May Travels
In May we travelled to Hangzhou, China and Kuala Lumpur, Malaysia
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May Results
All markets were up for the month, in spite of a small drop late in the month. The Canadian market gained just under 1% for a YTD total of over 8%. The US markets are back in the black – over 2% for the year-to-date. The Canadian dollar lost over 4% against the US dollar in May, but is still above where it was at the end of 2015.
| May | YTD | |
| TSX | 0.82% | 8.12% |
| DJIA | 0.08% | 2.08% |
| S&P | 1.53% | 2.59% |
| BB CDN | 2.09% | 9.84% |
| BB US | 1.04% | 7.46% |
| BB Total (no FX) | 1.77% | 9.11% |
| BB Total (incl FX) | 3.23% | 6.64% |
My US portfolio gained over 1% in May for a YTD of almost 7.5%. May Canadian portfolio was up 2% for a YTD gain of almost 10%. Factoring in the effect of the US dollar, my overall portfolio was up over 3% for May and 6.64% YTD.
We are now five months into the year and the markets have recovered nicely from the early year slide. There is no guarantee that this trend will continue for the year, but gains of 6% to 10% for less than half the year look pretty darned good. There would be nothing wrong with those numbers even if they represented the whole year.
My net worth continues to grow, in spite of living a pretty rich life. My investment earnings generally exceed my lifestyle choices. 2015 was my first full year of retirement and the first full year of paying Canadian taxes since 2002. I was able to manage my effective tax rate to around 16%
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Article
Click HERE for an article about stocks with an impressive record of dividend increases. Not all of them are A++ and some have dividends below my threshold, but they are all interesting picks.
Quote – Provided by Les from Calgary. Pretty much captures my thoughts on advisors:
Too many young financial advisors think the Great Depression was solved by taking Prozac.
HERE is an evaluation of the various on line brokers you can use to manage your investments on your own, as I am doing. Each of the banks have their own related firms and there are a few independents. They all will do the job, but experts have looked at various functions and features. I use HSBC Investdirect which is given one of the lower ratings, but I am more than satisfied with it. I’m sure any one you pick will satisfy your needs. Often the simplest is to use the brokerage firm that is aligned with your main bank.
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Ideal US portfolio
Looking for a top 10 in US stocks, I would start with the Dow Jones 30 industrials to get a feel for what a diversified portfolio would look like. The DJIA represents 7 broad industry categories. I would select one or two from each of these sectors to round out my top 10 stocks. For me they must have a Valueline rating of A++, a good dividend and a history of dividend growth. Any the stocks on my suggested list are fine, but for this exercise I have only selected DJIA stocks.
Basic Materials Sector
Oil/Energy are the dominant stocks in this sector. I would opt for CVX (Chevron).
Consumer Goods Sector
I suggest KO (Coca Cola) and PG (Proctor and Gamble) for two stocks from this sector.
Financial Sector
I am not a big fan of US financials but one that does surface is TRV (Travellers Cos.).
Health Care Sector
I would pick two from this sector – JNJ (Johnson and Johnson) and MRK (Merk)
Industrial Goods Sector
Pick BA (Boeing)
Services Sector
MCD (McDonalds) jumps out as the best, but may be currently overvalued.
Technology Sector
I would select two stocks – VZ (Verizon) and IBM (Int’l Business Machines)
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Suggested Stocks (Note: some stocks end up not on the monthly screening for some reason, eg CSCO)
US
| Company | Ticker | Financial Strength | Dividend Yield | Dividend Growth 10-Year | Current PE Ratio |
| 3M Company | MMM | A++ | 2.63 | 8.5 | 20.11 |
| AT&T Inc. | T | A++ | 4.97 | 3.5 | 13.63 |
| Automatic Data Proc. | ADP | A++ | 2.59 | 13 | 25.87 |
| Boeing | BA | A++ | 3.47 | 12.5 | 14.53 |
| Bristol-Myers Squibb | BMY | A++ | 2.15 | 2.5 | 29.47 |
| Cardinal Health | CAH | A++ | 2.41 | 26 | 17.1 |
| Chevron Corp. | CVX | A++ | 4.22 | 10 | 84.58 |
| Coca-Cola | KO | A++ | 3.13 | 9.5 | 22.92 |
| Colgate-Palmolive | CL | A++ | 2.24 | 11 | 25.63 |
| Deere & Co. | DE | A++ | 2.99 | 15.5 | 20.07 |
| Dover Corp. | DOV | A++ | 2.52 | 9.5 | 19.62 |
| Du Pont | DD | A++ | 2.39 | 2.5 | 20.54 |
| Emerson Electric | EMR | A++ | 3.65 | 8 | 16.57 |
| Exxon Mobil Corp. | XOM | A++ | 3.34 | 9.5 | 33.89 |
| Franklin Resources | BEN | A++ | 2.11 | 15.5 | 14.47 |
| Gen’l Dynamics | GD | A++ | 2.13 | 13.5 | 14.89 |
| Grainger (W.W.) | GWW | A++ | 2.15 | 17.5 | 18.6 |
| Home Depot | HD | A++ | 2.06 | 19.5 | 21.8 |
| Honeywell Int’l | HON | A++ | 2.08 | 9.5 | 17.17 |
| Illinois Tool Works | ITW | A++ | 2.09 | 12 | 19.17 |
| Int’l Business Mach. | IBM | A++ | 3.67 | 20 | 13.55 |
| Intel Corp. | INTC | A++ | 3.3 | 17.5 | 13.4 |
| Johnson & Johnson | JNJ | A++ | 2.88 | 9.5 | 18.98 |
| Kimberly-Clark | KMB | A++ | 2.88 | 8 | 25.58 |
| Lilly (Eli) | LLY | A++ | 2.7 | 3.5 | 21.58 |
| Lockheed Martin | LMT | A++ | 2.8 | 20.5 | 20.42 |
| McDonald’s Corp. | MCD | A++ | 2.91 | 20 | 22.31 |
| Merck & Co. | MRK | A++ | 3.26 | 1.5 | 15.24 |
| Microsoft Corp. | MSFT | A++ | 2.78 | 19 | 19.29 |
| Novartis AG ADR | NVS | A++ | 3.44 | 13 | 21.09 |
| PepsiCo, Inc. | PEP | A++ | 2.95 | 11.5 | 20.63 |
| Pfizer, Inc. | PFE | A++ | 3.49 | 4.5 | 21.52 |
| Procter & Gamble | PG | A++ | 3.3 | 10 | 21.49 |
| Public Serv. Enterprise | PEG | A++ | 3.75 | 3 | 15.26 |
| Qualcomm Inc. | QCOM | A++ | 3.8 | 22.5 | 13.53 |
| Raytheon Co. | RTN | A++ | 2.25 | 11.5 | 18.5 |
| Schlumberger Ltd. | SLB | A++ | 2.57 | 15.5 | 62.3 |
| Smucker (J.M.) | SJM | A++ | 2.14 | 9.5 | 20.78 |
| Texas Instruments | TXN | A++ | 2.5 | 29.5 | 20.6 |
| Total ADR | TOT | A++ | 5.6 | 5.5 | 14.29 |
| Travelers Cos. | TRV | A++ | 2.36 | 8 | 11.71 |
| Unilever PLC ADR | UL | A++ | 2.88 | 6.5 | 21.82 |
| Union Pacific | UNP | A++ | 2.67 | 21 | 15.84 |
| United Technologies | UTX | A++ | 2.63 | 12.5 | 15.45 |
| Verizon Communic. | VZ | A++ | 4.51 | 3 | 12.54 |
| Wal-Mart Stores | WMT | A++ | 2.82 | 14.5 | 17.28 |
Canada
| Company | Ticker | Domicile Code | Financial Strength | Dividend Yield | Dividend Growth 10-Year | Current PE Ratio |
| Agrium, Inc. | AGU | CA | A | 4.12 | 39 | 14.34 |
| Bank of Montreal | BMO.TO | CA | B++ | 4.15 | 7 | 12.23 |
| Bank of Nova Scotia | BNS.TO | CA | A | 4.59 | 9 | 10.81 |
| BCE Inc. | BCE | CA | B++ | 4.21 | 8.5 | 19.52 |
| Can. Imperial Bank | CM.TO | CA | A+ | 4.64 | 6.5 | 10.98 |
| Can. Natural Res. | CNQ.TO | CA | B++ | 2.42 | 23.5 | |
| Enbridge Inc. | ENB.TO | CA | B++ | 4.02 | 11.5 | 21.08 |
| Jean Coutu Group | PJC/A.TO | CA | B++ | 2.39 | 13 | 16.47 |
| Magna Int’l ‘A’ | MGA | CA | A | 2.49 | 7.5 | 8.13 |
| Manulife Fin’l | MFC | CA | B++ | 3.56 | 3.5 | 11.03 |
| Nat’l Bank of Canada | NA.TO | CA | B++ | 5.21 | 10.5 | 9.84 |
| Pembina Pipeline Corp. | PPL.TO | CA | B++ | 5.01 | 5 | 34.85 |
| Potash Corp. | POT | CA | B++ | 5.98 | 34.5 | 18.59 |
| Royal Bank of Canada | RY.TO | CA | A | 4.25 | 10.5 | 11.85 |
| Russel Metals | RUS.TO | CA | B++ | 6.51 | 16 | 21.23 |
| SNC-Lavalin Group | SNC.TO | CA | B++ | 2 | 18.5 | 17.93 |
| Suncor Energy | SU.TO | CA | A | 3.25 | 24 | 47.6 |
| TELUS Corporation | T.TO | CA | B++ | 4.44 | 15.5 | 16.26 |
| Thomson Reuters | TRI.TO | CA | B++ | 2.51 | 5.5 | 25.86 |
| Toronto-Dominion | TD.TO | CA | B++ | 3.9 | 10.5 | 12.63 |
| TransCanada Corp. | TRP | CA | B++ | 5.44 | 5.5 | 27.7 |
Europe
| Company | Ticker | Domicile Code | Financial Strength | Dividend Yield | Dividend Growth 10-Year | Current PE Ratio |
| Novartis AG ADR | NVS | CH | A++ | 3.44 | 13 | 21.09 |
| Daimler AG | DDAIF | DE | B++ | 5.41 | 6 | 7.46 |
| Siemens AG (ADS) | SIEGY | DE | A | 3.48 | 13.5 | 12.26 |
| Total ADR | TOT | FR | A++ | 5.6 | 5.5 | 14.29 |
| AstraZeneca PLC (ADS) | AZN | GB | B++ | 4.67 | 13.5 | 20.66 |
| Brit. Amer Tobac. ADR | BTI | GB | B++ | 3.87 | 14.5 | 17.56 |
| BT Group ADR | BT | GB | B++ | 3.31 | 2.5 | 13.36 |
| GlaxoSmithKline ADR | GSK | GB | A+ | 6.22 | 6 | 23.04 |
| Rio Tinto plc | RIO | GB | A | 4.32 | 10.5 | 11.57 |
| Vodafone Group ADR | VOD | GB | B++ | 5.07 | 14 | 39.64 |
| WPP PLC ADR | WPPGY | GB | A+ | 3.1 | 17.5 | 15.29 |
| Unilever PLC ADR | UL | NL | A++ | 2.88 | 6.5 | 21.82 |
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Happy Investing!!
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Brian Borgford - Investing 
Hello Brian;
First of all, thanks for writing your blog. It definitely provides food for thought.
I got directed to your blog by a friend who is still with HCT. I used to work there as well but now I work in Kazakhstan. I am also a Canadian so I wonder if you can shed some light on the issue of CPP. I have worked abroad for almost 15 years. I became a nonresident when I started this adventure. Do you know if I will be eligible to any CPP when I return to Canada and reach the right age?
Thanks
Zora
Hi Zora – welcome aboard. Hope you find the blog useful. When you return to Canada you are still eligible for CPP any time after you turn 60. If you start collecting before age 65 your amount will be reduced, if you collect after 65 it will be increased. The actual amount you receive will depend on the number of years you paid into CPP. During your years as a non-resident, you are not paying in, so you will not accumulate pension years for that time. I was out of country for 12 years and turn 65 this year. I will likely apply to start collecting, but my amount will be lower because of my years abroad. Hope this helps – feel free to ask any questions you have. I have a bunch of info about repatriating when you are ready.
Thanks Brian. I will read your book first. I will probably have more questions afterwards. Zora
Great Zora. Thanks for getting the book, hope it helps. It would be helpful for me if you could post a review on Amazon after you finish the book. Thanks Brian
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