August 2016 Investment Report

Laurier House in Ottawa where my uncle worked with Prime Minister Mackenzie King

Family History Mixed With Canadian History

August was a month to travel to Ontario with the grandkids. I took the opportunity to visit Laurier House in Ottawa to explore my heritage.  My Uncle Deane Russell worked for Prime Minister Mackenzie King from 1939 to 1945.  My uncle wrote a memoir of his time with the PM and I was able to get the Alberta Historical Society to agree to publish it  – coming out later this year.  I created a family version which you can see by clicking the picture above.

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August Results

The markets were pretty flat this month with a fractional gain or loss, leaving the YTD relatively untouched from last month.My Canadian stocks grew slightly more than the TSX, but my US fell by over 1% for the month.  My YTD gains are still 10% to 12%, depending on the measurement, making 2016 a pretty good year as long as there are no big drops in the last four months.  Helped by a strengthening US dollar my overall portfolio (in Canadian dollars) grew by 0.36% (10.21% for the year).

	Aug	YTD
TSX	0.10%	12.21%
DJIA	-0.17%	5.60%
S&P	-0.12%	6.21%
BB CDN	0.99%	12.58%
BB US	-1.36%	12.66%
BB Total (no FX)	0.25%	12.32%
BB Total (incl FX)	0.36%	10.21%

 

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Regular reader David, provided this link to a mobile app for investments that he finds useful.  It appears it is an Apple only app, so those with IPhone and IPad can give it a try.

https://itunes.apple.com/us/app/stock-master-real-time-stocks/id591644846?mt=8

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Buy on Fact, Sell on Rumour

If you have read the comments section, you will see I received a question about POT.  Just at the end of the month there was a rumoured merger between AGU and POT, Canada’s big two potash producers.  The potash industry has been depressed for the past year or so on low world prices.  That prompted POT to cut its dividend twice, removing it from my suggested list and putting it on my “sell” list.  I was just looking for the right time to sell my position in POT.

The rumoured merger caused both stocks to rise considerably in one day (8% for AGU and 12% for POT).  Using the above adage, I sold my positions in both.

The merger may or may not take place, and it could result in further increases in share values, but, as I note in the comments, A Bird in the Hand…

I have always made a habit of selling on a big jump based on a market rumour.  It may cost me some future gains, but it does allow me to bank the unexpected profits and protect against a pullback if the rumour turns out to be bad.

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More on Housing

Knowing my feelings about real estate as an “investment”, several people sent me a link to this article – interesting reading.

http://www.cbc.ca/news/business/house-investment-wealth-1.3716641

HERE is a handy Rent vs Buy flowchart

http://www.businessinsider.com/buy-or-rent-a-home-flowchart-2016-7

HERE is an intelligent discussion of rent vs buy with a spreadsheet to calculate the difference.

http://wheredoesallmymoneygo.com/rent-versus-buy-calculator/

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Suggested Stocks

US

Company	Ticker	Financial Strength	Dividend Yield	Dividend Growth 10-Year	Current PE Ratio
3M Company	MMM	A++	2.47	8.5	21.51
AT&T Inc.	T	A++	4.72	3.5	14.31
Automatic Data Proc.	ADP	A++	2.53	13	25.5
Boeing	BA	A++	3.46	12.5	14.55
Bristol-Myers Squibb	BMY	A++	2.59	2.5	23.13
Cardinal Health	CAH	A++	2.34	26	18.08
Chevron Corp.	CVX	A++	4.2	10	73.3
Coca-Cola	KO	A++	3.3	9.5	22.17
Colgate-Palmolive	CL	A++	2.09	11	26.19
Deere & Co.	DE	A++	2.75	15.5	23.66
Dover Corp.	DOV	A++	2.39	9.5	21.61
Du Pont	DD	A++	2.31	2.5	20.78
Emerson Electric	EMR	A++	3.51	8	17.01
Exxon Mobil Corp.	XOM	A++	3.45	9.5	31.57
Franklin Resources	BEN	A++	2.25	15.5	12.42
Grainger (W.W.)	GWW	A++	2.11	17.5	19.47
Home Depot	HD	A++	2.04	19.5	21.16
Honeywell Int’l	HON	A++	2.04	9.5	17.2
Illinois Tool Works	ITW	A++	2.18	12	21.1
Infosys Ltd. ADR	INFY	A++	2.62	17.5	15.29
Int’l Business Mach.	IBM	A++	3.56	20	12.94
Intel Corp.	INTC	A++	2.96	17.5	14.26
Johnson & Johnson	JNJ	A++	2.78	9.5	19.57
Kimberly-Clark	KMB	A++	2.87	8	23.35
Lilly (Eli)	LLY	A++	2.62	3.5	21.61
Lockheed Martin	LMT	A++	2.78	20.5	20.06
McDonald’s Corp.	MCD	A++	3.19	20	20.25
Medtronic plc	MDT	A++	2.01	15	15.53
Merck & Co.	MRK	A++	2.95	1.5	16.89
Microsoft Corp.	MSFT	A++	2.63	19	20.2
Novartis AG ADR	NVS	A++	3.47	13	20.88
Novo Nordisk ADR	NVO	A++	2.35	26.5	18.89
PepsiCo, Inc.	PEP	A++	2.8	11.5	22.2
Pfizer, Inc.	PFE	A++	3.45	4.5	19.21
Procter & Gamble	PG	A++	3.05	10	23.32
Public Serv. Enterprise	PEG	A++	3.86	3	16.63
Qualcomm Inc.	QCOM	A++	3.38	22.5	13.53
Raytheon Co.	RTN	A++	2.07	11.5	16.98
Schlumberger Ltd.	SLB	A++	2.46	15.5	73.95
Smucker (J.M.)	SJM	A++	2.13	9.5	21.69
Texas Instruments	TXN	A++	2.18	29.5	22.82
Total ADR	TOT	A++	5.75	5.5	12.38
Travelers Cos.	TRV	A++	2.28	8	12.18
Unilever PLC ADR	UL	A++	3.12	6.5	23.4
Union Pacific	UNP	A++	2.31	21	18.32
United Technologies	UTX	A++	2.45	12.5	16.05
Verizon Communic.	VZ	A++	4.28	3	13.46
Wal-Mart Stores	WMT	A++	2.81	14.5	17.12

Canada

Company	Ticker	Domicile Code	Financial Strength	Dividend Yield	Dividend Growth 10-Year	Current PE Ratio
Agrium, Inc.	AGU	CA	A	4.15	39	15.42
Bank of Montreal	BMO.TO	CA	B++	4.06	7	12.76
Bank of Nova Scotia	BNS.TO	CA	A	4.36	9	11.54
BCE Inc.	BCE	CA	B++	4.28	8.5	19
Cameco Corp.	CCO.TO	CA	B+	3.28	14	17.4
Can. Imperial Bank	CM.TO	CA	A+	4.69	6.5	10.85
Can. Natural Res.	CNQ.TO	CA	B++	2.27	23.5
Empire Company Ltd.	EMP/A.TO	CA	B++	2.08	10	11.46
Enbridge Inc.	ENB.TO	CA	B++	4.1	12.5	21.48
Finning Int’l	FTT.TO	CA	B+	3.11	13	25.79
Fortis Inc.	FTS.TO	CA	B+	3.51	9	19.1
Jean Coutu Group	PJC/A.TO	CA	B++	2.46	13	16.38
Magna Int’l ‘A’	MGA	CA	A	2.49	7.5	7.76
Manulife Fin’l	MFC	CA	B++	4.17	3.5	9.7
Methanex Corp.	MEOH	CA	B+	3.86	12
Nat’l Bank of Canada	NA.TO	CA	B++	4.86	10.5	10.21
Pembina Pipeline Corp.	PPL.TO	CA	B++	4.86	5	33.75
Potash Corp.	POT	CA	B++	2.43	37	26.16
Power Financial	PWF.TO	CA	B+	5.32	7	9.44
Rogers Communications	RCIB.TO	CA	B+	3.39	51.5	19.35
Royal Bank of Canada	RY.TO	CA	A	4.2	10.5	12
Russel Metals	RUS.TO	CA	B++	7.03	10	19.31
Shaw Commun. ‘B’	SJRB.TO	CA	B+	4.53	28.5	19.48
Suncor Energy	SU.TO	CA	A	3.2	24
TELUS Corporation	T.TO	CA	B++	4.45	15.5	16.86
Thomson Reuters	TRI.TO	CA	B++	2.53	5.5	25.37
Toronto-Dominion	TD.TO	CA	B++	3.97	10.5	12.26
TransCanada Corp.	TRP	CA	B++	4.84	5.5	27.3

Europe

Company	Ticker	Domicile Code	Financial Strength	Dividend Yield	Dividend Growth 10-Year	Current PE Ratio
Novartis AG ADR	NVS	CH	A++	3.47	13	20.88
Daimler AG	DDAIF	DE	B++	5.34	5	7.04
Siemens AG (ADS)	SIEGY	DE	A	3.16	11	13.4
Novo Nordisk ADR	NVO	DK	A++	2.35	26.5	18.89
Total ADR	TOT	FR	A++	5.75	5.5	12.38
AstraZeneca PLC (ADS)	AZN	GB	B++	4.21	12	22.3
Brit. Amer Tobac. ADR	BTI	GB	B++	3.34	14	20.52
BT Group ADR	BT	GB	B++	4.2	0.5	11.91
GlaxoSmithKline ADR	GSK	GB	A+	5.03	6	27.68
Rio Tinto plc	RIO	GB	A	3.46	11	12.73
Vodafone Group ADR	VOD	GB	B++	5.63	14	36.59
WPP PLC ADR	WPPGY	GB	A+	2.66	17	18.78
Luxottica Group ADR	LUX	IT	B+	2.04	12	23.34
Tenaris S.A. ADS	TS	LU	B+	3.19	10	57.67
Philips Electronics NV	PHG	NL	B+	3.24	8.5	43.97
Unilever PLC ADR	UL	NL	A++	3.12	6.5	23.4

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Happy Investing!!

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