Here are some recent stocks I bought for my portfolio — all part of my plan to one day become financially independent.
Please keep in mind that I’m posting this for information/entertainment purposes only. In no way am I suggesting that you should buy these stocks as well. I honestly have no clue what I’m doing and you’d be better off seeing an investment professional. Honest!
I’ve invested in Canadian banks before, but never RBC — so this is new territory for me. Given the state of the market right now (hint: it’s really bad), it’s been difficult (to put it mildly) to know where to put my money. Everything just seems to be going down. To make matters worse, if you’re a Canadian like me, buying American stocks has become prohibitive now that the Loonie is trading at its lowest level in decades — which is around 70 cents American. The risk here being that future capital gains might be offset by a rebounding dollar. This essentially means I’m limited to the Canadian market until the dollar goes back up and stabilizes. Unfortunately, the bulk of the decent dividend paying stocks in Canada are in the resource and energy sectors, which is where most of the hurt in the market is happening — Oil companies being the hardest hit. The end result is that there aren’t very many stocks on the Toronto Exchange whose futures are fairly certain AND can be expected to continue paying decent dividends over the long term.
Of course, bad news in the market can actually mean good news if you’re in it for the long haul, since this means that there are deals to be had. With this in mind, Canadian banks have historically been good investments. The biggest five banks in Canada survived the global financial crisis in 2007-08 relatively unscathed. Although I’m hardly an expert, it’s hard to imagine that things will be different this time around. It also just so happens that RBC is Canada’s largest bank and has a pretty solid record of increasing its dividends — with the only recent exception being during the time surrounding the aforementioned financial crisis.
Which isn’t to say that Canadian banks don’t have their work cut out for them. McLeans recently put out an article saying that 2016 was going to be a difficult year for Canadian banks. Their main argument being that growth in the banking sector is slowing and expenses are rising — all the while seeing less profits from the tanking energy sector and increasingly fragile housing market. To quote the article, it’s a “perfect storm”. Whether these predictions actually pan out, however, remains to be seen.
Here are RBC’s market info as of Jan 25, 2015 (taken from Yahoo.com)
52wk Range: 64.95 – 81.53
Market Cap: 99.62B
Div & Yield: 3.16 (4.56%)