Lower U.S. inflation and Jerome Powell comments gave The Bank of Canada permission to go on a rate cutting frenzy (say experts). The news and numbers in the U.S. was more of a spark north of the border. Canadian stocks were up 2.76% for the week, vs 0.87% for U.S. stocks. International developed nation stocks were up 1.80%. The U.S. might get the green light to cut rates a few times in 2024. That removes some of the currency risk for the Canadian Dollar and might free up the Bank of Canada. Rate cuts can make a currency less attractive as bond yields fall. Canadian stocks hit an all-time high thanks to news down south.

As always, economic navel gazing is for entertainment purposes only. I find it more than interesting, and it certainly is not investable information. It’s like watching a sporting event. I like sports. I like investing. The sentence I have repeated the most on this blog is –
Get an investment plan and stick to it like glue.
Playing catch up?
The U.S. economy and U.S. stocks have dominated coming out of the financial crisis of 2008-2009. It is crucial to have a healthy allotment and overweight to the U.S. market.
From the Canadian ETF Portfolio page.

But as I reported a few months ago – Canadian stocks are better than you think.
Buy ETFs for free at Questrade
It will be welcome news if Canadian stocks can play a bit of catch up. I had some fun with that this week on Twitter / X .
The TSX 60 from 2015, turning every $10,000 into $20,887. With all the bad press on Canada. that’s ‘not bad, eh’.

Last week, I updated the returns for two outperforming Canadian stock models – the Canadian Wide Moat and the Beat The TSX Portfolio.
5% real returns for Canadian stocks?
This model predicts very solid returns for Canadian stocks. That would be a welcome event.
Oil and gas cash flow
Here’s the free cash flow projections for North American oil and gas. Oil and gas (XEG.TO) has been the best performing sector in 2024. Enough investors are recognizing the level of free cash flow compared to other sectors, and the market. I keep adding to our positions.
Earnings estimates for U.S. stocks …
The U.S. is certainly where they keep the growth and so many of the best companies on earth.
U.S. Bitcoin ETFs continue to attract money
Readers will know that I am a fan of a modest allocation to bitcoin, the best performing asset in history. As always – past performance does not guarantee future returns.
The bull and bear scorecard
And here’s the bull and bear history in chart form.

More weekend reads
Bob at Tawcan chats with Dividend Earner to get a take on his portfolio approach. It’s nice to see an investor with dividend in the blog name, but he gets that it’s all about total return. It is so important to go for total return and …
Separate the accumulation and retirement stages.
More money creates more retirement income. Period. Having $1.8 million is better than having $1.0 million. Dividend counters, feel free to argue against that point.
For those planning to live off their dividends, the biggest thing is to know that the largest nest egg is the best for dividend income when it’s time to withdraw, until then, the dividend income doesn’t mean anything (even if I report it monthly as a journal, it’s meaningless).
Dividend Earner
From that post / Dividend Earner –
However, after a few years, I realized I was building the portfolio of a 70-year-old retiree instead of a younger adult with many years ahead of retirement so I switched from the simple dividend income idea to dividend growth investing.
Dividend Earner

Hopefully Dividend Earner will realize that total return is the secret in retirement as well. Portfolio success in retirement comes down to total return and risk level. That’s it.
We need that financial plan and optimized cash flow plan, as well.
The weekly wraps
From Dividend Hawk, the week in review as earnings season gets ready to roll again. One of my favourite defensives reported this past week – Pepsi (PEP). They are facing challenging times due to global economic weakness and the weight loss drug ‘craze’. Take away the appetitie, folks eat less snacks. That said, Pepsi guides to very solid earnings growth. From Hawk –
‘PEP reports Non-GAAP EPS of $2.28, beating analyst estimates by $0.12 and increasing 9.1% year-over-year. Revenue of $22.5 billion misses analyst estimates by $100 million but increased 0.8% versus the same quarter last year. For 2024 the Management now expects approximately 4 percent organic revenue growth, at least 8 percent increase in core constant currency EPS and total cash returns to shareholders of approximately $8.2 billion, comprised of dividends of $7.2 billion and share repurchases of $1.0 billion.’
Pepsi, Walmart (WMT) and Johnson & Johnson (JNJ) form the core of the U.S. defensive line in my RRSP.
There’s nothing better than defensive sectors for retirement.
At Banker on Wheels they get in gear with a look at the optimal portfolio mix over the last 100 years, and what are the major considerations over the next decade. The link to that topic on BoW leads you to a search page. Click on the Financial Times post at the top to get your free read.
Inflation and retirement
On that same theme – how does inflation affect retirement from Of Dollars & Data. That is a very good post covering inflation and spend rates in different periods. This is interesting; in periods of disfinflation retirees were able to take their spend rates well above 4%. For inflationary periods, not so much …

A key is to be flexible as I often write. Use a variable spend rate. We can spend more when markets roar. We spend less when they’re not at their best.
Readers know that I am a fan of including dedicated inflation-fighters such as oil and gas stocks. The Purpose PRA Real Asset ETF (PRA.TO) is a wonderful diversifed basket of precious metals, commodities, real estate and oil and gas holdings.
Portfolio rebalancing
In the mix is how to rebalance your portfolio from Humble Dollar. I was pruning my Apple tree this week.
At Findependence Hub an ode to passive index investing. from Robb Engen. We can build our own ETF portfolio, or look to one of the global asset allocation ETFs.
For advice, planning and lower-fee index-based portfolios, check out Justwealth, Canada’s top Robo Advisor.
On the asset allocation ETF front Stocktrades takes a look at Vanguard’s VGRO.
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OUR SAVINGS ACCOUNTS
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OUR CASHBACK CREDIT CARD
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