One Month To Go
Finally – some time at home
What a ride November was. The ending was good, but there were some tense moments. The Dow gained over 5% for November, bringing it to 9.75% for the year. Good showing after three consecutive losing months. The S&P gained 3.42% for a YTD gain of 7.58%, putting it slightly above its previous high of 6.34% in July – again following three consecutive losing months.
The TSX rose as well, by a very respectable 2% for the month bringing its YTD gain to almost 16%. This is turning into the best year in a long time for the Canadian market.
My Canadian portfolio almost kept pace with the TSX for the month but is well ahead on the year with almost 18.5% YTD. My US stocks grew by under 2% for the month. I’m not invested in many of the “Trump” stocks that saw gigantic gains since the US election (eg, Goldman Sachs), but my YTD US portfolio is still well above the market with 12 1/2% gain on the year.
|BB Total (no FX)||1.67%||16.56%|
|BB Total (incl FX)||1.72%||14.01%|
US Election Results – Impact on Markets:
The initial reaction of the markets to Trump’s election was very negative – the after hours markets tanked by 5% as the news unfolded. However, the morning after showed a bit more calm with an actual increase in the markets, which persisted for the rest of election week and beyond. Goldman Sachs has risen almost 25% since election day. Many economists and financial experts are predicting turbulent times ahead. Health care companies, defense contractors and some big banks, have seen a spike in share prices, while renewable energy is seeing a steep decline. Short term (6 month) impact will likely be negligible with frequent ups and downs. Markets like stability and predictability – two traits President Elect Trump dislikes, according to his public statements. We will have to see what the longer term brings.
HERE is an article on how the election of President Trump might affect Canadian investors.
One financial expert predicts the market will tank – click HERE for that view.
Warren Buffet, no fan of Trump, claims the market will rise – click HERE to get his take.
One thing that’s true about market predictions – they are almost always WRONG. So don’t bother listening to anyone, just follow your strategy.
The MarketWatch Newsletter had a few interesting articles about investing in the era of President Trump. Rather than cherry pick some articles, I have copied the entire newsletter below, complete with links.
By now you may have gotten over the big surprise and possible loss of sleep on Election Night. But Donald Trump’s presidency, with the Republican Party in control of both houses of Congress, might affect you financially in several ways, for years to come.
Maria LaMagna considers how Trump’s presidency may affect prices of consumer goods , while Tony Garcia tallies up possible job losses if Trump gets his way on trade .
Daniel Goldstein shares his thoughts on what Trump’s win will mean for home prices .
Bill Bischoff takes a detailed look at many tax changes that may take place under Trump’s watch.
Here are three stocks that can gain from Trump’s win .
Tomi Kilgore covers investors’ fixation with bank stocks in the wake of “Trump’s trifecta.”
Sara Sjolin shows which European bank stocks jumped following Trump’s triumph.
Ryan Vlastelica points to an obvious, but still risky, Trump play: Coal .
It’s not uncommon for celebrities in the U.S. to stamp their feet and threaten to move if an election doesn’t go their way. But Quentin Fottrell has provided five reasons to move to Canada , that have nothing to do with Donald Trump.
On the other hand, Maria LaMagna’s list of six reasons to think twice before moving to Canada , was massively popular with MarketWatch readers.
Tomi Kilgore says Donald Trump cannot take credit for the post-election stock-market rally .
Ciara Linnane provides a sector-by-sector guide to how companies will be affected by Trump’s presidency .
Brett Arends offers a 12-step plan to strengthen your portfolio after Trump’s victory .
Barbara Kollmeyer spells out what it will take for the stock market’s post-election rally to continue .
Alessandra Malito advises you to look in the mirror and make careful investing decisions , rather than reacting to political news.
Rex Nutting believes Trump will not be able to satisfy the people who voted for him .
Tim Mullaney compares Donald Trump to Ronald Reagan .
Paul Brandus points out that Trump may find it difficult to get used to leading by consensus .
Emma Court explains how difficult it will be for President Trump and the Republican-controlled congress to repeal or fix the Affordable Care Act , which has become unaffordable for many people. She also explains the difficulty women are facing as they worry Obamacare’s birth-control benefits may disappear .
The Supreme Court short has been one justice since the passing of the conservative Antonin Scalia in February, because Senate Republicans made it clear they would refuse even to consider any nomination made by President Obama. Robert Schroeder describes the makeup of the Supreme Court and lists several judges whom Donald Trump may nominate , not only for the current vacancy among the justices, but the additional vacancies that seem very possible
Darrell Delamaide takes the Democratic Party to task for its “hubris and ethical blindness ,” while also pointing the way to “the right balance for a center-left party” under a new generation of leadership.
Questions from Readers
POT and AGU – see the comments section for a recent question and my response.
DP, a Canadian world traveller, formerly of Japan, Qatar and Thailand, and now living somewhere in Central America, asks:
Response from DP:
In July I listed an analysis of what I considered the “Ideal US Portfolio” consisting of CVX, KO, PG, TRV, JNJ, MRK, BA, MCD, IBM, VZ. Rather than keep showing my list of the same US stocks each month, I will provide the list one more time and will only update it a couple times each year. The following stocks are A++ by ValueLine, have over a 2% dividend yield and have increased their dividends regularly. I suggest you only pick from these stocks. If you have questions on others, please feel free to let ask.
|Company||Ticker||Financial Strength||Dividend Yield||Dividend Growth 10-Year||Current PE Ratio|
|Automatic Data Proc.||ADP||A++||2.54||13||25.42|
|Deere & Co.||DE||A++||2.85||15.5||21.07|
|Exxon Mobil Corp.||XOM||A++||3.27||9.5||34.64|
|Illinois Tool Works||ITW||A++||2.06||12||19.25|
|Infosys Ltd. ADR||INFY||A++||2.59||17.5||15.48|
|Int’l Business Mach.||IBM||A++||3.65||20||12.68|
|Johnson & Johnson||JNJ||A++||2.77||9.5||19.73|
|Merck & Co.||MRK||A++||3.19||1.5||15.59|
|Novartis AG ADR||NVS||A++||3.42||13||21.23|
|Novo Nordisk ADR||NVO||A++||2.41||26.5||18.38|
|Procter & Gamble||PG||A++||3.18||10||23.2|
|Public Serv. Enterprise||PEG||A++||3.85||3||16.67|
|Unilever PLC ADR||UL||A++||3.08||6.5||23.73|
In June I listed what I considered the “Ideal Canadian Portfolio” consisting of TD, RY, PWF, BCE, RUS, AGU, SU, TRP, FTS, TRI. There are other stocks that adequately fit my strategy of a strong company with a long record of issuing good dividends and increasing those dividends regularly. Rather than continually listing the same companies over and over again in each blog, I will only update the list a couple times each year. Here is a complete list of suggested Canadian stocks with a dividend yield of over 3%. I suggest you only select Canadian stocks from this list. There are a few more with lower yields so if there are any others you are curious about, feel free to ask.
|Bank of Montreal||BMO|
|Bank of Nova Scotia||BNS|
|Can. Imperial Bank||CM|
|CI Financial Corp||CIX|
|Great-West Lifeco Inc.||GWO|
|Manulife Financial Corp.||MFC|
|National Bank of Canada||NA|
|Pembina Pipeline Corp.||PPL|
|Power Financial Corp||PWF|
|Royal Bank of Canada||RY|
|Sun Life Fin’l Svcs.||SLF|
|Thomson Reuters Corp||TRI|
As with the US and Canadian stocks, this list does not change much. I will refer you to the previous months to check which stocks I suggest. I will update this list a couple of times next year.