Earning season for Q3 is behind us and we are already looking forward to the end of the year. Was it just me or did you feel this year just fly by? The global economy continues to teeter precariously as deflation continues to rear its ugly head following collapse of commodity markets. Across the world, we have seen central banks ease and/or cut rates to stimulate their economies. However, this does not seem to bother the US Fed and they are ready to raise the rates in December 2015 – as they seem to have painted themselves into a corner with guidance and commitments that shouldnt have been made in the first place. Economists who are calling this a serious potential policy error that will simply kickstart the next recession and will need policy-reversal make a really strong case.
All in all, its been an eventful fall so far with the earnings season keeping the media busy. On a personal investment front, the outlook for December 2015 remains the same – stay patient, wait for the market to panic and invest for the long term if an opportunity presents itself.
Outlook for December 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’ve made plenty of new purchases over the course of summer and am spread thin. For the remainder of the year, I intend to add and build on the existing 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.
Some companies such as Power Corp of Canada (POW.TO) and Magna International (MG.TO) provide a fantastic valuation with current P/E of 8.0 and 9.58 respectively. Forward-looking earnings growth also looks good for some companies and I intend to keep a close eye on the valuations while I make any potential moves. Another aspect that I intend to keep an eye on, is the current portfolio diversification. My current portfolio diversification is shown below.
I am expecting dividend increase announcements from the following companies in my portfolio.
- (Maybe) Archer Daniels Midland (ADM) – last increase was 16.66% in Feb 2015
- AT&T Inc (T) – last increase was 2.2% in December 2014
- (Maybe) General Electric (GE) – last increase was 4.54% in December 2014
- Realty Income Corp (O) – last increase was 0.26% in September 2015
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: Sage Solar