US Asset Class Returns by Year 1998 to 2017: Chart

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Diversification is one of the most important strategies to follow when investing in equity markets. Putting all eggs in one basket is never a good idea. Many investors who piled into tech stocks during the dot-com era lost everything due to lack of diversification.

Diversification can take many forms including spreading one’s asset among various countries, regions, sectors, asset classes and asset types. The following chart shows the benefits of diversification based on US asset returns by year:

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Source: Blackrock

In 2017, US large cap growth were the top performers with a return of 30.2% while fixed income was the second worst performer with a return of just 3.5%. International stocks earned the highest returns after US large cap growth at 25%. This shows the need for diversifying overseas.

Back in 2008, at the height of the Global Financial Crisis(GFC) US large cap growth and foreign stocks lost 38% and 43% respectively while fixed income yielded 5.2%.

So in a nutshell, investors need to allocate their portfolio among many asset classes. Simply owning only large caps or only fixed income is not a wise strategy.

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • S&P MidCap 400 SPDR ETF (MDY)
  • SPDR Consumer Discretionary Select Sector SPDR Fund (XLY)
  • SPDR Consumer Staples Select Sector SPDR Fund (XLP)
  • SPDR Energy Select Sector SPDR Fund (XLE)
  • SPDR Financials Select Sector SPDR Fund (XLF)
  • iShares Dow Jones Select Dividend ETF (DVY)
  • SPDR S&P Dividend ETF (SDY)
  • Vanguard Dividend Appreciation ETF (VIG)

Disclosure: No Positions

The Top 10 Canadian Dividend Stocks

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The top 10 dividend stocks of Canada are shown in the chart below:

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Note: Data shown is as of April 20, 2018 and is based on the domestic market.

For US investors, Canada charges a lower withholding taxes on dividends for regular taxable accounts(except REITs).  There is no dividend withholding taxes for stocks held in qualified retirement accounts such as IRAs, 401-K, etc.

Source: Dividend Ranking

Disclosure: No Positions

A Timeline of Retail Bankruptcies From 2015 Thru March 2018: Infographics

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The retail industry is one of the worst performing industries in recent years. Hundreds of retail companies have gone bankrupt some almost overnight. A variety of factors are attributed to the retail apocalypse with Amazon being the prime reason. However blaming Amazon(AMZN) for all failures is an easy way out. Real reasons such as moronic business plans, management in-competencies, etc. are rarely mentioned.

The following is a neat infographic showing the timeline of recent retail bankruptcies:

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Source: Here’s A List Of 40 Bankruptcies In The Retail Apocalypse And Why They Failed, CB Insights

Hat Tip: FT Alphaville

The Top Latin American Multi-National Companies 2018

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The Boston Consulting Group published a research report on Multi-National Companies in Latin America for 2018.  The top firms from each country is shown in the chart below:

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From the report:

We began by analyzing more than 5,000 companies with operations in Latin America that have more than $1 billion in revenue and that have grown faster than the regional average and operate beyond their national borders. The technolatinas included in our latest study are Latin America-based companies in tech-related businesses that compete internationally and had more than $300 million in revenue in 2016. (See Exhibit 1.)

Two observations:

  • Firms from Brazil, Chile, and Mexico dominate the above ranking though other countries are represented this year as well.
  • Many of the companies listed above trade as ADRs on the US market. Some of them are: Ecopetrol SA (EC), Bancolombia SA (CIB), Ultrapar Participacoes SA (UGP), Vina Concha y Toro SA (VCO), Braskem SA (BAK), Embraer SA (ERJ), etc.

Source: Why Multilatinas Hold the Key to Latin America’s Economic Future, BCG

Disclosure: Long EC, CIB

The Worlds Biggest Dividend Payers, Q1 2018

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Janus Henderson Investors has published the Janus Henderson Global Dividend Index, a quarterly, long-term study into global dividend trends. The study analyzes the dividend payments of the 1,200 largest firms by market capitalisation globally.

The Worlds Biggest Dividend Payers, Q1 2018 from the report:

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Source: Janus Henderson Global Dividend Index, Janus Henderson Investors

While most of the firms in the top ten are well known, Nordea Bank(NRBAY) of Sweden may be unknown to some investors. It is interesting that this relatively small bank from Scandinavia appears in the top 10 global dividend payers.

Disclosure: No Positions