# Canadian Banks - Too Early ??



## Pickering (Jun 24, 2011)

Missed the last oportunity with the banks in 2009 - would my portfolio love those juicy yields.
If we believe the Feds ( and I do ) that our banks are solid - yields are starting to look very attractive - from TD at a low of 3.71 to CIBC at 5.01. Royal looks good at 4.41 - especially after just dumping the US Centuria division.
Looking for a long time hold - retired and totally dependant on dividend income to feed my golf and travel habit.
Is this the time to pull the trigger or is patience a virtue - thoughts appreciated.


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## larry81 (Nov 22, 2010)

what is the general consensus about avoiding concentrated position in specific bank and holding an ETF like XDV for yield (when NAV become attractive)

http://ca.ishares.com/product_info/fund/overview/XDV.htm


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## Mike59 (May 22, 2010)

Also consider XFN.TO, otherwise I like National and Bank of Nova Scotia on value, both also have reasonable yields. 

Compared with 52 week lows, today's prices appear high. With drops like we've had, you may still be buying in near the top, who knows?


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## daddybigbucks (Jan 30, 2011)

larry81 said:


> what is the general consensus about avoiding concentrated position in specific bank and holding an ETF like XDV for yield (when NAV become attractive)
> 
> http://ca.ishares.com/product_info/fund/overview/XDV.htm


I never understood why everyone loves etf's on here so much.

On 5 year chart of TD vs XDV

TD is up 39%
XDV is up 24%

TD yield is 3.7%
XDV is 2.1%

to me, you would make double the gain and same risk, so what would be the point?


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## Abha (Jun 26, 2011)

daddybigbucks said:


> I never understood why everyone loves etf's on here so much.
> 
> On 5 year chart of TD vs XDV
> 
> ...


XDV allows you to play the entire field and with TD you are exposed to any risk that TD faces. While TD beat the ETF in the past, it might not in the future.


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## Argonaut (Dec 7, 2010)

Those who love ETFs are probably mostly ex-mutual fund investors who are attracted by the same passive nature but the lower fees. Can't fault them, but not my bag. 

It's actually beneficial to the stockpickers, because the markets tend to move in tandem during volatile times from all of the indexes gyrating back and forth. When the dust settles we can pick up the good companies from the rubble at a discount.

Regarding buying the banks, dollar cost averaging is one option. But I think all bets should be off until August 26th. It is literally going to be a turning point day.


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## daddybigbucks (Jan 30, 2011)

Abha said:


> XDV allows you to play the entire field and with TD you are exposed to any risk that TD faces. While TD beat the ETF in the past, it might not in the future.


I can understand that for some companies( ie oil and BP), but i feel banks all follow the same business model as was shown with the US bank fails in 2008.

doubling your capital appreciation is too much incentive to stay with the individual banks as opposed to a managed fund--for me.


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## KaeJS (Sep 28, 2010)

I'd go with individual banks.

TD and BMO for core,

and a tiny bit of RY as a semi-hedge, just in case the US really _does_ get flocked, TD and BMO will get hit hard and RY should be better off for selling their stupid US Retail business.


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## Abha (Jun 26, 2011)

KaeJS said:


> I'd go with individual banks.
> 
> TD and BMO for core,
> 
> and a tiny bit of RY as a semi-hedge, just in case the US really _does_ get flocked, TD and BMO will get hit hard and RY should be better off for selling their stupid US Retail business.


3 banks is too much concentration in Canadian financials. I'd stick with TD as your play and BMO as your employment bonus.

Forget RY and focus on a South American bank


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## KaeJS (Sep 28, 2010)

^ Not purchasing those. Just saying that if I was the OP, I would split up my "Canadian Banks Investment Money" between those 3. OP said Canadian banks, Not South American Bank 

Personally, I am only holding/keeping BMO.


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## HaroldCrump (Jun 10, 2009)

South American bank...do you have any particular names in mind?
I'm rather leery of foreign banks, even European and US ones.
Given the financial crisis unfolding right now, any of these Latin American banks (even ostensibly large cap ones) could disappear in a cloud of smoke and fire within days.
Latin America has a long history of financial and currency crisis.
Brazil is currently in high inflation mode and the govt. is trying to keep it capped, but not suceeding too much.

If you gotta have to have banks, I'd stick with a couple of the Canadian ones - BMO and BNS are my favorites.
Also, if the OP is not comfortable making the selections on his own, may I recommend the TD Monthly Income mutual fund?
It is relatively low fee (1.4% IIRC) and its holdings are the common and preferred shares of the 5 Canadian banks.
The downside is cushioned by the dividends from the commons and preferred of the banks, which are just about the safest you can get these days.

That's my $0.02 dividend


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## sensfan15 (Jul 13, 2011)

If your looking for Latin American bank exposure, BNS is a good choice.


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## Abha (Jun 26, 2011)

I like the Latin banks because of the boom in economics that the Olympics and World Cup will bring to their economy in the next few years.

It's an early position to catch the upside. Airlines would be a good bet too albeit a riskier one.


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## Sampson (Apr 3, 2009)

I don't believe any Canadian bank has any significant exposure to South America.

I just perused BNS's financial statement and it looks like only 6% of their operations are in S.A., and only in a single country, Chile.

I know they have significant presence in Central America, including Mexico and many Caribbean countries, but not in S.A.


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## Jon_Snow (May 20, 2009)

I vacation in the Baja every year and I still can't get used to the sight of the BNS logo there... Although I admit that I find comfort in using their ATM's rather than their Mexican-owned counterparts.


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## Cal (Jun 17, 2009)

Abha - Airlines is one industry that I will never invest in. I agree far too risky. None of them seem to consistently make $.


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## fatcat (Nov 11, 2009)

> South American bank...do you have any particular names in mind?
> I'm rather leery of foreign banks, even European and US ones.
> Given the financial crisis unfolding right now, any of these Latin American banks (even ostensibly large cap ones) could disappear in a cloud of smoke and fire within days.
> Latin America has a long history of financial and currency crisis.
> ...


the worlds safest banks: 

http://www.cnbc.com/id/44202688


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## Jungle (Feb 17, 2010)

Takes too long to click through 45 pages of "safe banks" on that website. Coles notes version on ONE page please?


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## dubmac (Jan 9, 2011)

Argonaut said:


> Regarding buying the banks, dollar cost averaging is one option. But I think all bets should be off until August 26th. It is literally going to be a turning point day.


Why will Aug 26th be a turning point day? If it turns positive, shouldn't one get "in" on the 25th?


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## Pickering (Jun 24, 2011)

The Canadian Banks report this week - RY is on the 26th. What I am trying to reconcile is strong earnings ? / dividend increase ? / and no matter what happens they get slammed with market malaise.
Would I dearly love to pick up ( for arguments sake ) a Royal in the mid 40's a yield at 6% or close to it. Just using ry as an example - could be any name


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## killuminati (Mar 14, 2011)

Argonaut said:


> Those who love ETFs are probably mostly ex-mutual fund investors who are attracted by the same passive nature but the lower fees. Can't fault them, but not my bag.
> 
> It's actually beneficial to the stockpickers, because the markets tend to move in tandem during volatile times from all of the indexes gyrating back and forth. When the dust settles we can pick up the good companies from the rubble at a discount.
> 
> Regarding buying the banks, dollar cost averaging is one option. But I think all bets should be off until August 26th. It is literally going to be a turning point day.


Sorry for the dumb question... whats happening on August 26th?


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## DavidJD (Sep 27, 2009)

All the Cdn Banks are down again today. Divs are near or climbing over 4%.
BNS just hit a 52-week low...


What am I missing? Should we be backing up the truck and loading up? Is the US going to have that great of an impact?

I have read that CIBC is a great buy and TDW had a target of $80+ - it is at $69. Others say that TD is solid and protected from US damage so if it slips it is all based on fear, not fact.

What are people using to select a CDN bank from the deals right now?


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## Abha (Jun 26, 2011)

DavidJD said:


> All the Cdn Banks are down again today. Divs are near or climbing over 4%.
> BNS just hit a 52-week low...
> 
> 
> ...


CIBC is definitely not the play here. TD is the best defensive name in the sector and BMO and BNS offer the best growth potential. RBC is the market leader so you can't go wrong with them either.


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## Eder (Feb 16, 2011)

I am still waiting till more stuff like the zerohedge article comes out and more analysts sagely put a sell on all the banks and a stronger buy on bullion.


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## KaeJS (Sep 28, 2010)

DavidJD said:


> Others say that TD is solid and protected from US damage so if it slips it is all based on fear, not fact.
> 
> What are people using to select a CDN bank from the deals right now?


TD is not _protected_ from US Damage. It is very much susceptible to US Damage. However, TD _is_ solid.

I would say for TD to slip, it is based mostly on fear and less on fact. The FACT is that next week TD will release its third quarter earnings, and then you will see that it is solid. lol

My favourites are TD and BMO. Wouldnt touch CIBC or BNS. RY is neutral to me. I think they were stupid for selling their US Retail Biz, but at the same time, they could have made a really smart move and I could be the one thats dumb.  Time will tell.


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## KaeJS (Sep 28, 2010)

Eder said:


> I am still waiting till more stuff like the zerohedge article comes out and more analysts sagely put a sell on all the banks and a stronger buy on bullion.


Do you actually think this is going to happen? (not trying to be rude, valid question)


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## Eder (Feb 16, 2011)

KaeJS said:


> Do you actually think this is going to happen? (not trying to be rude, valid question)


I was being sarcastic...I think that guy at Zerohedge was being overly simplistic but then was surprised that reputable journals actually are responding to this crap...

I don't really know what to think so will continue sitting on my hands...(I have a boatload of Can banks and intend to add more during this correction/recession/depression)


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## KaeJS (Sep 28, 2010)

^ Gotcha.

I didn't pick up on the sarcasm through text. I thought what you said was a little bit outrageous, which is why I asked lol.


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## gibor365 (Apr 1, 2011)

KaeJS said:


> TD is not _protected_ from US Damage. It is very much susceptible to US Damage. However, TD _is_ solid.
> 
> I would say for TD to slip, it is based mostly on fear and less on fact. The FACT is that next week TD will release its third quarter earnings, and then you will see that it is solid. lol
> 
> My favourites are TD and BMO. Wouldnt touch CIBC or BNS. RY is neutral to me. I think they were stupid for selling their US Retail Biz, but at the same time, they could have made a really smart move and I could be the one thats dumb.  Time will tell.


It's difficult to say if RY was right or wrong. Now they have a lot of cash and I know that RBC Dexia buying a lot of Canadian mutual fund companies (indirectly we work with them)....so , yes, time will tell....


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