September 2014 Investment Update

Rough Month

Snapshots of Time

My latest book. Maybe if we actually had one of these devices we could make better investment decisions.

September Results

All markets were down for the month of September, with the Canadian market dropping over 4%.  The first day of October continued the downtrend making me wonder if the long awaited correction is upon us.  Apparently the Russell index is already in correction territory.

 

Sept YTD
BB RRSP -2.76% 9.59%
BB non registered 1.87% 13.93%
TSX -4.26% 9.83%
Dow Jones -0.32% 2.81%
S&P -1.55% 6.70%

My RRSP account, which is mostly Canadian, performed slightly better than the Canadian market, but my non-registered stocks (the ones I actively manage and report on regularly) outperformed all the markets again, both for the month and YTD.  As many of my stocks are US, my portfolio benefited from the strengthening US dollar. Regardless, 10 to 14% return for the first 9 months of the year feels pretty good.  It does allow for some slippage if the markets fall back.  Also a lower market creates buying opportunities, which is what I have been waiting for.  I will probably do my fall buying later in the month.

Reinforcing the Strategy

See this article from CNN.  If you are following the strategy I use, you are probably doing all of these recommended actions: (note: the videos are based on US 401k).

http://money.cnn.com/2014/09/30/investing/investing-secrets-wealthy/index.html?hpt=hp_t4

 

Purchase cycle

Here is an interesting article on the comparison between dollar cost averaging and lump sum investing. Thanks to Peter in Doha for bringing this forward.

Dollar cost averaging

http://www.theglobeandmail.com/globe-investor/investment-ideas/lump-sum-investing-vs-dollar-cost-averaging-the-nitty-gritty/article20707395/?utm_medium=Newsletter&utm_source=Personal%20Finance%20Reader&utm_type=text&utm_content=PersonalFinanceReader&utm_campaign=119988228

Checking the model

In my last two posts I put out a list of suggested stocks in order of timing. As we all know, no one effectively times the market over time, but we all still try.  I try to use a model that will show me preferences for buying one stock vs another at a point in time.  Earlier this year I put out a post showing how that model had worked out given the time frame of December 15, 2013 to May 8, 2014.

“Checking Recommendations”

Here is an update on the performance of that list of stocks.  As you see, the top ten on the list outperformed the market considerably during that time, while the bottom five on the list were below market. This tells me that in the absence of anything better, the model seems to provide results. I have used the period December 15 to September 26.

Stock top 10 15-Dec-13 26-Sep-14 % change
TOT 56.53 64.71 14.47%
LMT 140.05 181.58 29.65%
COP 69.43 78.12 12.52%
OXY 91.11 98.35 7.95%
INTC 24.29 34.26 41.05%
CVX 119.9 121.47 1.31%
GD 90.26 127.7 41.48%
IBM 172.8 190.06 9.99%
MCD 94.44 94.7 0.28%
T 33.6 35.28 5.00%
Average 16.37%
Index ETF (S&P and DJIA)
SPY 178.11 197.9 11.11%
DIA 157.65 170.7 8.28%
bottom 5
KMB 104.03 107.85 3.67%
MRK 48.38 59.39 22.76%
HON 87.37 93.3 6.79%
CL 64.04 65.7 2.59%
BMY 50.73 51.1 0.73%
Average 7.31%

 

Suggested Stocks as of Oct 1 (A++, 2.5% yield, dividend growth)

I have tried to rank these in order of priority to purchase now.  There is considerable overlap with ranking from earlier in September.

Ticker Dividend Yield
TOT 5.03%
CSCO 3.04%
COP 3.74%
CVX 3.52%
RDSB 4.71%
DE 2.90%
LMT 3.30%
BAX 2.88%
XOM 2.89%
MSFT 2.67%
PEG 3.94%
VZ 4.42%
UL 3.60%
T 5.22%
SJM 2.60%
PFE 3.50%
KMB 3.12%
MCD 3.59%
TXN 2.81%
MRK 2.96%
ACN 2.57%
WMT 2.51%
INTC 2.63%
JNJ 2.61%
DD 2.59%
KO 2.89%
EMR 2.73%
BMY 2.82%
PG 3.04%
PEP 2.81%
NSRGY 3.29%
NVS 2.96%

  Happy Investing

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About borgford

Feel free to contact me with questions: brianborgford@hotmail.com
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2 Responses to September 2014 Investment Update

  1. Peter M says:

    Hi Brian. I notice a couple of Canadian banking stocks I own, CIBC (CM) and Royal Bank (RY), aren’t on your list. Should I be worried?
    Thanks always for your info – TOT is currently taking a dip along with many others so I just put in a buy order for a couple of hundred of those – ’tis the season.

  2. borgford says:

    Hi Peter. Good to hear from you. Hope all is well there. My recent Canadian list was for fall buying. I don’t think those two are as good to buy now as the others. But they are still great stocks to own. Don’t sell them. I think TOT is a great long term buy. With the dropping market this should be a good time to buy. I’m looking at around the 20th.

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