Tuesday, May 16, 2017

Portfolio for the Long Term

My portfolio tends to underperform in bull markets and outperform in bear markets. That means my portfolio never gets the great returns in the bull markets, but never gets the lows in the bear markets. It is less volatile. I think that over all I get a better return.

My portfolio does not mirror the TSX. The TSX is mostly banks and resources. I have the banks but I have less than 1% of my portfolio in resources. I never buy a resource stock for the long term.

Ben Graham I think certainly got it right for the individual investor. He said that the individual investor should act consistently as an investor and not as a speculator. I think that it is acting like a speculator that causes individual investors to lose money. It is not that I have not lost money on a stock; it is just that over all I have made money.

I make compounding work for me. For example, I bought Emera in 2005. On my original stock purchase after some 12 years I am making a dividend yield of 11% whereas the current yield is around 4.45%. Take the stock Fortis Inc. I bought stock some 21 years ago. On this stock I have a dividend yield on my original purchase of 23%. The current yield is 3.59%. I also bought Royal Bank some 21 years ago and I am making a dividend yield of 48% on my original purchase. Its current yield is 3.76%.

Banks are particularly good in having good dividends that grow well. But you also have to diversify. You cannot diversity in the Canadian market as much as you can in the US market, but we do have a variety of utilities, consumer and industrial stocks.

On my other blog I wrote yesterday about Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF)... learn more. Tomorrow, I will write about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more on Wednesday, May 17, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

1 comment:

  1. Well said, particularly the part about compounding. Thanks.