Last week on the Sunday Reads, the Fed pivot had turned into a divot. This week the markets continued to fall, pricing in more rate hikes and earnings headwinds and recession risk. The S&P 500 was down by 2.8% this week. The tech-heavy Nasdaq was down 3.8%. Canadian stocks were down 2.3%. Inflation continues to drive the bus, and the Fed actions. We’re having another look at the Fed divot on the Sunday Reads.
Here’s last week’s post …
Big Canadian Banks, value stocks rule and the big Fed divot.
But the banks cleared the stage on Friday for Fed Chair Jerome Powell who delivered commentary on the fight against inflation. The markets jeered Jerome. The Fed pivot (go easy on rate hikes eh) turned into the big Fed divot.
Volatily and uncertainty continued this week. All normal and expected market behaviour.
And well said …
Wealth building is simple, but the execution is not, thanks to those market corrections.
Create the largest portfolio (total return) that you can while investing within your risk tolerance level. Lower prices are good, and sometimes great. These market corrections are wonderful opportunities. Accept lower prices. In fact, embrace lower prices and keep adding on a regular schedule.
And here’s a primer on the financial planning basics.
Retirees reading this blog know how to manage the risks.
Making sense
Kyle made sense of the markets on MoneySense. Check out the migration of millionaires, there’s a surprsing twist or two in that section. You’ll also find the countries on the road to financial ruin. It’s a big list. Kyle does not think that “Bitcoin fixes that”. Ha.
Scott Barlow uncovered a bearish view on the Canadian banks, courtesy of Bank of America.
Readers won’t be surprised to know that my view is to buy the big Canadian banks, especially when they come under pressure. The banks are already in good value territory, and there may (likely) be more favourable value to come.
Stocktrades.ca offers 3 very good Canadian dividend stocks to own in 2022. I’d have to agree. Two utilities and Canada’s number one energy beast that you’ll find in the energy dividends post.
Have a look at Twitter friend and energy enthusiast Burnsco, and his Canadian/energy-centric portfolio (with yields) …
I updated this post that shows the Ninepoint Energy Income Fund (NRGI) delivering on that potential of a 40% income boost.
On Million Dollar Journey, I had explored investing in the big Canadian energy giants with a stable income stream at the core of the strategy. This week in the Globe …
CIBC World Markets estimates that large producers like Suncor, Canadian Natural Resources Ltd, Cenovus Energy Inc. and Imperial Oil Ltd. combined will generate more than $60-billion of cash in 2022.
Consider Tourmaline Oil Corp., a natural gas and oil producer: The stock’s indicated yield, based on quarterly dividend payments, is just 1.2 per cent. But thanks to three special dividends in 2022, the trailing yield is nearly 8 per cent.
I will soon update that Million Dollar Journey post, and I will include Tourmaline in the mix of the most solid energy plays. I hold Tourmaline, CNQ, Suncor, IMO and more.
More Sunday Reads
Here’s a Weekend Reads headline on My Own Advisor, that should get some attention – What the FIRE community gets wrong. Good post.
Always a must read, the week in review on Dividend Hawk.
And the greatest hits of the week from Banker on Fire. In the mix, what is the greatest factor to investment (wealth building) success?
Hint:
If only we could go back in time to give our youngerselves a good slap upside the head. Bob at Tawcan offers ten lessons for 23-year old Bob.
In all honesty that time travel exercise would not work for me. I did not even consider growing up until I was 30. And at that time I was wiped out financially to zer0, by a business “partner”. I’m happy to report things are working out well, almost 30 years later.
Dividend updates
Out quick with the divdend update for August is Matthew at All About The Dividends. It’s nice to see some good U.S. growth names in the mix. And while Matthew is counting the dividends, I’m sure he will capitalize on the income potential of selling shares (one day) in those wonderful growth names such as Apple and Texas Instruments.
You will also find an August portfolio update on My Money Maaster.
And a dividend update on Our Financial Life.
For more on the dividend front, The dividend capture strategy on Findependence Hub., from Patrick McKeough. Not my bag, but have a read.
The Fed-driven market
Check out Martin Pelletier’s latest market update. It’s a Fed-driven market.
Martin had also shared this Tweet on U.S. inflation above 5% …
A recession seems likely. And Canada is known to follow the U.S. on that economic path. But as always, anything can happen.
Be prepared. Awareness is preparedness.
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Dale
Just wanted to congratulate you on making Scott Barlow’s Friday edition of ‘Top Links’.
You were the ‘Tweet of the Day’.
That’s the big time!