January: Stocks are Down, But I Still Beat Both Benchmark with my Picks!


The market didn’t start the way we thought it would in 2014. I was in the camp of optimists believing the rally would continue with the earnings season. But there were some hiccups and the S&P 500 is down -3.56% and the S&P TSX was timidly up by 0.54%. The sad part is the hiccups came from the earnings. In other words: companies didn’t make as much profit as anticipated.

For the superstitious, the first month of the year on the stock market means a lot. When we look at the stats over the past 35 years, the S&P 500 has followed January’s direction 71% of the time (source CNBC). In other words; you have a 29% chance of having a good year (I’ve told you, I’m an optimist! Hahaha!).

But seriously, January is historically a good month on the market. On the other hand, there are some very good Januarys that still finish in very bad years. Can you really make a play on market timing?  Personally, I would rather stay invested and cash in my precious dividends!


How Can You Explain a January Slump?


There are several reasons why January wasn’t the month we expected. The first one, probably the most important factor, is negative forward guidance from 44 companies out of 54 in January. When you look at the overall earnings season so far, both sales and profits beat analysts’ estimate on average for 70% of the companies who have reported their earnings as at January 31st (read the report from Factset).

So the problem is not coming from the previous quarter but it is what is waiting for us in 2014. Most companies which publish forward guidance were well under analysts’ estimates. This is quite a concern for investors as they just got notice that the 2013 party was over. The easy money is gone and we don’t know how well companies will perform in 2014. As a good bi-polar personality, the market had to react brutally and then dropped over 3% in a single month.


The second reason why January was a failure was the fact that emerging markets are not able to push the machine anymore. Their economy can step-up and boost commodity prices as they used too. China, the world’s second largest economy can’t find a solution to get back to double-digit growth anymore. In other words, US companies thought they could count on emerging markets to compensate for their homeland’s mature market forever, this strategy is over. Growth is still there, but at a much smoother pace.


Finally, we can put the blame for a messy January on some profit taking. After such a great year, many investors have the “chicken reflex”. They would rather sell while the market is up and cash out their profits while waiting for another drop. Kudos to them, they made a great amount of profit…. But now is the most difficult question they have to answer; when do you jump back into the market? I know for a fact that some investors have been sitting on the sidelines for the past three years and are still waiting. How much do you think they left on the table?


Nonetheless, I’m very proud of my 2014 picks for the first month. I actually beat both my US and Canadian benchmarks by a lot. At the beginning of each year, I pick 20 US and 10 Canadian dividend stocks to be the best performers for the year. You can read about my results for the previous year here:

Best Dividend Stock Picks 2012 (-1.47% vs VIG (US dividend ETF), + 8.32% vs XDV (CDN dividend ETF)

Best Dividend Stock Picks 2013 (+11.07% vs VIG, + 0.77% vs XDV)


My 2014 Best Dividend Stock Pick is for sale on Amazon.

2014 book cover

Top US Dividend Picks -4.03% (vs VIG at -5.01%)

Best 2014 US dividend stocks

I don’t disclose my stock picks anymore as it is not fair for those who purchase my book and the members of Dividend Stocks Rock who get access to my picks along with real-world portfolios and filtered dividend stock lists.


As you can see, I already beat my benchmark by 1% and my portfolio is paying a 3.10% dividend yield currently. I know it’s only one month so I will not brag too much about my results. I’ve also highlighted in green all stocks that did better than the index. I also have 4 very bad picks which went sideways and dropped by more than 10%. I can’t say that I’m very happy about this and might sell some of them in the upcoming month if I want to continue to keep my advance against the benchmarks.




Top Canadian Dividend Stocks + 0.75% (vs XDV at -2.74%)


Best 2014 Canadian dividend stocks


I’m very proud of my picks on the Canadian stock market as I only have 1 bad pick out of 10. 7 out of 10 picks beat the index and I also have 2 surging stocks among them (hint, I hold one of them in my portfolio, check-out my dividend holdings!). I don’t expect to make any trades at the moment for this portfolio as I’m happy with the performance. Canadian earnings will start to be released very soon and it will give me a good idea of what is going on in the market for the upcoming months!




I know I’m a bit late for this report for January, but I was very sick for 2 weeks, the blog has been left aside so I can get better. I’m now back in business J


Dividend Yield
Payout Ratio
Ex-Dvd Date
TA TransAlta Corp 14.3 8.1 N/A 2/21/2014
CPG Crescent Point Energy Corp 37.66 7.33 488.53 2/26/2014
COS Canadian Oil Sands Ltd 19.86 7.04 81.29 2/19/2014
PWT Penn West Petroleum Ltd 8.16 6.86 294.25 3/26/2014
ERF Enerplus Corp 19.61 5.53 N/A 03/06/2014
BCE BCE Inc 46.06 5.06 65.51 3/14/2014
SJR/B Shaw Communications Inc 24.41 4.51 61.58 02/12/2014
BMO Bank of Montreal 67.62 4.5 46.86 4/29/2014
CM Canadian Imperial Bank of Commerce/Canada 85.81 4.48 44.49 3/26/2014
POT Potash Corp of Saskatchewan Inc 34.99 4.45 64.42 04/08/2014
NA National Bank of Canada 83.2 4.44 38.36 3/25/2014
ARX ARC Resources Ltd 28.49 4.21 256.75 2/26/2014
FTS Fortis Inc/Canada 30.52 4.2 73.33 02/12/2014
BNS Bank of Nova Scotia 60.59 4.12 46.06 3/28/2014
SLF Sun Life Financial Inc 35.43 4.07 61.12 2/24/2014
RY Royal Bank of Canada 68.5 3.94 45.2 4/23/2014
POW Power Corp of Canada 29.6 3.92 64.18 3/19/2014
TRP TransCanada Corp 48.28 3.82 95.52 3/26/2014
T TELUS Corp 38.44 3.75 60.35 03/05/2014
RCI/B Rogers Communications Inc 46.07 3.75 47.35 03/12/2014
HSE Husky Energy Inc 32.5 3.69 59.73 03/05/2014
TD Toronto-Dominion Bank/The 47.89 3.61 46.72 04/02/2014
TRI Thomson Reuters Corp 39.44 3.46 51.28 2/25/2014
TCK/B Teck Resources Ltd 26.29 3.42 61.37 06/11/2014
CVE Cenovus Energy Inc 28.53 3.38 66.97 03/07/2014
AGU Agrium Inc 95.95 3.34 10.31 3/28/2014
ENB Enbridge Inc 46.3 3.02 146.72 02/12/2014
YRI Yamana Gold Inc 10.26 2.7 40.7 3/26/2014
MFC Manulife Financial Corp 19.62 2.64 61.95 2/21/2014
AEM Agnico Eagle Mines Ltd 35.21 2.64 56.18 2/26/2014
BBD/B Bombardier Inc 3.96 2.55 31.66 03/12/2014
TLM Talisman Energy Inc 11.71 2.41 225.2 03/06/2014
G Goldcorp Inc 27.48 2.4 25.04 02/11/2014
L Loblaw Cos Ltd 42.39 2.26 36.8 03/12/2014
SU Suncor Energy Inc 35.64 2.25 27.76 2/27/2014
CNQ Canadian Natural Resources Ltd 36.15 2.21 24.35 03/12/2014
WN George Weston Ltd 76.24 2.17 62.44 03/12/2014
BAM/A Brookfield Asset Management Inc 41.59 2.15 27.21 4/29/2014
SNC SNC-Lavalin Group Inc 45.69 2.02 43 04/02/2014
SC Shoppers Drug Mart Corp 58.3 1.96 36.12 3/26/2014
MRU Metro Inc 63.2 1.89 12.94 2/13/2014
CTC/A Canadian Tire Corp Ltd 94.89 1.85 20.39 4/28/2014
THI Tim Hortons Inc 56.49 1.83 32.35 03/06/2014
CCO Cameco Corp 22.41 1.78 59.42 3/26/2014
SAP Saputo Inc 51.89 1.77 33.54 03/06/2014
CNR Canadian National Railway Co 58.71 1.7 27.72 03/06/2014
SLW Silver Wheaton Corp 23.92 1.58 21.13 04/02/2014
ECA Encana Corp 19.6 1.51 N/A 03/12/2014
MG Magna International Inc 92.09 1.48 17.59 03/05/2014
IMO Imperial Oil Ltd 45.45 1.14 14.67 03/03/2014
ABX Barrick Gold Corp 21.42 0.98 N/A 2/26/2014
CP Canadian Pacific Railway Ltd 163.4 0.86 27.98 3/26/2014
GIL Gildan Activewear Inc 57.82 0.79 13.66 2/18/2014
FM First Quantum Minerals Ltd 19.67 0.59 5.03 4/15/2014
ELD Eldorado Gold Corp 7 0.28 33.85 08/12/2014
VRX Valeant Pharmaceuticals International Inc 148.11 N/A N/A N/A
K Kinross Gold Corp 5.06 N/A N/A 3/19/2014
BB BlackBerry Ltd 10.08 N/A N/A N/A
CCT Catamaran Corp 52.72 N/A 0 N/A
GIB/A CGI Group Inc 33.35 N/A 0 N/A

The post January: Stocks are Down, But I Still Beat Both Benchmark with my Picks! appeared first on The Dividend Guy Blog.

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