Peter, the leader of one of my investment clubs gets us some interesting meetings. The other week he got us a meeting at Steinberg Wealth Management. I always find these meeting interesting and I always learn something. Their web site is here.
They first talked about the investment, geopolitical and political climate of today and their concerns. They are worried about debt levels, global growth, interest rates and current investment valuations. They are concerned about fixed income returns no longer covering inflation. They are concerned that being fully invested is not a sound investment approach.
They have a Value Equity Fund that has produced a 5 year annualized return of 6.9% and a 7 year annualized return of 10.2%. They talked about the entry price being critical. They like to pay a price lower than the 5 year high. They feel that Free Cash Flow is important.
They also have a fixed income fund that has a current yield of 6.31%. Their portfolio has high yield corporate bonds rated at BB or B. They said that 80% of the bond market is callable bonds. However, with callable bonds, you get a nice cash bonus when they are recalled.
I find their bond strategy rather intriguing. I have not held any bonds since 2007. Most articles I have read about bond buying in a time of low or negative interest rates talk about making money in capital gains. When interest rates go lower your bond value goes up so you can make capital gains. I personally do not invest for capital gains so this sort of investing is not for me.
There is an interview with Lorne Steinberg by Bob Scully.
On my other blog I wrote yesterday about Cenovus Energy Inc. (TSX-CVE, NYSE-CVE) ... learn more. Next, I will write about Johnson and Johnson (NYSE-JNJ) ... learn more on Wednesday, November 13, 2019 around 5 pm.
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