Jan 022018
 

Hello friends. It’s a new year. πŸ˜€ My investment strategy for 2017 was simple; to buy dividend growth stocks and alternative investments. Dividend stocks and alternative assets tend to grow in bull markets but also hold up well in recessions. The plan is to earn respectable returns while reducing risk to the downside. Here are my 2017 results.

Average return on investable assets = 18.9%

Overall I am quite thrilled with this outcome. πŸ™‚ The broad Canadian stock market index (S&P/TSX Composite) returned about 9% in 2017. I remain convinced that a dividend based investment strategy works better than index funds.

Another variable that worked to my advantage is geographical diversification. Most equity markets in foreign countries performed extremely well. For example, the S&P 500 index in the U.S. gained 20%. Holding U.S. and European stocks helped me a lot this year.

The Best of 2017

Liquid’s Top 10 Best performing stocks of the year:

  1. Canopy Growth Corp (WEED) +213%
  2. Match Group Inc (MTCH) +82%
  3. Caterpillar (CAT) +64%
  4. Avigilon Corp (AVO) +63%
  5. Dollarama (DOL) +59%
  6. Amazon.com (AMZN) +58%
  7. Premium Brands Holdings (PBH) +55%
  8. Deere and Co (DE) +55%
  9. Blackberry (BB) +54%
  10. Netflix (NFLX) +53%

The Worst of 2017

Liquid’s Top 10 Worst performing stocks of the year:

  1. Crescent Point Energy (CPG) -45%
  2. High Liner Foods (HLF) -23%
  3. Cineplex (CGX) -22%
  4. Cameco Corp (CCO) -14%
  5. Viacom (VIAB) -10%
  6. Halliburton (HAL) -8%
  7. Keyera Corp (KEY) -7%
  8. Boardwalk REIT (BEI.UN) -7%
  9. Target Corp (TGT) -6%
  10. Goldcorp (G) -5%

We can’t win them all. But as long as we get it right most of the time then everything will work out eventually. πŸ™‚

 

.

2017 Investment Breakdown

All returns mentioned below are internal rate of returns (IRR) unless otherwise stated.

TD PortfolioΒ 
Annual return = 16.3%
Net Asset Value = $190K

This includes myΒ entire RRSP portfolio, most of my TFSA and a small cash account all held within TD Direct Investing. The combined return over the last 12 months was 16.28%.

I hold about 15 individual securities in my TD TFSA, and another 30 in my RRSP account. If you are interested to see exactly what they are I’ve listed all the stocks onΒ my portfolio page.Β πŸ˜€

Note: Past performance doesn’t guarantee future results and readers should not take any stocks I buy as recommendations.

 

Interactive Brokers – Non Registered Portfolio
Annual return = 25.3%
Net Asset Value = $158K

This is where I have my margin account. I hold Canadian, U.S. and U.K. securities in here – mostly preferred stocks and dividend stocks due to the preferential tax treatment of their returns. One reason the return is so high in this portfolio is because I am using leverage (borrowing money to invest.)

Β .

Antrim Balanced Mortgage Fund
Annual return = 6.2%
Net Asset Value = $20K

This is a mortgage fund that’s held inside a TFSA. It’s a fixed income investment that offers steady and predictable interest payments every quarter. This is my largest mortgage investment corp (MIC) but I also hold smaller positions in publicly traded MICs in my TD portfolio.

Related Post: What are Mortgage Investment Corps?

If the stock market tumbles in 2018, private MICs such as Antrim should not be negatively affected. Below is a chart of the fund’s performance over the last 15 years. Despite a 38% drop in the stock market during the 2008 financial crisis, this mortgage fund continued to earn positive returns for investors throughout the recession.

MICs tend to underperform stocks in a bull market. But their purpose is to provide stability during tumultuous times. This is why I buy and hold them. Overall they represent a small portion of my investment portfolio (about 10%) but they are an invaluable part of my strategy to not get ruined in the next market crash.

 

Lending Loop
Annual return = 11%
Net Asset Value = $22K

As discussed in my post last week this is my newest investment with only one year of return history. I think national GDP growth will slow down next year to 1% which may cause more delinquencies for private borrowers but we shall see what happens. Overall I am happy with the P2P lending platform.

 

Concluding Comments

Overall I have about $390K of investable assets which are all outlined in detail above. Additionally I have farmland equity worth $250K, and real estate equity in my condo worth $70K. This gives me a total net worth of about $700K after subtracting consumer debt. One thing I want to get into more is emerging market equities. This can be done by purchasing funds such as theΒ iShares Core MSCI Emerging Markets ETF (XEC) in a discount brokerage account.

The majority of my investments have delivered returns that have either met or exceeded my expectations. I hope everyone had a great year and that 2018 will bring us continued prosperity and freedom. πŸ˜€

 

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Random Useless Fact

 

 

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Guy
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Guy

Average return on investable assets = 18.9%
S&P 500 index in the U.S. gained 20%

So you didn’t beat the market. Are we supposed to be impressed?
All your complex alternative diversification just added more risk and less return.
Plus no mention of your cryptocurrency plays.

Rafia
Guest
Rafia

US is not the market, and above 18% is not impressive? Like, what are you?
For crytpocurrency, read his previous posting, duh.

Guy
Guest
Guy

The S&P is the most quoted de facto of “The Market”.
It’s the most developed index in the world with ~50% of its return derived ex-USA.
So yeah, it kind of is the market.

Above 18% isn’t impressive if a single low-risk index fund can give you 20%.

Tom
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Tom

Guy,

You’re such a troll, Liquid is Canadian so in CAD the S&P 500 returned 14% as the USD depreciated 6% over the year.
In what world is the S&P 500 considered a low risk investment? i actually laughed out loud when i read that but i would love to hear your explanation. You said it yourself, “everyone is a genius in a bull market”lol

RICARDO
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RICARDO

@Guy You should be on here expounding on your great accomplishments rather than belittling someone who is/has taken the time and made the effort to put their investment ideas forward to help others. If I had known you could beat the market all the time, every time I would follow no one else

RICADO

Guy
Guest
Guy

Ricardo — I wouldn’t suggest following anyone.

Rafia
Guest
Rafia

clearly you are a follower of this blog as you responded to each of our comments in here.

Dividend Earner
Guest

@Guy You cannot compare Apple and Oranges. Your world is probably the US but if you look at his holdings, many are Canadian Stocks, so his benchmark is a blend of both the Canadian and US index. It’s not that simple to just go and buy US when you start considering the exchange rate impact.

I also don’t believe in comparing just one year. It’s your overall progress against a benchmark for like 10 years that really tells your portfolio management skills.

Guy
Guest
Guy

You cannot compare Apple and Oranges.

Sure you can — when you use risk as the metric.

You can pick a low-hanging Apple which will provide ample nutrition, or you can climb a ladder to try and pluck a canopy-level orange which might not give you the extra nutrition to justify the extra effort of climbing the ladder (and requiting a ladder in the first place) as well as the possibility of falling.

But what liquid is doing is making fruit salad…and still coming up short.

I doubt he can even quantify his risk.

Remember, everyone is a genius in a bull market.

Finance Journey
Guest

Hi Liquid,
You are Canadian, so the better comparison is TSX composite index. Therefore, you’ve hand fully beat the market by wide-margin. Great achievement!

2016 was better year for Canadian investors than 2017. According to BNN, Canadian market performance is rank 72 out of 93 markets, TSX had a low return compare to US and other markets.

I hope 2018 will be good year for everyone πŸ™‚

Cheers,

Guy
Guest
Guy

You are Canadian, so the better comparison is TSX composite index.

This makes absolutely ZERO sense!! I’m Albanian, should I hitch my returns to ONLY the Albanian stock market?! It collapsed 5 years ago so even a 1% return would be a great achievement! LOL Economies are now GLOBAL – it’s inane to limit financial thinking to sovereign borders.

GYM
Guest

Congrats liquid you did great! I can’t believe WEED is up 200% plus!

My investment portfolio was up 12% but I’m still happy with that!

Dividends Diversify
Guest

Nice work liquid. Here’s to another good year in 2018. Tom

Sameer
Guest
Sameer

Good job my friend. I am glad that I found your blog few months back and has been visiting it constantly. You have thought me that you don’t have to be rich to invest wisely or pay some fund manager to invest for you.

Thanks again.

Dividend Earner
Guest

Well done on the performance. TD shows your last 12 months rate of return and I am curious if it can show the rate of return since inception? How are you doing over a long period?

I like the heatmap for the sector breakdown, what tool did you use to generate it?

I too believe a good dividend growth strategy can beat the index. I currently compare my portfolio performance since inception against 50% TSX and 50% SP500. On average since 2009, I beat it by 2% – 3% depending on the day. It’s too easy to beat the Canadian index with 50% of my portfolio in US stocks so I try to match the US content for the index comparison.

Lina
Guest
Lina

Great job Liquid!!
Thank you for sharing and best of luck for 2018.

PwedePadala
Guest

Thanks Liquid Independence! I’ll keep following your blog. Because of your blog I added MIC in my portfolio and was surprised with the outcome. I also did my research before investing like you’ve always thought the readers. This year I’m trying WEED stocks with my extra moola. Cheers for more success this year.

AlW
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AlW

Guy how did he add more risk? He diversified his portfolio. In fact when I examine Liquid’s portfolio holdings I’m most impressed by the amount of diversification: real estate holdings, alternative investments, stocks, MICs (bonds) etc.

The only thing I’d add is the equity in the farm/condo… you could easily recapitalize the farm mortgage and draw down some equity and put it back out at a higher rate of return. Likewise, if you’re able to claim a home office (write off against your non-registered investing gains) you could recapitalize the mortgage on the condo and reinvest. Doing this would increase your tax deductible interest payments on both properties while potentially creating more revenue through different income streams.

RichestManInLondon
Guest

hahahaha @ the comment troll

seriously though, I’ve seen quite a few people with Canopy Growth Corp in their portfolio. Jealous lol.

It looks like it has the ingredients to continue to grow too which is kinda scary!