Super savers, spend your money

Life lessons from Norm Rothery plus your usual dose stock picks

  0 Premium content image

by

Online only.

  0 Premium content image
(altrendo images/Getty Images)

(altrendo images/Getty Images)

Some New Year’s resolutions survive only a few days before ingrained habits overwhelm them. If your resolutions have already given up the ghost, get back on the wagon and try again.

It’s belt tightening time for those facing mountains of unpaid holiday bills.

But MoneySense readers often suffer from the opposite problem. That is, they save too much. They’re part of a merry band of frugal folk who have bulging banks accounts. Some of them even have more money than they’re likely to spend in several lifetimes.

The super savers should resolve to ramp up their spending.

They might eat out more often or go to a few shows. Alternately, they could visit a tropical island and avoid the worst of the winter. More significantly, they might pack up and move to live in one of the Best Places in Canada.

A few savers are constitutionally incapable of spending money on themselves. But they can help their loved ones. For instance, they might provide a good education to their children or help them buy their first house. Both can cost a small fortune these days.

Alternately, giving money to charity can be highly satisfying. If you’re looking for a few good causes, check out the Charity 100.

It might be hard, but if you’re a super saver, try to relax and spend more in 2015. Check MoneySense’s Spend section regularly for new products that are worth your money.

I hope everyone has a happy, healthy, and prosperous New Year!

Safer Canadian Dogs

Investors following the Dogs of the Dow strategy want to buy the 10 highest yielding stocks in the Dow Jones Industrial Average (DJIA), hold them for a year, and then move into the new list of top yielders.

The Dogs of the TSX works the same way but swaps the DJIA for the S&P/TSX 60, which contains 60 of the largest stocks in Canada.

My safer variant of the Dogs of the TSX tracks the 10 stocks in the index with the highest dividend yields provided they also pass a series of safety tests, such as earning more than they pay in dividends. The idea is to weed out companies that might cut their dividends in the near term. Just be warned, it’s a task that’s easier said than done.

Here’s the updated Safer Dogs of the TSX, representing the top yielders as of Jan. 6. The list is a good starting point for those who want to put some money to work this week. Just keep in mind, the idea is to hold the stocks for at least a year after purchase–barring some calamity.

Name

Price

P/B

P/E

Earnings Yield

Dividend Yield

BCE (BCE)

$53.71

4.18

18.02

5.55%

4.60%

CIBC (CM)

$100.36

2.27

12.77

7.83%

4.11%

Bank of Nova Scotia (BNS)

$65.54

1.77

11.52

8.68%

4.03%

Rogers (RCI.B)

$45.60

4.47

17.21

5.81%

4.01%

National Bank (NA)

$50.05

1.94

11.48

8.71%

4.00%

Potash Corp (POT)

$41.76

3.53

23.88

4.19%

3.97%

Bank of Montreal (BMO)

$82.55

1.71

12.82

7.80%

3.88%

TELUS (T)

$42.02

3.16

18.43

5.43%

3.81%

Royal Bank of Canada (RY)

$80.70

2.39

13.41

7.46%

3.72%

Power Corp of Canada (POW)

$31.72

1.35

12.11

8.26%

3.66%

Source: Bloomberg, Jan. 6, 2015

Notes

Price: Closing price per share

P/B: Price to Book Value Ratio

P/E: Price to Earnings Ratio

Earnings Yield: Earnings divided by Price, expressed as a percentage

Dividend Yield: Expected-Annual-Dividend divided by Price, expressed as a percentage

As always, do your due diligence before buying any stock, including those featured here. Make sure its situation hasn’t changed in some important way, read the latest press releases and regulatory filings and take special care with stocks that trade infrequently. Remember, stocks can be risky. So, be careful out there. (Norm may own shares of some, or all, of the stocks mentioned here.)

New & Noteworthy

Tobias Carlisle discusses Deep Value

Check out Mr. Carlisle’s talk, which focuses on value investing and his new book Deep Value.

Just For Fun

The Super-Short Workout

Apparently you can get by with a one-minute workout. Who knew?

The answer to the challenge from last time is “coniums.”

Leave a comment

Your email address will not be published. Required fields are marked *