Volatility has increased so far in April as mixed economic news has added some pessimism to the general market outlook and a decrease in patience as investors become frustrated with the waiting game on interest rate cuts. Rate cuts generally serve as a wind at our back for both the economy and markets and as the chart below suggests, we’ve been expecting rate cuts for much of the past year. What remains to be seen is when will these rate cuts start and to what pace will the Fed and Bank of Canada act. We are watching this closely and continue to position our portfolios appropriately knowing its highly probable volatility persists for the remained of the year.
Interestingly enough the “crystal ball” on interest rate expectations over the last 2 decades has been a foggy to say the least.
Dollarama (DOL) just reported 16% increased sales, 65 new store openings and higher margins due to lower inbound shipping costs. DOL also announced a 30% increase in quarterly dividends.
Costco (COST) also increased its quarterly dividend by 13.7% to $1.16 from $1.02.
Other companies increasing their dividends by more than 10% so far this year include: Intact Financial, CN Rail, Thomson Reuters, Danaher, Walt Disney, and Prologis.
These are just a couple highlights on a couple of the tremendous businesses we own.
On the fixed income side of the portfolio it is nice to see that our patience and persistence has began to pay off. A number of the bonds and fixed income strategies in the portfolio now have a yield to maturity in excess of 5% . Pender corporate bond fund for instance, and of this writing, has a current yield of 5.6%, yield to maturity of 8.0% and a duration of 3.8 years. The strategy is also up 10.3% over the last year. It’s great to see the positive impact our fixed income holdings are having in our overall portfolio performance.
Should you have any questions or would like to further discuss your portfolio in greater detail please do not hesitate to reach out to us at boschmanwealth@rbc.com
Have a wonderful weekend.
GO JETS GO!