This week we celebrated a Canadian stock market milestone as the TSX Composite Index broke the 20,000 level. It also closed above the 20,000 level on Friday. I covered that investing high jump record in my weekly MoneySense post. And in Canadian fashion I offered the double double scorecard. From 5,000 to 10,000 it took 13 years. To get from 10,000 to 20,000 – 12 years. Keep in mind the TSX Composite does not include the reinvestment of dividends, and that has a significant affect on the total returns. Congrats to buy and hold Canadian investor as the Canadian stock market tops 20,000 on Sunday Reads.
Here is the link to Making Sense of the Markets on MoneySense. You’ll see more commentary and observations on that 20,000 event, plus other leading headlines from the week.
On this site retirees got a massive raise thanks to the launch of the Purpose Longevity Pension Fund.
A moment of silence.
Today is June 6th and the anniversary of the landing on Juno Beach. Perhaps none of this would be possible without the bravery and sacrifice of Canadians and many other soldiers and civilians around the world.
We obviously have no idea how much we owe them. Never forget.
More Weekend Reads.
I forgot to share this epic post from Dividend Growth Investing & Retirement. Months of work went into 100 Canadian dividend yield charts. For anyone who buys Canadian stocks, that is a must read and resource.
Or you can skip any research just go with the 10 stocks in the high dividend beat the TSX portfolio. 🙂
And with more on the dividend front, here is 9 must-know tips for dividend investors on Reverse the Crush.
Mark at My Own Advisor is a very successful investor, here is how Mark built his dividend portfolio.
Stocktrades.ca looks into the Canadian Dividend Aristocrats list.
And while we’re on the subject of building portfolios, I am a big fan of dividend investing, but in the end it does come down to total returns, diversification and how we manage risk. And we can certainly build dividend payers into the mix. Please have a read of the new balanced portfolio. Of course you will also need a very good over-arching financial plan.
The inflation watch at the grocery store.
We know that inflation is on the way, and perhaps food inflation will take centre stage this Summer. On Tawcan Bob offers a very interesting price comparison between, Costco, Super Store and Walmart.
It is definitely getting more expensive for Canadians to buy groceries. Inflation is real and is not something we should ignore.
On inflation and commodities, gold, bitcoin and more this post on A Wealth of Common Sense offers a podcast link. You’ll see some great charts on the initial link including …
On Banker on Wheels – How much do you know about investing?
Here’s the 2021 personal finance goals recap on GenYMoney.
Therefore, in 2021, my goal is to increase the dividend income from $17,000 per year to $20,000 (forward annual yield). With a conservative 3.5% yield, this amounts to approximately investing another $86,000 into the portfolio.
On canajunfinances, a look back at the best financial decision ever.
One of the most popular posts ever on Cut The Crap Investing –
It’s nice to see Cut The Crap Investing recognized as one of the top 45 Canadian investment blogs. We even cracked the top 15. 🙂
More to come from Canadian banks?
At the Globe and Mail Scott Barlow offered some very good reports on the Canadian banks and prospects.
Here is CIBC’s top picks in the banking sector. And from that Barlow post …
Bank stocks have handily outperformed the TSX Composite YTD. Investors are rightly asking if all the optimism has been priced in. F2022 consensus EPS certainly looks more appropriate as it has only now pushed above pre pandemic levels (1% higher on average). However, we see potential upside to EPS from NIM [net interest margin] expansion and capital deployment, which we believe are high-probability scenarios. We also think valuation multiples, which are only a snick above average, could have more to give given the positive backdrop. We continue to like potential upside for the banks broadly and have a preference for names where consensus remains conservative, with visible potential catalysts. This points us to TD, BNS and CWB … All of the banks have built excess capital and deployment of that capital towards share repurchases and/or acquisitions represents potential upside to EPS estimates. We estimate upside at 3%-6% for most banks and TD closer to 8%.”
And the banks may have further to run say evaluation models. Thought they are mostly ‘fairly priced’ by historical standards.
BofA Securities identified price to forward 12-month earnings (P/E) ratios as the valuation method that most successfully predicted future returns for U.S. banks stocks. Applying this to Canadian bank stocks, we do indeed see a significant correlation between Canadian bank forward P/E ratios and future five-year returns.
The S&P/TSX Banks Index’s current forward P/E ratio is 11.2 times, marginally more attractive than the 11.7 times average since 2003 (the most data available).
Thanks to Scott for sharing those reports.
The Canadian banks vs the market.
Recent outperformance, using the BMO equal weight bank index …
- 3 year banks 12.07% vs TSX 10.56%
- 5 year banks 13.59% vs TSX 10.31%
- 10 year banks 10.94% vs TSX 6.73%
The greater the duration the greater the beat. No wonder Canadians love their bank stocks. As always, past performance does not guarantee future returns.
BMO’s Free ETF Trades.
Good news on the ETF front as BMO announces free trades on a wide list of core ETFs. It’s great to see that the list includes ETFs from their major competitors.
BMO is the ETF champion in Canada among the big banks.
On Findependence Hub, tax rates are about to rise. What to do?
And I should leave you on a funny note.
Yes you should follow me on Twitter 🙂
Thanks for reading. Have a great Sunday. Shares of this post are the currency that matters.
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