Investment advisers often point to months such as this past March to explain the value they offer in comparison with DIY investing.
In a crashing stock market, an adviser can be a voice of reason and rationality. Someone to hear out panicked investors and then explain why they shouldn’t act on their emotions with impulsive portfolio changes. Unfortunately, quite a lot of investors never got this type of service from their advisers in the market plunge.
A poll commissioned by the Ontario Securities Commission documents the problem. Close to 2,000 people were asked between March 30 and April 11 about the anxiety they felt about their investments, and 47 per cent said they were more stressed.
How did advisers tackle this wall of worry? Almost three-quarters of poll participants with an adviser did have some form of communication from this individual or his or her firm. The flip side here is that close to 25 per cent did not hear from their adviser during the worst market plunge since the global financial crisis.
A total of 46 per cent of poll participants with an adviser actually had discussions with this person. But another 17 per cent received “informative messages” and 11 per cent received some other type of communication.
Message to the one in four investors who never heard from their adviser: This individual does not care about your account. You probably know that already. Now for the 28 per cent who got an e-mail or other form of impersonal communication: Your adviser doesn’t care about your account, either. Adding your name to an e-mail distribution list is worth about $1 of the total fees you’ll pay this year.
The real deal in advice is personal contact. Not just in the introductory client-adviser phase, when you’re handing over money to invest, but regularly through the years and most certainly during stock-market crashes. Close to half of advisers contacted their clients in April; kudos to them for a demonstration of one of the core reasons to have an adviser.
-- Rob Carrick, personal finance columnist
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Stocks to ponder
CT Real Estate Investment Trust (CRT.UN-T) holds a portfolio of properties with Canadian Tire as its anchor tenant and is a security that is best suited by investors seeking reliable income. While the unit price may only appreciate modestly in the near-term, the monthly distribution is dependable. The average 12-month target price suggests the unit price has a potential total return of nearly 15 per cent, including its attractive current yield of 5.8 per cent. Jennifer Dowty has a profile of the REIT (for Globe subs).
The Rundown
The Canadian dollar is in serious trouble: David Rosenberg
Canada’s best known economist, David Rosenberg, thinks the Canadian dollar is an accident waiting to happen. Now back to near the highs of the year of around 76 cents, he notes the rally is all about greenback depreciation; other commodity-influenced global currencies are doing better than ours. Meanwhile, bearish bets in financial markets are piling up against the currency. And political uncertainty and skyrocketing debt levels are another reason not to own the loonie. Read his column on why a bet on the loonie could be one of the most dangerous investing moves right now. (for Globe subs).
Canadian and U.S. renewable energy stocks: Good under Trump, better under Biden?
Renewable energy stocks have performed superbly under the tenure of coal-loving U.S. President Donald Trump. Now, some observers believe that a Joe Biden administration will give the green sector – including a number of Canadian dividend stocks – its next big push. David Berman reports (for Globe subs).
National Bank shakes up its Dividend All-Stars portfolio
National Bank released an update to its 2020 Dividend All-Stars portfolio this week. Seven securities have been removed from the portfolio while five securities have been added. Jennifer Dowty goes over all the changes and price targets (for Globe subs).
Value investing has never scored this badly against growth stocks. This won’t last
Value investing added more than 100 years to its winning streak after the recent unearthing of data from before the great crash of 1929. All told, value outperformed in the United States since 1825 with many ups and downs along the way. Alas, it is currently in its most dramatic down period on record, reports Norman Rothery (for Globe subs).
Fear fading on Wall Street as investors learn to love the new bull market
Fear is ebbing on Wall Street, with stocks on a bull run in the midst of the global coronavirus pandemic. The Cboe Volatility Index, known as Wall Street’s “fear gauge,” is near its lowest level since late February and options markets are showing diminishing concerns of a near-term drop in equities. The S&P 500′s run to fresh highs has come as some of Wall Street’s biggest banks, including Goldman Sachs, UBS Global Wealth Management and Morgan Stanley, turn more bullish on stocks and are urging clients to remain exposed to equities. April Joyner and Tom Westbrook of Reuters look at the growing optimism on the Street.
All-in-one portfolios prove their worth during COVID-19
Vanguard, iShares and BMO each offer all-in-one portfolio ETFs that charge annual fees between 0.17 per cent and 0.25 per cent per year. Despite the COVID-19 market swings, they are all up for 2020. If your portfolio didn’t match or beat these ETFs, you either paid high investment fees, took unnecessary risks or fiddled with your money, says Andrew Hallam.
More on ETFs:
How to position your ETF portfolio for a potential second COVID-19 wave
Robinhood Financial’s most-popular ETFs show oil speculators have come out to play
Others (for subscribers)
The week’s most oversold and overbought stocks on the TSX
Friday’s analyst upgrades and downgrades
Thursday’s analyst upgrades and downgrades
Friday’s Insider Report: Board chair cashes out nearly $30-million from this dividend stock
Thursday’s Insider Report: CEO invests over $5-million in this Canadian large-cap stock
Number Cruncher: Five silver stocks that pay sustainable dividends
Number Cruncher: These 10 momentum stocks have led the pack in the TSX recovery
Ontario to set minimum standards for financial planner, adviser designations
Others (for everyone)
Speculators keep iron ore price sizzling, divorced from fundamentals
In U.S.-China tech war, investors bet on China’s localization push
Apple is worth US$2-trillion in market value, punctuating big tech’s grip
Ask Globe Investor
Question: I have a number of Canadian dividend-paying stocks in a non-registered account. I don’t have a pension, and this is a way of generating some money. As a snowbird, would it be worth having U.S. dividend paying stocks? I’ve been hesitant due to the 15-per-cent withholding tax.
Answer: If you need U.S. cash flow, this is a good way to generate it and avoid exchange-rate risk. There are some top-quality U.S. stocks that offer very attractive yields right now – check out AT&T Inc. (T-N), for example. Withholding tax that is deducted from a non-registered account can be claimed as a foreign tax credit when you file your tax return.
--Gordon Pape
What’s up in the days ahead
One overlooked star of the TSX in recent months is Real Matters. Its gains are right up there with Shopify, as the drop in interest rates has sparked a boom in its business of mortgage financing. Tim Shufelt will take a closer look at the stock, as well as some others that are benefiting from the resiliency of North American housing markets.
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Compiled by Globe Investor Staff