Thursday, September 1, 2011

Getting paid to wait

As many many portfolio managers have said before, and will say again and again and again, I shall now repeat their words so that you too can reap the benefits.

What does this mean?  Big, brand name companies that you know or use their products every day.  

From a risk standpoint, our big banks in Canada will never be going away and most of them have posted huge profits for this past quarter beating the profit expectations.  Plus, with the recent world and market turmoil our banks have fallen in price by at least 10% from the recent highs during the past winter.  If you are tired of losing your savings to inflation, then why not buy a bank stock?  Plus they all yield 3.5% or better.  (No savings account in Canada currently bests inflation!  If you're a die hard saver without any investments I have some bad news for you:  you're LOSING money by saving.  Invest, invest, invest.  Or pay off your debts are FAR better ways to "save" for your future.)

So how does this get me paid to wait?  We're all waiting for economic recovery and while this happens the big bank stocks will creep up in value or go sideways or slide a bit more before things pick up.  All the while they pay 4 times a year a nice dividend.  Protip: re-invest that dividend!

Other thoughts and ideas?  Bell Canada, Rogers, Telus.  Hard to go horribly wrong with any of them.

How have I done after the recent market slip?  I did a tiny bit of portfolio shuffling but I mostly held fast.  I'm not going anywhere any time soon, nor are my holdings.  They continue to yield and do business as usual.  My income from my investments is currently all re-invested.  But if I did stop my re-investment plans I would be making approximately 15% of my monthly budget without having to lift a finger.

My opinions are mine and mine alone.  (Or regurgitated from other people who do this stuff)  If you bet your entire life's worth on some flyer I can't be held responsible.  Since I never recommended any flyer it's your own damn fault.

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