Welcome to the June edition of Money While You Sleep. This past month was a head scratcher when it comes to the markets. Another strong market performance, i will get into that in a minute.
Here are a few highlights as we slowly get back to a normal society
- Got to be part of another awesome Fathers day.
- Enjoying the nice weather when we get it.
- Celebrated our little boys 4th birthday.
- Got my fifth round of golf in, one of my new hobbies.
- Working back in the office after a couple months of working from home.
Portfolio details:
This month the market continued its gains as we saw the TSX go from $15,192 to $15,515. We purchased no dividend stocks in June however we did dip our feet into one small tech company CloudMD Software & Services Inc. (DOC.V)
Sold
None
Bought
None
Dividend increases and decreases
- No Raises
- No Cuts
Were very happy with a no decrease month as we saw a few over the past couple months
2016 – 2017 – 2018 – 2019 – 2020 Dividends and Rebates received
June came in at $293.55. The drop is based on some portfolio changes made over the past couple months and some decreases from specific companies. However July looks like we will come in at almost double from last year which will be nice to see.
Dividends received in TFSA 1
| Stock List | May | Drip |
| RUS.TO | $39.90 | Yes |
| BPY.UN | $56.47 | Yes |
| MFC.TO | $51.52 | Yes |
| XTC.TO | $29.93 | Yes |
| SU.TO | $13.86 | Not enough |
| FRU.TO | $1.76 | Not enough |
| SIA.TO | $13.57 | Yes |
| EXE.TO | $7.08 | Yes |
| CSH.UN | $15.66 | Yes |
| ALA.TO | $5.36 | Not enough |
| PLZ.UN | $9.75 | Yes |
| NPI.TO | $14.10 | Not enough |
| SIS.TO | $5.17 | Not enough |
| EIF.TO | $6.84 | Not enough |
| Total: | $293.55 |
My thoughts moving forward
Well the economy has started to reopen although not at full capacity. You can tell just by the amount of road traffic on our commutes. However there are plenty of people out there still either on a temp layoff or there jobs have been removed. Here is a recent chart of unemployment in Canada as of June followed by a chart of the TSX.
The amount of government spending recently is absolutely crazy. As of June 16 CERB payments have been extended by 8 more weeks giving us a clue that employment is taking quite some time to return. This brings us to 1/2 a year you can collect CERB, so far. This should be a huge warning to investors that the market is not a good as the chart above entails. Could you only imagine where the market and the economy for that matter would be if the Gold Standard was still in place? For those that are unaware what I’m referring to here is a quick breakdown.
In August 1971, Nixon severed the direct convertibility of U.S. dollars into gold. With this decision, the international currency market, which had become increasingly reliant on the dollar since the enactment of the Bretton Woods Agreement, lost its formal connection to gold. The U.S. dollar, and by extension, the global financial system it effectively sustained, entered the era of fiat money.
This does not mean that there isn’t value in the stock market, it just means now more than ever you need to do your homework and be confident in your research prior to buying a company. If Covid has taught us anything it would be that we can’t continue to run business the same as we once did. You are seeing companies invest in tech at an alarming rate so they can come out the other side on this. You are seeing people work from home and being more productive than ever. Big business is noticing and starting to not resign that next lease. Online communication companies are taking over, the likes of Skype, Webex, Microsoft team and Zoom to name a few. What does this do for air travel? If 60% of air travel is business, what % will it be on the other side of Covid? Its became very inconvenient to shop nowadays. We can no longer feel the fruit in a grocery store and in some cases you can’t even try a shirt on, a necklace, shoes etc….. Many are frustrated and have went straight to online shopping or stopped buying materials until a later date and for good reason. These are things to think about when your looking at companies. What are they doing today to improve the business in the future? If you can’t see the business 10 years from now still going strong you shouldn’t be buying it today. Movie ticket anyone?
At this time I’m compiling a list of companies that have little impact to the information mentioned above. The list focuses on the following sectors: Telecommunications, Banks, Insurance, Utilities, Tech and infrastructure. There is still value in other sectors however its straight up difficult to evaluate. Pay close attention to the companies that are raising there dividends in a very challenging time. We typically buy in 1/4 or 1/3 positions with a little bit of time in between.
I would anticipate another drop in the market come the end of the 3rd quarter and currently building our cash position to be ready to take advantage. Here are a few companies on the radar.
PIF.TO, ARE.TO, TD.TO, RY.TO, EQB.TO, MFC.TO, SLF.TO, NWH.UN.TO, CPX.TO, AQN.TO, T.TO, ENB.TO, NFI.TO,BCE.TO, POW.TO
As Warren Buffet would say:
“THE STOCK MARKET IS A DEVICE FOR TRANSFERRING MONEY FROM THE IMPATIENT TO THE PATIENT “
Invest in yourself
Brian
Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. Please ensure you do your own research.
