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Thread: Lowdiv TSX portfolio - tracking

  1. #11
    Senior Member My Own Advisor's Avatar
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    Interesting stuff James

    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  2. #12
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    Quote Originally Posted by james4beach View Post
    There's a little over a month to go before the next update and rebalance. In the current period the TSX (XIC) is up 1.9% and my portfolio is up 9.3%.

    Six of the eight positions are outperforming the TSX. Portfolio dividend yield is 0.3%
    If we were to select a small subset of TSX, we would expect it to be more volatile than TSX with the same expected long term return (assuming diversified choice of industries). Didn't the same companies underpeform TSX in the previous reporting period?

    Otherwise, "low dividend" investing is what they call "factor" investment. Everyone is buying the opposite factor (high dividends), so outperformance of a contrarian low div strategy shouldn't come as a surprise. However factors tend to take turns in providing outperformance benefits.

    Regardless of the above, the monitoring period is too short to be meaningful.

  3. #13
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    Quote Originally Posted by mordko View Post
    Regardless of the above, the monitoring period is too short to be meaningful.
    True, this is too short a period and it could just be volatility that I'm seeing.

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  5. #14
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    This current 6 month period is coming to an end. I try to act roughly mid June and mid December. The worst position (KDX) has suddenly spiked 10% which provides a good opportunity to exit, since KDX will be sold in the upcoming rebalance. Current portfolio is looking like +14% gain vs +1% for TSX, huge outperformance. Stay tuned...

  6. #15
    Senior Member humble_pie's Avatar
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    i had to look back to see what this portf contained, here's the link.

    http://canadianmoneyforum.com/showth...=1#post1398737

    took a flying browse through recent posts & apparently this is no longer low-dividend but instead it's been re-engineered as James4's Top 8 Picks.

    it's an 8-pack in other words. One should keep in mind that a canadian midcap is only a smallcap in the US of A, though.

    possible theories to explain the success of the 8-pack:

    a) jas4 is a wizard, brilliant, genius stock picker;
    b) one stock - onex - has pulled up all the others;
    c) canadian small caps are largely neglected, therefore far more volatile than the TSX itself. In bull markets, canadian small caps will outperform as managers search for value outside the already-priced-to-perfection mainstream.

    of course this means that in bear markets, look out below.

    i'm also wondering why this thread was filed under Diaries. It's not really anybody's diary, it seems more suited to the Investing section. At least that's where i'd go looking for it.

  7. #16
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    As mordko rightly pointed out, it could also simply be volatility in a small/midcap portfolio. The 6 month performance is quite meaningless. Over time, the volatility on my picks might average out to the TSX Composite performance. I intend to continue doing this for a few years and seeing how the performance develops.

    I share your concern about what might happen in a bear market. Stay tuned I guess... I will post updates as I rebalance the portfolio.

    Also, moved to Investing.

  8. #17
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    Quote Originally Posted by humble_pie View Post
    apparently this is no longer low-dividend but instead it's been re-engineered as James4's Top 8 Picks.
    Not quite. It's still intended to be low in dividends, but I loosened that criteria. Previously I had explicitly looked for zero-dividend stocks. Now, I consider all stocks with dividends, but I still prefer the low dividend yielders.

    The current portfolio has a dividend yield of 0.3%, so it still pays virtually no dividends. I realize this means it's of little or no interest to most people here, and that's kind of the point. I know that people don't seek out low dividend stocks, so I think there might be more stock picking opportunity in that space.

    Contrarian trade

  9. #18
    Senior Member humble_pie's Avatar
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    nice to see this here.

    jas4, don't you also have another portf of stock picks? as best i can recall, weren't they the 6 top holdings by weight from XIU?

    i'm wondering how the top 6 XIU pack compares to the low-div 8-pack over the past half-year. The 2 mini-portfs are almost polar opposites in concept. It would be nice to post about them consecutively, if not side-by-side, so folks could see the contrast.

    jas4 sorry if this suggestion seems like too much work. Please ignore if that's the case, certainly you already have your hands full with the forum these days.

    the thing is, both portfs are interesting little creatures & taken together they probably have a good pulse on the TSX. Do you think you might be able to wrangle the time to track or report on these 4 together:

    - jas4's top XIU 6-pack
    - XIU
    - jas4's low div 8-pack
    - XIC

  10. #19
    Senior Member Moneytoo's Avatar
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    Quote Originally Posted by james4beach View Post
    The current portfolio has a dividend yield of 0.3%, so it still pays virtually no dividends. I realize this means it's of little or no interest to most people here, and that's kind of the point. I know that people don't seek out low dividend stocks, so I think there might be more stock picking opportunity in that space.
    It was of high interest to me last year when I opened a non-reg account, and realized that with both me and my husband in high marginal tax brackets - the dividend taxes are higher than capital gains ones (besides, the thought was that we'd only start selling when we're retired and our incomes will be much lower)

    So I had a short list of low or no dividend paying stocks (different from yours), bought the first one, ATD.B - but then had a "change of heart" (as the indexing part of our portfolio was doing much better than expected), and decided to stop stock-picking and become an indexer. So buying HXT in the non-reg (no hassle with dividends!) and XMD in TFSA But might reconsider in a few years - depending on performance and the level of interest (to spend more time on it)

  11. #20
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    humble_pie you are correct that these are my two Canadian strategies. The two of them together make up all my Canadian exposure.

    XIU five pack is the top weighted stock from selected sectors, currently: RY, ENB, CNR, BCE, FTS. These are very large caps. Lots of dividends too.

    Lowdiv are some of the smallest caps in Canada, as per this thread.

    Together, these two portfolios tickle opposite ends of the TSX Composite spectrum. It might be good to track them in the same thread. If I had to guess, I'd say that all of it together averages out to the TSX Composite... hopefully better.

    Last edited by james4beach; 2017-06-15 at 01:11 AM.

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