Canada’s S&P/TSX Annual Total Returns From 1948 To 2020: Chart

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Equities tend to go up in the long term measured in decades. This is true for most equity markets. Many studies have shown the US equities for instance have yielded positive returns in more years than negative returns. Canadian stocks have also performed in a similar fashion. In the years from 1948 to 2020, Canadian stocks as represented by the S&P/TSX Composite Index have returned positive Total Returns in more years than they have returned negative returns as shown in the chart below:

Click to enlarge

Source: Time in the market, not timing the market, is what builds wealth by Stephen Rogers, IG Wealth Management

The key takeaway is staying invested is more important than trying to time the market. Markets can turn abruptly and it is not possible for any investor to predict which direction it will go.

Related ETF:

  • iShares MSCI Canada Index Fund (EWC)

Disclosure: No positions

Five Foreign Stocks With High Dividends To Consider For Potential Investment

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Investing in equities seems like a unwise decision these days due to a variety of reasons. Buying foreign stocks sounds even more imprudent with US equities performing very well so far this year. An investor looking to put money to work, can easily earn over 5% simply by buying a 1-year CD. Or to earn higher returns they can invest in an S&P 500 index fund. However in order to earn higher returns and diversification purposes it is critical to consider overseas equities also. Compared to the traditional low dividend yield of 2% for the S&P 500, investors looking to expand their horizon can earn higher income from going abroad. In addition to higher dividend yield, there is also the potential for price appreciation.

Five foreign stocks that have dividend yields of over 5% are listed below for further research and considering for potential investment:

1.Company: National Grid PLC (NGG)
Current Dividend Yield: 5.43%
Foreign Dividend Withholding Tax Rate: 0%
Sector: Multi-Utilities
Country: UK

2.Company: Bancolombia SA (CIB)
Current Dividend Yield: 10.63%
Foreign Dividend Withholding Tax Rate: 0%
Sector: Banking
Country: Colombia

3.Company: Statoil ASA (STO)
Current Dividend Yield: 11.33%
Foreign Dividend Withholding Tax Rate: 25%
Sector: Oil
Country: Norway

4.Company: Banco de Chile (BCH)
Current Dividend Yield: 16.51%
Foreign Dividend Withholding Tax Rate: 35%
Sector: Banking
Country: Chile

5.Company: ING Groep NV (ING)
Current Dividend Yield:  6.30%
Foreign Dividend Withholding Tax Rate: 15%
Sector: Banking
Country: The Netherlands

Notes:

a. Foreign Dividend Withholding Taxes will reduce the effective Dividend Yields shown above.

b. Dividend yields noted above are as of Aug 28, 2023. Data is known to be accurate from sources used. Please use your own due diligence before making any investment decisions.

Disclosure: Long CIB, ING and BCH

Diversification Is Necessary Because Market Leadership Changes: Chart

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Diversification is one simple way to reduce risk. A well-diversified portfolio among various asset classes tend to perform well over the long run. Another reason why diversification is necessary because market leadership changes over time. A few years ago we discussed this topic in my post titled The Largest 10 US Stocks at the Start of Each Decade. With that brief introduction, let’s review the below chart that shows why diversification is necessary:

Click to enlarge

Source: Putnam Investments

A classic example of this scenario is S&P 500 was the top performer in 2021. But the following year cash earned the best returns while large cap companies(LCC) declined by over 18%.

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard S&P 500 ETF (VOO)
  • SPDR Portfolio S&P 500 ETF (SPLG)
  • Vanguard Total Bond Market ETF (BND)
  • Vanguard MSCI Emerging Markets ETF (VWO)
  • Vanguard Developed Markets Index Fund ETF(VEA)
  • iShares TIPS Bond ETF (TIP)

Disclosure: No positions