Review of Model Portfolios as at May 28, 2017

Hi and welcome back to my stock portfolio blog.  Wow, it's been three years since I started it and I can't believe how time flies.  

The TSX is slumping yet global stock markets are still strong.

https://www.theguardian.com/business/2017/may/16/global-stock-markets-whats-driving-the-rise-and-will-it-continue

I remain cautious right now.

Let's now examine the portfolios of the past three years.

May 2014 Portfolio

Most of the stocks in the M2014 portfolio are doing well.  LNR and STN are both down a bit but not much.  Strongest stocks in this portfolio are GIB.A and GC.  EQB is down close to 20%, mostly due to the recent events surrounding mortgage lender Home Capital Group (HCG).  There haven't been any reported problems at EQB, but it's being painted with the same brush as HCG.

Overall the portfolio is returning 13.7% before dividends and including dividends of 16.4% over the past 3 years, so our dividend yield is just under 3%.  On a year over year basis, the portfolio is doing about 5% each year, which is kind of meh.

For those of you with financial advisors that are managing your portfolios, make sure that you are asking them to provide you with both sets of numbers, ie Overall performance to Date and Year over Year performance.  You might have a great one year return, but you'll want to know how your portfolio is doing over it's lifespan to get a better idea of the overall portfolio health.

Oh another thing, don't forget to subtract the fees you pay your financial advisors from the portfolio calculations because they will have an impact on your overall return.  Ask your FA if your portfolio performance is net of their fees or not.

On the bright side, the M2014 portfolio is faring much better against the TSX for the past 3 years.  The TSX has only returned a total of 6.2%, or about 2% year over year.   Still better than current GIC returns but just barely.

May 2015 Portfolio

Here's our two year old portfolio.  Again, most of the stocks are doing well.  Stella Jones (SJ) is borderline and the worst performer is fintech company Davis and Hendersen (DH).  DH is being bought out and the transaction closes by 3rd quarter of this year.  There is no more hope of this stock rebounding and the next time we review this portfolio, it will probably be gone.  Strongest stocks in  this portfolio are WPK and ATD.B.

The M2015 portfolio had more of a dividend focus and that has made a strong impact on the returns.
Before dividends, the portfolio returned 9.7% but inclusive of dividends, this portfolio returned 15.3% over two years.  Dividend yield was a healthy 5%. Year over year performance is 7.4% each year.  If you look at the graph, we see a surprising correlation between it's jump in performance and Donald Trump's presidency, both occurring around the November timeframe.  Heh.  Wait until you see the M2016 performance chart.

As compared to the TSX, this portfolio performed much better than the TSX average of 2.6%.

May 2016 Portfolio

Our one year old portfolio is doing exceptionally well.  There is one stock which isn't faring so well, retail property owner/operator First Capital Realty (FCR), down about 5%.  Best performers are AQN and RNW both of which are renewable/electric power generation companies. Hey, wasn't I supposed to diversify?  Why do i have two companies in the same sector?  Oops, my bad.

Well, the portfolio performance is benefitting from my mistake.  It's up 11% over the past year. and when you factor in dividends, the portfolio return jumps to 16%.  Our dividend yield is therefore 5%.
The portfolio performance was actually starting to slump until Donald Trump won his presidency, and then the performance just took off.  Now the performance is starting to peter out, which just happens to be after his first 100 days in office.  Crazy, huh?

Surprisngly, the TSX has had a decent year also with an average return of over 10%.  But we still beat that performance, which is all that matters.

Feb 2017 Portfolio

Here's the non-diversified food and grocery portfolio from earlier this year.  Definitely the grocers like Metro and Loblaws are having a banner year so far, up 15% and 13% respectively in just under 4 months.  However the rest of the food industry stocks are all just treading water.

It's too soon to predict what the one year performance of this portfolio will be but right now we are doing  about 2% to 3% for the quarter year.

You can see that the overall food stocks (excluding L and MRU) are faring no better than the rest of the TSX which is also treading water.

May 2017 Portfolio

So that brings us to our newest M2017 portfolio.  I created this portfolio just days before the market sold off, which is why most of the stocks are underwater.  As I mentioned in my last post, it's getting harder and harder to find stocks which match my criteria for these portfolios.  To reiterate what I'm looking for:

Market Cap over 1B
P/E ratio under 30, preferably under 20
Positive EPS
Beta under 1
Share price above $10
Positive trajectory in 1 and 5 year performance
Decent dividend yield of above 2% is bonus

Yup it's been down close to 3% for the past month.

Even the TSX is doing better than the latest portfolio.  Well not really at -1%, but whatever.

Summary

Portfolios and total overall returns (inclusive of dividend yield)

May 2014 - 16.42% (down, since last checked in Feb, 2017)
May 2015 - 15.36% (up, since last checked in Feb 2017)
May 2016 - 16.17% (up, since last checked in Feb 2017)
Feb 2017 - 3.52% (for 3 months)
May 2017 - (2.91%), down since portfolio inception


 Anyways, we will look in again around the August or September timeframe.   See you then.