Taking a page from top funds
Brenda MacDonald, 55
Occupation: Independent financial counsellor
Portfolio : Russel Metals,, Brookfield Asset Management, Power Corp., Royal Bank, National Bank, Goldcorp, Toromont, TransCanada, Enbridge.
No fan of mutual funds
Ms. MacDonald doesn't like mutual funds, not just because of the hefty fees, but because she figures you can get the best of what they offer for free. "You can go to the globefund website, look at the Top 10 holdings of all the big blue-chip funds, and then rather than pay fees, just buy the companies yourself." What's wrong with owning the funds themselves? The big funds often hold well over a hundred companies, and that inevitably includes many dogs, she reasons.
Her Approach
If a company appears in the Top 10 list of the best funds, then it's a good company. "By picking the top picks of the best funds, you're benefiting from their expertise."
The Deal with Dividends
Ms. MacDonald favours dividend-paying stocks. "People say buy-and-hold doesn't pay, but it does, especially if you're reinvesting your dividends because you're buying stocks when they're cheaper."
Fixed Income
Over half of her portfolio is in fixed income, including GICs, and laddered corporate and provincial bonds. "I want to make sure I can sleep at night and I know no matter what, the principal is guaranteed."
Her Favourite Read
Ms. MacDonald says she's learnt more from the Canadian MoneySaver publication - for which she is a long-time contributor - than from all the financial planning courses she's taken.
Best Move
Her fondness for sound corporate bonds introduced her to Russel Metals Inc., a metal processing and distribution company. She began investing in the company in 1996, when it paid a 6-per-cent dividend. She sold half her holdings in 2004 for a triple, and the shares closed yesterday at $18.20, and yield 5.5 per cent. "It's not a glamorous name, but it's been around for over 100 years ... and they have a really good track record for paying out dividends and for growth."
Worst Move
She paid $78 (U.S.) for Apple about two years back and sold it a year ago for $91. "The dollar was going down, it doesn't pay a dividend, and I was getting out of everything in the U.S. because I thought Canada would do better," she says. "I've kicked myself a few times since." It closed yesterday at $201.55.
Advice
"It's not how much money you make, it's how much you spend that determines your financial health and future."
Want to share your strategies?
Contact tony.martin@sympatico.ca
