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Where have all the investors gone? It’s no surprise that “advised” Canadian mutual fund investors are bailing on wealth-building. Most of them sell high fee funds and look for little or no advice. They lose on two counts. And in 2022 even ETF investors have largely bailed on buying growth assets (stocks and REITs) when they go on sale. ETFs are moving to cash ETFs and bonds. I continue to see excitement in the Canadian dividend investor camp (okay, they’re crazy). They want low prices that can bring big dividend payouts. Dividend investors are leading the way in Sunday reads.
ETFs gained in 2022 when mutual funds felt the pain.
From that Advisor Edge post…
At the end of November, Canadian mutual funds had exited $35.6 billion in 2022, or 2% of year-end 2021 assets, according to the National Bank Fund (NBF). A statement Thursday. (Full-year mutual fund data is not yet available.)
“Only money market mutual funds recorded inflows, a sign of the capital-preservation mode that has informed many investor decisions this year,” it said.
During the bull markets of 2021, mutual fund sales hit a dramatic record high of $112 billion, outpacing ETFs for the first time since 2018.
ETFs are back on top
Canadian ETF inflows are back on top in 2022 with net inflows of $35.5 billion in 2022, or 10%, or 2021 year-end assets, the report says.
As part of the strategic positioning, the report said cash-alternative ETFs will be the “major story” of 2022, describing it as “a credit darling” since the launch of such funds in 2013. $15 billion in assets between annual bond sales. CI High Interest Savings ETF was the fund with the highest inflows ($3.2 billion) for the year.
Equity ETFs received $13 billion in 2022, or about 37% of ETF net flows.
(back to Dale)
A move to safety
So while ETF investors added modestly to stocks, there was more movement to safety — cash and bonds. Of course, we should do the opposite – buy high-growth properties when they come on sale. ‘Be greedy when others are fearful’ is the thought of Warren Buffett.
I kept asking the readers – What stocks and ETFs do you buy? That post is from late September. Looking back at the near bottom for 2022. Shares have recovered modestly since posting time. We may or may not lower the price for September 2022. Who knows? But sale prices are good, we know.
On the FindIndependence Hub – How to navigate the coming global recession.
Dividend investors are on fire
While focusing (too much) on dividends may have its drawbacks, there’s no denying that dividend investing leads to good behavior. I’m really glad to see that Canadian dividend investors (friends) are propping up more stocks and higher dividends.
In My Own Counselor, Mark offers weekend reading: Dividends of the FIRE version. Thanks Mark for including me Canadian Wide Mode Stock Portfolio Upgrade.
In Mark’s post, you can find some portfolio and dividend-specific updates for the investment year of 2022. Included in the mixture – Drip investorand at Jordan Money is the master.
Mark also offered Latest portfolio update.
Rob at Passive Canadian Income updates his dividend and portfolio performance in December In this post.
Total for 2022
Year-to-date dividends – $10,692.84
Other passive income year to date – $13,491.23
Total passive income for 2022 —– $24,184.07
Year-end goal – $25,000
Canadian stocks are offering good value these days. Kyle provided A Very good post In MoneySense – Making Sense of the Markets. Kyle covers some good broad market and investment commentary. And in Canadian stocks…
Our current P/E valuation discount relative to the US S&P 500 shows that, as a group, Canadian stocks are significantly cheaper relative to US stocks than they have been in the past.
That’s a crazy good savings rate
Pop in for some inspiration 9 strange things He saved money in his 20s. Bob always had an insane (and good) savings rate. That is certainly one of the keys to building wealth. It’s not what you do, it’s what you keep, then what and how you invest.
You should read mine Personal Finance Book. Actually, it’s very simple and short, it’s a 100o word blog instead of a book.
Here it is Week in Review Thanks to Dividend Hack. Hawk included stocktrades.ca Top Canadian Dividend Monarchs in 2023
Fritz created The Retirement Manifesto Free asset allocation tool.
A few thoughts
We can’t time the markets, but we can control the returns we buy. We can control the weight of our sector. Sectors often limit the income we receive in various economic conditions. We are definitely in regime change. I still like exposure to oil and gas and pipelines and certain commodities.
Accumulators can often ignore noise. Retirees and retirees can still play defense and insist that they get paid (dividends). 2023 may offer some good ones Restructuring opportunities – From bonds to stocks, even some growth names or ETFs.
I will do a post on my personal RRSP portfolio and US stocks. This is craziness…
Chalk up one or two to quality and departmental arrangement.
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Take fear and win…
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