August 2014 Investment Update

 

Yesterday and Today

Sigurdson Statue

On the left, my grandfather (circled) in 1923. On the right, me and my cousins (descendants of my grandfather) in 2014. The same setting, a statue in front of the Manitoba Legislature, which my grandfather built in 1915

Summer of historical discovery.  One of my next writing projects will be a narrative biography of my grandfather.  I have spent the summer gathering documents, pictures and history of his life.  My retirement planning has provided me  with the time and money to travel to gather research for my many projects.

August Performance

The summer months are over and the expected market doldrums never happened.  Quite the opposite.  Markets rose in August about 1% plus or minus, depending on the index.  On a year to date basis markets are up for the first eight months by 3% (DJIA) to almost 15% (TSX), making for another great year to be in the markets.  There is still no correction in sight, but it’s bound to happen at some time.  The recent growth certainly will make any downturn easier to absorb.

Here is a summary of my results compared to various indexes:

Note: my last report was generated using July 27 results, so I have made my comparisons from that date, rather than July 31.

August YTD
Brian RRSP 2.05% 12.71%
Brian non-registered 1.17% 11.83%
TSX 1.10% 14.71%
Dow Jones 0.81% 3.15%
S&P 500 1.27% 8.39%

My RRSP account was boosted by the surprise takeover of Tim Horton’s by Burger King.  I happened to hold shares in Tim’s in my Registered account and the rumoured takeover resulted in a one day jump of 25%.  There may be more upside, but I like to bank my windfall gains as quickly as possible, so I sold the stock to take the gain rather than risk losing it on some knee-jerk political reaction.

The reason my RRSP accounts, which are almost 100% Canadian, have not kept pace with the TSX is that, for safety reasons, I maintain a 30% weighting in fixed income (bonds, etc) which have a much lower, but more secure, yield.

This year the Canadian market has been outperforming its American counterparts.  Given my heavy weighting on Canadian stocks, I have been outperforming the US markets, aided in part by the devalued Canadian dollar.  Now two months into retirement (with no employment income), it is nice to see our pot growing in spite of excessive spending in getting set up with a new home and almost a month of travelling.

Fall Buying

I have set aside cash for more purchases in the fall, expecting some kind of a pull back in the market.  I am reluctant to start a buying program until I see some kind of a lull.  That being said, I still think there are some bargains out there (eg KO) for the long term, even if there isn’t a major pull back.  In the next number of weeks I hope to publish a list of stocks in order of preference for current buying.

 Suggested Stocks (A++, > 2% dividend yield, dividend growth)

Note that the dividend growth is only one year, as ValueLine’s new system does not summarize by 10 year dividend growth anymore.  Each stock would have to be evaluated for its long term dividend growth.

Ticker Dividend 1 Yr Growth Rate Dividend Yield Financial Strength Rating
ACN 20.00% 2.30% A++
ADP 9.50% 2.30% A++
BA 10.00% 2.30% A++
BAX 29.00% 2.78% A++
BMY 3.00% 2.85% A++
CL 9.00% 2.23% A++
CSCO 121.50% 3.06% A++
CVX 11.00% 3.32% A++
DD 4.50% 2.84% A++
DE 11.00% 2.86% A++
EMR 3.50% 2.68% A++
GD 10.00% 2.01% A++
HD 34.50% 2.03% A++
IBM 12.00% 2.29% A++
INTC 3.50% 2.60% A++
JNJ 8.00% 2.72% A++
KMB 9.50% 3.11% A++
KO 10.00% 2.93% A++
LMT 15.00% 3.06% A++
MCD 8.50% 3.44% A++
MMM 7.50% 2.38% A++
MSFT 26.00% 2.50% A++
NOC 10.50% 2.21% A++
PEP 5.50% 2.83% A++
PFE 9.00% 3.54% A++
PG 7.00% 3.10% A++
QCOM 29.00% 2.20% A++
RDSA 4.00% 4.63% A++
RTN 10.00% 2.52% A++
SJM 11.50% 2.50% A++
TOT 5.00% 4.98% A++
TRV 9.50% 2.33% A++
TXN 48.50% 2.50% A++
UL 13.50% 3.44% A++
UTX 8.00% 2.16% A++
VZ 3.00% 4.29% A++
WMT 18.00% 2.53% A++
WSM 41.00% 2.00% A++
XOM 13.00% 2.77% A++

 

 

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About borgford

Feel free to contact me with questions: brianborgford@hotmail.com
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One Response to August 2014 Investment Update

  1. Peter M says:

    Here’s a related article. Really just saying more of the same. Although with good reason. It needs to be said. But your value-added is real, practical, current example stocks. You’re not just talking the talk, you’re walking the walk. Thanks!
    http://www.thestar.com/business/personal_finance/2014/09/03/how_to_earn_a_10_rate_of_return_on_your_investments.html

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