April 2015 update – finally written from Canadian soil.
Read about our past travels.
April 2015 Results
April was a much better month all round. If it weren’t for the two bad days at the end of the month it might have even been terrific. The TSX was up over 2% bringing the year-to-date to over 4%. The Dow finally broke out of the red for the year with a small gain and the S&P was up almost a full point bringing the year-to-date to over 1% gain.
My results were a mixed bag. All my stocks performed well in absolute dollars with my Canadian stocks up almost 3% and the US stocks up almost a full percent. However the Canadian dollar has strengthened against the US dollar by 4 1/2 percent erasing some of my previous artificial gains. As a result, my portfolio expressed in Canadian dollars actually dropped by over one percent but I still have nearly a 5 % gain on the year.
Again, in spite of extensive travel (Panama, China, Thailand – as well as paying in advance for Iceland) and expenditures, my net worth continues to grow – albeit at a slow pace this month. I am still well ahead of my net worth on my retirement date, meaning our spending is not eating at capital yet.
Plans for May
Remember the saying “Sell in May”. I will use this month to examine my portfolio to see if there are any stocks getting “tired” and need to be culled. I have been looking at DD and as you will see below, COP may be on the chopping block. I likely won’t do any buying yet, although the new Canadian TFSA rules allow for some more funds to be put in, so I may make a couple of small purchases. I will keep you posted.
Experts – again and again
Following is a report by an “expert” on what to expect from financial markets in the next few months. I’m not much for predicting, but I’m willing to bet he is wrong on most of his predictions as are most “experts”,
Click HERE to see the website.
What To Expect In Q2 2015?
Our Global Investment Strategy service recently published their Strategy Outlook for Q2 2015.
The quarterly report highlights the following points:
- Global growth should remain broadly unchanged over the balance of the year, as stronger activity in most developed markets offsets a worsening outlook in emerging markets.
- A modestly pro-risk stance is warranted. Remain overweight global equities and corporate credit, neutral on government bonds, and underweight cash.
- Global bond yields will remain subdued as reflationary central bank policy takes center stage. The 10-year Treasury yield is heading to 1.5%.
- Overweight euro area and Japanese equities. Reduce exposure to the U.S. on valuation concerns and margin pressures. An overall underweight in EM equities is warranted, but China deserves to be bought.
- The commodity supercycle is over. There is little reason for oil or most metals to rebound anytime soon.
The dollar bull market is entering its final innings. While the greenback should be able to extend its gains against the commodity currencies and to a lesser extent, the yen, the pound, and the RMB, it will struggle to rise much further against the euro.
Clients interested in reading the full Report can access it here: Strategy Outlook Second
This month’s suggested stocks
A++, 2% dividend, 10 year dividend growth
As noted earlier, COP has dropped from this list. As A+ rather than A++ it is still ranked as a good stock, but if I am to maintain my discipline, I will need to look seriously at selling. Remember “Sell in May”.
Here is what ValueLine says about COP.
These shares are ranked to mirror the market averages in the coming year. All said, even with the capital budget cuts, we expect production to increase about 2% – 3% in 2015. Given the large drop in oil prices, asset impairment charges are likely. Thus, these shares are best suited for speculative accounts until the severity of charges are known
|Company||Ticker||Financial Strength||Dividend Yield||Dividend Growth 10-Year|
|Automatic Data Proc.||ADP||A++||2.40||13.50|
|Baxter Int’l Inc.||BAX||A++||2.91||10.00|
|Deere & Co.||DE||A++||2.71||15.50|
|Exxon Mobil Corp.||XOM||A++||3.26||9.50|
|Illinois Tool Works||ITW||A++||2.05||12.00|
|Int’l Business Mach.||IBM||A++||2.70||19.50|
|Johnson & Johnson||JNJ||A++||2.99||11.50|
|Merck & Co.||MRK||A++||3.13||1.50|
|Novartis AG ADR||NVS||A++||2.67||15.50|
|Procter & Gamble||PG||A++||3.27||10.50|
|Public Serv. Enterprise||PEG||A++||3.72||3.00|
|Royal Dutch Shell ‘B’||RDSB||A++||5.90||6.50|
|Unilever PLC ADR||UL||A++||3.19||8.00|