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.
|BB non registered||1.87%||13.93%|
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).
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.
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.
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|
|Index ETF (S&P and DJIA)|
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.