It’s the Canada Day long weekend and we Canucks certainly have a lot to be thankful for. We live in one of the best countries on the planet. Sure, we’ll complain here and there, sometimes to the point where we are even forced to write a letter (Canadian defiance). It’s not a perfect country or system, but there is no denying it is a wonderful place to live and raise a family. We are blessed with breathtaking nature and resources. The opportunities are abundant. We are mostly a caring people and society. Happy Canada Day Dividends.
First off I will share a few Tweet pics that paint a picture of our beautiful country. I am partial to the sea and the east coast. From Newfoundland.
From our recent trip to New Brunswick and P.E.I. North Rustico, my heaven on earth.
The sunset at Wasaga Beach, Ontario last night. The best sunsets have no sun.
Wasaga Beach is the longest fresh water beach in the world. You can walk for miles and miles, fortunately. And we do.
Canadians are looking for Summer fun
Canadians are spending more and are looking to get out there to travel and play.
The following is condensed from a collection of posts in the Globe & Mail.
Stores are bustling, restaurants overflow with diners and airports are packed with passengers – albeit frustrated ones. This week Statistics Canada reported that retail sales volumes rose 0.9 per cent in April from the month before, a measure that accounts for higher prices. Statscan estimates retail sales climbed an additional 1.6 per cent in May, again outpacing the month-to-month rate of inflation.
Canada’s major banks point to a sturdy consumer. Royal Bank of Canada has found that consumer spending on its credit and debit cards is roughly 30 per cent higher than prepandemic levels. After adjusting for inflation, spending by Toronto-Dominion Bank clients using debit and credit cards was up 15 per cent in May from a year earlier. “Consumers are clearly keen to get out and have fun after two years of pandemic restrictions,” TD economists said in a recent report.
The RBC numbers show people are still buying loads of stuff. It’s a similar story in the United States, where real personal expenditures on goods are still much higher than before the pandemic.
We have seen a massive rebound in travel – to no surprise, folks put their travel expenses on their credit cards.
Restaurant sales are above pre-pandemic levels, 20% higher than in 2019.
What’s unclear is how long this resilience on the part of shoppers will last. While the Conference Board of Canada’s weekly index of consumer spending climbed 3 per cent in the last week of May from the month before, the organization’s consumer confidence reading for June plunged to its lowest level in 18 months.
Data published by Statscan on Thursday estimate Canada’s gross domestic product fell 0.2 per cent month over month in May. We had a 0.3-per-cent GDP gain in April.
All said, economists do predict a solid second quarter for the Canadian economy with storm clouds swirling.
Enjoy your travel and worry about the economy later.
The dividends we earn and spend
While we are entering unusual and tough economic times, many suggest that Canada is blessed. And perhaps no county is in a better position to benefit from the current inflationary and stagfationary times. And our stock markets are holding up, quite well. We are only half as bad as the U.S. markets 😉 in the first half of 2022.
This week on MoneySense it was Jonathan Chevreau’s turn as a relief writer, while Kyle Prevost enjoys some vacation time. It’s a great read …
Making Sense of the Markets: July 3
And back to those big Canadian stock dividends
While the Canadian stock markets are holiding up much better than U.S. and international, our big and juicy Canadian dividends are true north strong and plentiful. The following table represents a 1-year period to the end of June 2022.
We see over the last year that the Canadian Wide Moat 7 and Vanguard’s VDY have delivered generous positive returns, even as the Canadian stock market is down almost 4%. Vanguard’s VDY continues to outperform my concentrated wide moat portfolio.
We hold VDY in my wife’s accounts, along with iShares TSX 60 XIU. We are weighted much more to VDY. I hold the wide moat stocks.
The wide moat portfolio still has the edge from the inception date of VDY.
Canadian and American investors who seek the unique benefits of the Canadian high dividend approach can also look to the Beat The TSX Portfolio.
If I could only buy 10 stocks
In 2019 I went through the interesting exercise of what if – what if I could only own 10 stocks. On Seeking Alpha I ran the numbers. What a great response from readers and Seeking Alpha. It was an editors’ pick and was number 1 on the reader board for a few hours.
The portfolio idea was to offer growth, but present a more defensive stance. It was mission accomplished as the portfolio delivered much greater stability compared to an appropriate Canadian and U.S. stock benchmark.
From the time when the markets started to hickup in the Fall of 2021 …
- Top 10 stocks: up 2.1%
- Benchmark: down 3.4%
That was an interesting exercise and result.
The weekend reads
While I will be back tomorrow with the Sunday Reads, you can get a jump on things with … Weekend Reading – The happiness and engagement edition on My Own Advisor.
Happy Canada Day Long Weekend!
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VDY pays less than a GIC and looks like its about to fall off a cliff! No thanks!