February 18, 2018

Friday’s markets saw the S&P 500 about unchanged and Toronto up 0.3%.

Fortis Inc. jumped 3.75% to $42.08 as the market perhaps decided that its recent slide was over done.

Kinder Morgan Canada Ltd was up 4.45% to $19.97 after it got some positive news about the ability to start a small part of its Trans Mountain pipeline construction efforts. This one is not on our list but I mentioned last May 28 and 24 that I grabbed some shares at the IPO. It has also been included in my own portfolio which I update occasionally. I am a bit surprised to see that I am now up 17% on Kinder Morgan plus a bit more for the two little dividends received. It is not a stock that lends itself to value analysis since so much depends on political approvals. I am not sure if I will continue to hold or maybe take my gain and possibly buy back on dips. I think the pipeline has to go through but certainly much opposition remains which will likely cause the stock to be volatile.

Yesterday, I sent out the latest edition of our free newsletter. The email list for that is separate. If you did not receive the email you can add your email to that list at the following link. The newsletter featured a description of the new Vanguard Canadian ETFs that allow a balanced globally diversified portfolio to be bought with just one security. It’s similar to certain diversified balanced mutual funds except with far lower fees. It may not be of as much interest to our paid subscribers who are presumably comfortable picking individual stocks and ETFs. This newsletter also discussed my view that businesses and investors do get some very good tax breaks. That view may not be popular with very many business owners or investors but its a timely topic. In any case, while some people may view tax breaks as loopholes to be closed others may be more interested in how to take advantage of such legally available tax breaks.

I mentioned perhaps a couple of months ago that I wanted to get some international exposure and would probably buy some international ETFs. On Friday I looked at buying the rest of developed world ETF under symbol VIU on Toronto. This one is included in my recent article about setting up a global ETF portfolio. But since I wanted to reduce my U.S. cash rather than Canadian, I instead decided to buy the country-specific ETF for Austrailia that trades as EWA in New York and which is included in my Global ETF list and which happens to have a reasonable P/E ratio as well as a high yield. The distribution is paid only twice yearly and was high in 2017 but I don’t know if it will remain that high. The distributions on ETFs can be somewhat erratic. Also I am not sure if this distribution will be subject to the 15% U.S. withholding tax even when held in an RRSP. I was looking for some international exposure and whether or not there is a withholding tax on the distribution was not something that would effect my decision on this one. For reasons that I will not get into at this time, I have a particular interest in Australia at this time.