Stock Smarts: This Buy and Hold Portfolio Climbs Higher
Here, Gordon Pape gives us an update on his buy and hold portfolio.
My Buy and Hold Portfolio was launched in June 2012 for investors who don’t want to spend a lot of time worrying about their assets.
It focuses on blue-chip stocks that offer long-term growth potential, with a small fixed-income holding mixed in. The original weighting was 10 per cent for each stock with a bond ETF given a 20 per cent position.
I used several criteria to choose the stocks including a superior long-term growth profile, industry leadership, good balance sheet, and relative strength in down markets.
The objective is to generate decent cash flow (all the stocks but one pay a dividend), minimize downside potential, and provide slow but steady growth. The target rate of return is 8 per cent annually.
These are the securities we hold with comments on how they performed since my last review, which was based on results to June 23. Prices are as of the afternoon of Dec. 7.
iShares Canadian Universe Bond Index ETF (TSX: XBB). Bonds tend to be weak in a rising rate environment and we saw the impact of that in the latest period, with the units dropping by $0.52. We received distributions totalling $0.375 per unit, so we recorded a small loss over the six months.
BCE Inc. (TSX, NYSE: BCE). BCE stock moved up nicely, gaining $2.74 since the last review. Because of timing, we only received one dividend during the period, for $0.7174 per share.
Brookfield Asset Management (TSX: BAM.A, NYSE: BAM). Brookfield shares continued to climb, gaining another $3.41. We received two dividends totalling US$0.28 per share.
CN Rail (TSX: CNR, NYSE: CNI). After a strong run, CN’s shares retreated in the latest period, dropping $4.16. We received two dividends for a total of $0.825 per share.
Enbridge (TSX, NYSE: ENB). It was a rough summer and fall for Enbridge. The shares briefly dropped below the $44 mark in mid-November before staging a rally that pushed them back over $49. However, we are still down $2.73 from the time of the May update. We received two dividends totalling $1.22 per share during the period and the company announced a 10 per cent increase effective next February.
Toronto Dominion Bank (TSX, NYSE: TD). The banks have been strong recently the TD’s share price benefitted with a gain of $7.32 during the period. We received two dividend payments of $0.60 each.
Alphabet (NDQ: GOOGL). This company comprises the Google empire. It has been very strong this year, along with the whole tech sector, adding US$65.69 per share since the last review. This is the only stock in the portfolio that does not pay a dividend.