either steady or fluctuate like a lot of Blackrock's ETFs.

Some folks like the same steady cash distribution coming in so they know what they are getting without guess work or looking it up when distributions are declared.

When buying top companies and Banks individually and doing some research while keeping current on their sites and news, there's no management fees and dividends tend to grow each year or ... remain steady. 

There are commission free sites out there where buying stocks comes with no charge like TD's EasyTrade and Wealthsimple Trade (fractional stock 'buys' an option) in Canada.

I prefer dividend growth and the BTSX portfolio provides this with an average current yield of 5.75% over the 10 stocks. The only company I'm not into is AQN in the current BTSX portfolio. 

It's not 100% fool proof however and nothing in investing should be considered so. Every once in awhile, a company will stumble and make the decision to lower their dividends for the long or short term until their 'Books" stabilise and generate more cash flow in the future.

Like the football 2000 movie " The Replacements" starring Keanu Reeves and Gene Hackman there are plenty of replacements to choose from to make a winning combination and I own several like Sunlife Financial (SLF) and Telus (T) when it comes to accumulating dividend cash.