What a volatile market! August saw some insane movements – from a 1000-point Dow Jones Industrial Average (DJIA) drop at market open on Aug 24th, to a stunning recovery a couple of days later. Market volatility has been expected for a while now and with the Fed on the verge of raising interest rates, it provides a great opportunity for long term investors to initiate/add to positions in the midst of the panic. There are equal number of proponents and opponents for interest rate hikes by the Fed. One thing for sure is that even if they do raise the rates, it will be a small token 25 basis points raise and the rates are not going to shoot up anytime soon. The world still stares deflation in the face with a strong US$ and collapse in the commodity markets, coupled with a weak demand from China.
On the Canadian front, after having two 25-basis points rate cuts in Jan and Jul of this year, some economists are already predicting another rate cut to take effect during the September meeting. The interest rates are already at record low at 0.50% and any rate cut will continue fueling the housing market bubble in Canada in an effort to prop up the economy, now that Canada is in a recession.
Outlook for September 2015
In February, we started putting together an index-based ETF portfolio for my wife’s portfolio. In order to avoid buying at a market top, we started off with a modest amount of funds put to work. We will continue building our position over the course of the year. The portfolio details are shared here. As for my portfolio, I hold a decent amount of cash as discussed in my 2015 goals post. I am well above the 3-5% of cash position target to take advantage of market corrections.
I have added some companies to my portfolio in the last couple of months and I am spread thin. For the remainder of the year, I intend to add and build on the positions instead of adding new names (unless something un-passable comes up). A lot of the companies are attractively priced and the following table details my portfolio holdings and some metrics associated.
I am expecting dividend increase announcements from the following companies in my portfolio.
- Realty Income (O) – last increase was 0.26% in Jun 2015.
- Ventas Inc (VTR) – last increase was 8.97% in Dec 2014. After the recent spin-off of Care Capital Properties (CCP), Ventas has promised a combined dividend increase between the two companies will be 10% higher. An official dividend increase announcement is expected soon.
What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist? What do you think of the current market levels and buying here? Make sure to leave a comment below as I value reading your questions and comments.
Photo Credit: mendhak