I am still working through some of the portfolio updates. I will try to finish that off this week, including the retirement portfolio models. This week we can take a look at the Beat The TSX Portfolio, Wide Moat, energy dividends and model portfolios on Justin Bender’s blog. We also look to Vanguard’s VRIF and other retirement funding developments.
November and December brought the Beat The TSX Portfolio into negative territory for 2022. Though the portfolio did keep the beat.
Here’s the Canadian Wide Moat Portfolio update.
And a 10 fold increase in the Birchcliff dividend provides a shocking headline for the energy dividend portfolio. Tourmaline also announced another special dividend.
And my crazy 8 U.S. stocks teach the market a lesson from 2020.
A risk-on week
This week it was back to a risk-on scenario. We have a reversal from what worked in 2022.
Of course, no one knows what will happen and the market makers are simply making a guess. Their money is on a soft economic landing. In last week’s Sunday Reads, I looked at the opinion of Bob Eliott who suggested that we are currently in a period of ‘transitory Goldilocks’. We have inflation behaving (somewhat) and a consumer that is more resilient than many predicted. The labour market remains quite robust. But employment is the last to fall. Here’s the order of attack for rate hikes.
The scenario could change as Bob feel’s the markets are fighting the Fed. The inflation fight is not over.
All said, let’s hope the stock markets are right and that we do get some form of soft landing or soft recession. But we could use a real correction in real estate in Canada. Unaffordability is at record highs.
Scott Barlow reported that we are at or near the mortgage rate peak – according to BMO. Also from Scott, some more love for Canadian Natural Resources.
More Sunday Reads
On My Own Advisor Mark offers the Model Portfolio returns edition. The post links to Justin Bender’s portfolio returns update. That is an excellent summary of 2022 and assets. Given the poor performance of bonds in 2022, model portfolios delivered similar returns across the board.
Of course those asset allocation portfolios don’t hold dedicated inflation fighters. And most who build model ETF portfolios don’t include (in the moment) inflation protection. On Cut The Crap Investing I make note of the inflation fighters if you want to build an all-weather portfolio. That can make sense for a retiree or near-retiree.
In a TD Bank podcast I will be discussing the all-weather portfolio models. That will be followed up with a live Q&A podcast session.
You can sign up here for the podcast.
The Hawk looks at the week
We have the week in review on Dividend Hawk. Hawk will be getting busy as earnings season heats up in the coming weeks.
On stocktrades.ca, Dan looks at top healthcare stocks in Canada. Don’t worry there are no cannabis stocks in the mix 😉
On Tawcan, Bob asks if short-termism is hurting your investment returns. For most investors, the less you do and think – the better. Adopt a simple (and cheap) investment strategy and stay the course. Add monies on a regular schedule. Get out of your own way. I love watching the markets and paying attention to economic trends, and I can generate better returns and risk-adjusted returns.
For many, the watching makes them react to the ups and downs of the markets. It does not lead to good behaviour.
Retired Money: inflation and tax brackets
On Findependence Hub, Jonathan Chevreau takes a look at inflation and how that affects tax brackets, CPP, Old Age Security payments and more. That’s an excellent post that links to the original post on MoneySense.
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Gordon Pape offered an interesting look at how retirees will see a drop in their RRIF payments in 2023 due to the fall in stock and bond prices. From that post …
“We’ll assume the account holder was age 75 on Jan. 1, 2022, and had RRIF assets totaling $500,000. The minimum annual withdrawal rate at 75 is 5.82 per cent. That means she was required to withdraw $29,100 last year.
Her portfolio lost 10 per cent of its original value during the year – a decline of $50,000. Add to that the money she withdrew, and she finished the year with a RRIF that was worth $420,900. That’s the amount upon which the minimum withdrawal for 2023 is calculated.
She’s now 76, so her minimum this year is 5.98 per cent. That works out to about $25,170. Her RRIF income has dropped by $3,930!”
In my opinion that drop in income is a ‘good thing’. Think of it as a variable withdrawal strategy that will take out less after a year of poor performance. And of course, retirees don’t necessarily spend all of their RRIF payments – some of the monies might be moved and reinvested in a TFSA or taxable account.
VRIF payment moves down with the market
The Vanguard Retirement Income Fund (VRIF) was down in 2022 by 11.48%. As I detailed last year, the income payment is also varible and will move with the portfolio value. The income payment will be 11.48% lower in 2023. I will update that VRIF post when we get the official distribution from Vanguard.
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Hi Dale, Re: Performance update to the end of 2022
Could you possibly update the performances of the Canadian robo-advisors and compare them to the iShares, Vanguard & BMO model portfolio performances.
It would also be interesting to compare the 2022 performance of BMO’s Canadian Low Volatility ETF (ZLB) to your Canadian Wide Moat and BTSX 2022 performances.
Hi Bernie, I had recently updated the Robo performance as per Rob Carrick. I can look at the same time frame for the other model portfolios.
That said, Justwealth (the cream of the crop) did recently provide an update.
I will do some more comparisons.
Thanks for stopping by, and I hope that all is well. 🙂
Hello Dale,
would you consider looking at the returns of TD’s ETF’s, including the TD one click, and a CDN, US, International & Bond ETF. There’s a lot of reporting on Vanguard, iShares , BMO, and Horizon ETF’s , but it would be interesting to see how TD’s ETF’s stack up. Their EasyTrade platform allows for 50 free trades on stocks, and ETF”s, however only TD ETF’s are available for purchase and I was wondering how they compare to Vanguard and ishares.