Winning portfolios don’t have be volatile + MORE May 8th

Budgets are one of the most misunderstood financial tools around.

(Jonathan Hayward/CP)
In February 2016, Gerald Soloway announced he was stepping down as CEO of Home Capital Group, a mortgage provider he co-founded 30 years ago. Home Capital, based in Toronto, is an alternative or non-prime lender, issuing mortgages to people generally turned away by traditional banks, such as the self-employed or new Canadians with a limited credit history. “The team at Home Capital today is second to none,” Soloway said in a press release. “I know that the company is in great hands, and I am very confident in their ability to take Home Capital to new heights.”
.cbR{box-sizing:border-box;display:block;width:100%;margin:1em 0;border:1px solid #bbb;padding:.5em}@media (min-width:480px){.cbR{width:250px;margin:0 0 1em 1em;float:right}}How Canada’s real estate market went completely insane
Since then, the company’s share price has plummeted 78 per cent, the deposits it relies on for funding are quickly evaporating and Home Capital’s future is in doubt. The problems started in July 2015, when the firm disclosed it had cut ties with 45 mortgage brokers after an internal investigation revealed that borrower income and employment information had been falsified in order to obtain loans…

(iStock)
Good stock pickers come in all shapes and sizes. And most will tell you that patience is the key to success. If that’s the case, then the superstars in the field of value stock investing are the most patient guys on the planet—many of them waiting a lifetime for big returns.
We can all learn a lot of investing lessons from them. I know I learned a lot from one particular value investing legend at this year’s value investing conference in Toronto—namely, Tony Fell, retired chairman of RBC Capital Markets and former chief executive officer of Dominion Securities. Using just a few of these wise words to find your own buried stock treasure could yield stupendous returns a few years down the road. The key? Patience.

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Tony Fell’s keys to success

It takes 20 years to make an overnight success—meaning that in value investing, slow and steady wins the race. “Shareholders should act like owners of a company,” says Fell. “It pays to find a good business with a good, solid CEO at the helm, and stick with it…

In today’s investing world, there is no shortage of criteria to choose from when picking a stock. Investors can select to build portfolios based on a variety of factors from growth to momentum, or management quality to industry competitiveness. In particular, dividend portfolios are one type you may often see within investing media. Many of them have performed remarkably well, especially in Canada.
But performance should not be your only focus in building a portfolio. As you may well know, with the uncertainty and volatility in the stock market, investors should also be concerned with minimizing risk and preserving capital.
The Test
In an effort to produce a portfolio with potential for outperformance and lower volatility, I used Morningstar CPMS*, which comprises of about 98% of the investible market cap of stocks in Canada, to create an equity strategy that picks stocks with a history of increasing dividends and also have a low beta. Lower beta stocks are less sensitive to stock market movements…

Alberta is still dealing with several problems, chief among them energy prices that are still too low to justify much new investment. An election one province away has the oilpatch on edge.