This is my January 2020 FFJ Portfolio update. The portfolio was created in January 2017 for the purpose of demonstrating how investing in high quality companies with competitive advantages and with a record of consistently increasing dividends can assist investors in reaching their long-term financial goals without the need to speculate or to chase dividend yield.
As an investor with a long-term investment time horizon focused on the:
- underlying fundamentals;
- valuation level;
- competitive advantages, and;
- growth prospects
of a company, I have been extremely reluctant to deploy new money over the past several months. As a result, I have written very few articles of late (articles archive can be found here) because I have not deemed the companies of interest to me to be fairly valued.
On January 23rd, however, I did write an article on Intact Financial Corporation (IFC). The IFC shares I purchased merely replaced the shares held in a Registered Education Savings Plan which I had to sell. Fortunately, the shares I acquired to replace those sold were at a lower price so I was able to increase my exposure to the company; the shares sold and acquired were in accounts for which I do not disclose details.
Were my investment goals and objectives different, I might look to invest in overvalued stocks in the hope of being able to quickly flip them for a profit. I do not, however, view this as a prudent investment strategy and am reluctant to even term this an ‘investment strategy’. A ‘speculative strategy’, in my opinion, is a more appropriate term.
Although a few investors may exhibit consistent success as successful active traders, I am certain I would fail miserably were I to adopt the practice of frequently buying/selling shares. I spend virtually no time monitoring intra-day stock price fluctuations and readily admit I have no idea how a company’s stock price is going to behave in the short-term.
Rather than being an ‘active’ investor I have found success in being a ‘lazy’ investor..
I think Monish Pabrai hit the nail on the head when he said:
‘The single biggest advantage a value investor has is not IQ. It is patience and waiting. Waiting for the right pitch, and waiting for many years for the right pitch.’
So….as I patiently wait for high quality companies I currently deem to be overvalued to retrace to attractive/fair valuation levels, I continue to have confidence that the high quality companies in which I have exposure will not give me cause for concern….even if we experience a broad market correction.
Shares held in the FFJ Portfolio can be accessed here.
NOTE: The month end holdings do not always accurately reflect my exposure to certain companies. All dividends are set up for automatic dividend reinvestment and in instances where dividends are received close to month end (eg. The Bank of Nova Scotia, The Toronto-Dominion Bank), my actual exposure is slightly greater than that reflected on the month-end reports.
The dividend income generated in the FFJ Portfolio can be accessed here. These reports accurately reflect the dividend income received.
Within the next few days I will be departing for Costa Rica. Shortly upon my return I will be in British Columbia for a couple of weeks of skiing.
I certainly have no intention of regularly monitoring equity markets during my absence. If, however, I learn of a major market pullback during my vacations and stocks on my ‘watchlist’ come into my ‘buy zone’, I may make some time to initiate purchases. I will not, however, be in a position to write articles to provide a timely disclosure of my purchases.
I wish you much success on your journey to financial freedom!
Note: Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].
Disclaimer: I have no knowledge of your individual circumstances and am not providing individualized advice or recommendations. I encourage you not to make any investment decision without conducting your own research and due diligence. You should also consult your financial advisor about your specific situation.
I wrote this article myself and it expresses my own opinions. I am not receiving compensation for it and have no business relationship with any company whose stock is mentioned in this article.