No longer making sense of the markets. Plus, big dividends for big returns.

I have submitted my last column for Making Sense of the Markets. For almost two years I have scanned the headlines, listened to many economists, observed past market trends to try and make sense of it all. It has been an exciting journey. And what an incredible learning experience. There was never a dull week. That can happen when you’re in the middle of a pandemic, soaring inflation arrives, and then war in Ukraine presents the threat of World War III. The invasion of Ukraine will also rewrite the global trade maps, and fan the flames of inflation and supply chain woes. It is with mixed feelings that I leave behind – Making Sense of the Markets.

I’m not exactly sure why I left behind my weekly column. And on that, here’s Making Sense of the Markets for the week ending April 1. And certainly there are more important things to ponder these days than why I left a steady and thriving writing gig. But if I have to answer, my enthusasism started to slip. The main culprit is likely repetition of the task. While it was always interesting, there was and is repetition of the process. And while the names and stories changed, I think I learned most of what I can with respect to how markets move based on events, news and the economic conditions and estimates.

I turn 60 this Fall. My brain does not have a lot of time left to tackle new ventures. And I guess I am greedy and selfish in that regard.

More to come

All said, I am certainly not leaving MoneySense. I have been invited to create a new column, and tackle any subjects that interest me the most. MoneySense is a great partner. And the publication is a great resource for Canadians. I’m thankful that Horizons ETFs sponsored the weekly column as well. Also on that front, there was never any pressure from MoneySense to include Horizons mentions or any of the companies that sponsor the online publication. I respect them for allowing me to cover the weekly events as I see fit.

Have a read of the latest MoneySense post (link above) as I go through some of the investment suggestions and themes from the column. There might be some good ideas in there 🙂 I see that over the last year a typical balanced growth portfolio is up about 7%. Our accounts (for me and my wife ) are up 20% and more. Yes, you can play around the fringes of a core portfolio to add value.

Big dividends. Big returns

The juicy paying dividend stocks continue to outperform on both sides of the border. That is a more recent event in the U.S. market and a long term trend in the Canadian stock market. I mentioned Vanguard’s High Dividend VYM in a recent MoneySense post. Check out the PE ratio and inflation-friendly sector allocation. That is a U.S. dollar ETF.

On this side of the border the high dividend approach continues to thrive. I have covered the Beat The TSX Portfolio on this blog. Here’s the portfolio for 2022. The table shows the starting yields for the year.

You will also see my Canadian Wide Moat Portfolio in the above comparison. In my personal RRSP account I build around that wide moat core. You will see considerable overlaps between the Wide Moat and Beat The TSX Portfolio.

The Beat The TSX and Wide Moat stocks

In the above, the standard deviation represents the volatility of the individual assets. We see the energy and pipeline exposure drive the outperformance.

And as I had suggested as a possibility, iShares XEI is starting to outperform Vanguard’s VDY. That’s no surprise as XEI holds greater exposure to Canadian energy stocks.

Here’s VDY vs XEI.

And of course we hold bonds, bitcoin, energy and commodity ETFs and the U.S. stock portfolio. It’s that total diversified mix that has allowed the portfolios to greatly surpass the traditional stock and bond portfolio approach.

How to build a portfolio

A reader asked if I wound consider a Zoom call presentation covering the basics of portfolio constrution. The answer is yes of course. And you can join in. Stay tuned. I will send Cut The Crap Investing followers an invitation. You can follow this blog (it’s free) by way of that Subscribe button on the right hand side of this page. Look for this, simply enter your email …

It is a simple process to build the successful portfolio. As a homework exercise, start on the ETF Model Portfolio page, then have a look at the asset allocation ETF portfolio page. More diversified (advanced) portfolios are found in the all-weather balanced portfolios.

Thanks for reading. And thanks for supporting the MoneySense column. That will continue with a new writer who will bring a fresh approach.

We’ll see you tomorrow with the Sunday Reads.

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Helping Ukraine 

More than two million people have been displaced from Ukraine since February 24, 2022, and aid is urgently needed. Consider making a contribution to the Canadian Red Cross, Canada-Ukraine Foundation, Help Us Help, Save the Children Canada, Global Medic or another charitable organization of your choice. Be sure to donate to reputable charities actually making an impact, and beware of fundraising scams.