The market challenges continue to be felt around the markets and the inflation is driving interest rates up causing a domino effect …
In these times of turbulence, you want to review your portfolio and make sure you bought your stocks for the right reasons. Double check the why you hold your investments.
Interestingly enough, markets like we have now are beating down fast growing stocks and suppressing strong companies. The pressure is downward on all front but there are bargains to be had.
Say you have a dozen companies you like, how do you choose the one to buy? The yield? the Chowder Score? the P/E? the Market Cap? Years of dividend growth?
I use many of the metrics listed above in my filtering. In fact, I only have Large Cap or Mega Cap stocks in portfolio. I also have stocks with a Chowder Score above 10 in general but when the time comes to buy and decide between stock A or stock B, I like to look at today’s yield against the historical 5 year and categorize it as attractive, neutral, or expensive.
Guess what? The big Canadian banks we love are still not in the attractive yield terriroty but the life insurance stocks all are.
An attractive yield means that under normal dividend growth and normal stock appreciation, the stock is trading lower than the normal range and therefore pays more.
Few energy stocks have an attractive yield these days. Makes sense since oil is doing great and money has shifted to energy in recent months. In other words, you don’t have to chase the sector rotation, add to the stocks you like with an attractive yield.
Check out the screeners if you are interested in the yield strength metric.
The trades for May are simple and consist of new money added for the first time this year.
With the state of the market, I could not just sit on the sideline and put some new money in my taxable account to buy Great West Life. It was a simple follow through from the corp account purchase.
I also add Intact Financial to my TFSA account with the max TFSA contribution for the year.
Below is a weekly snapshot of my portfolio across accounts showing how the market (and currency) impacts it. There are plenty of little drops you need to learn to let go.
The ratios of my sector and industry diversification are pretty similar from month to month in general. It shows the markets are moving all sectors together.
My strategy for my non-registered account is to add to current Canadian dividend stocks and selecting the holding with the highest yield with an attractice 5-year yield. It’s a metric from the Dividend Snapshot Screener.
My May 2022 dividend income is $4,460.
I am making my non-registered account a retirement income account now while keeping the other accounts as dividend growth until I get closer to retirement.
That account now generates over $14K in dividend per year with a yield of 3.96% (up from 3.84% last month). I am hoping to get it close to 4.5% with time and new invested money.