Investment Ideas – Great Capital Allocators

A follow-up in the Investment Ideas series of posts. Be sure to check out my earlier post on Family Owned Businesses as a method of screening and finding good investment opportunities in this series.

Good capital allocation is the most important trait for a company. Generally speaking, a company has a handful of options:

  • Reinvest in the business
  • Pay down debt
  • Pay dividend
  • Buyback stock
  • M&A to grow the business
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2019 Top Investment Picks – Q1 Update

At the beginning of the year, I put together a list of Top Investment Picks for 2019 from the investment community and track them on this website. This is just meant to be a fun exercise to see how the picks do. As part of the process, I intend do provide quarterly updates on the picks to see how they are doing. This is the update after Q1.

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Investment Ideas – Family Owned Businesses

Lately I stumbled upon a few research reports that concluded what I had just heard as off-the-cuff comments about the advantage of owning stocks in family owned businesses. I had heard that there was research on the topic, but had never seen actual hard, cold data on this front until recently. At a basic level, the argument is fairly straight-forward: family-owned businesses have a better track record at taking a long term view and taking better decisions for the survival & growth of the business. As a result, the stocks in these companies consistently outperform their peers in the market, thus generating alpha for shareholders.

There are various slightly different terms used to indicate this kind of company control. Commonly used ones are owner-operator, or family-owned, or founder-run businesses. But no matter the term, the objective is the same: Build and grow a business; leave a legacy and/or continue the legacy of the business after inheriting from family members.

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MultiAsset ETFs – VGRO vs XGRO vs ZGRO

The Canadian ETF space has been undergoing some intense competition over the past few months. The big problem for retail investors has been to mix and match various ETFs to find a good balanced diversified multi-asset portfolio. How much weightage do you give stocks & bonds, how much per geographical region, hedge currencies or not….the choices are endless and overwhelming. Also, this came with the problem of rebalancing regularly and making the appropriate purchases on a regular basis.

The Canadian ETF providers have thus launched the all-in-one multiasset ETFs which addresses these problems and fills the gap in the market. I have received a few questions on this front, so I will try to provide a simple overview on this front. While there are different ETFs with different weighting based on risk tolerance (growth vs balanced vs conservative portfolio ETFs), this post will look at the growth-oriented series, since that seems to garner the most attention from the readers.

The three comparable growth multi-asset ETFs compared in this post are:

  • Vanguard Growth ETF Portfolio (TSE: VGRO)
  • iShares Growth ETF Portfolio (TSE: XGRO)
  • BMO Growth ETF (TSE: ZGRO)

All three have an approx 80/20 stocks/bonds approach.

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Top Investment Picks for 2019

As the new year rolls out, its time to share the annual investment pick contest that I run. This is the 4th year in the running. This is merely meant to be a fun experiment to run and collect top investment picks for 2019 from a community of investors I regularly interact with. There are still some great picks from the 2016, 2017 & 2018 top picks, and I invite you to check them for ideas. Remember that investing is a long game — so, focusing on short intervals like a year is not prudent — even though this contest focuses on one year return. Plenty of older picks may present long term value.

The rules were simple: Pick one investment (stock, bond, fund, currency, commodity, cryptoasset or any other form of investment security), and present a short & quick investment reason behind the pick. I will track this progress over the year and provide quarterly updates on this blog.

Top Investment Picks for 2019

Before I present the picks, I would like to remind the readers that these are simply picks based on current outlook and each investor should not take this as investment advice. If you decide to pursue these investments, please do your due diligence before investing in any of the securities mentioned.

Without further ado, here are the top picks from the investing community for 2019.

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