Joël Godin, an elementary school teacher in Trois-Rivières, has always been thrifty. (Picture: courtesy)
SPOTLIGHT ON MY TFSA is a section where individual investors share with us their good and bad investment moves while submitting their portfolio to the analysis of a pro.
(Illustration: Camille Charbonneau)
Age : 30 years | Occupation : primary school teacher
TFSA value : $33,000 | Strategy : individual titles
Good shot : have always been financially responsible
Bad shot : having invested just before the outbreak of the war in Ukraine
Goals : medium term (“depends on the size of the family”)
His advice to the investor starting : educate yourself and avoid pipes
This primary school teacher in Trois-Rivières has always been thrifty. “I finished my studies without any debt.” He and his wife even managed the feat of saving more than $40,000 during the period they worked in Nunavik, in Quebec’s Far North. “I don’t like to consume unnecessarily. I’ve been without a car for a long time and prefer to eat healthy meals prepared at home.”
His parents, complementary in their investment style, were financial role models for him. “My mother, a frugal, was more conservative; my father, who favored private placements and real estate, had a more dynamic approach to investing.” Joël Godin says he has found the right balance between these two conceptions of personal enrichment.
At thirty, he already owned a house and an income property, but the stock market was still pending. “I had tested the waters six years ago, but I quickly withdrew my balls for lack of knowledge.” It was only very recently, at the beginning of February, that he decided to invest in the stock market on his own. “I had saved a significant amount of money and wanted to invest it myself.” A faithful reader of the financial letter Cote 100 and the writings of Philippe Le Blanc, the stockbroker has also refined his strategy on the Simply Wall St website, where he can glean financial information on many public companies.
Guided by his interest in environmental, ethical and governance issues, the neophyte investor selected fifteen stocks for his portfolio. “I made all my purchases within two weeks.” If he is hesitant to invest in ETFs (because of companies he wishes to avoid), he sees their growing growth and this is what motivated the purchase of shares of the firm black rock (BLK, 734.53$), the investment giant and the world’s leading asset manager. “The title had been faltering for some time; the ratios were good and their dividend growing.”
He does the same reading for the title of Visa (V, US$221.77) which offers payment solutions and has been flayed during the pandemic. “The company has a dominant position with good barriers to entry.” This competitive advantage is also what motivated him to open a position in Canadian National, one of the two main railway companies in the country. “Such a network of rails is practically impossible to duplicate. You get a discount when you buy the stock.” Other securities will fill his TFSA, including units of two real estate trusts, Dream Industrial REITs (DIR-UN.TO, $16.14) and Canadian Apartment REITs (CAR-UN.TO, $53.65), focusing on the industrial and residential sectors respectively.
Its investment strategy alternates between value stocks and growth stocks. He likes to buy quality companies that trade at a discount. “I like this quote from Warren Buffett: it’s much better to buy an extraordinary company at an ordinary price than an ordinary company at an extraordinary price.” [It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.] When he’s not supervising a group of children, his own and those from school, the young investor likes to play basketball, go camping and visit his relatives. “Everything revolves around the family pretty much.”
In the eye of a pro
Martin Lalonde, president and portfolio manager at Rivemont, salutes the young teacher’s renewed interest in investing in the stock market. “He seems motivated to learn.” On the other hand, he wonders if with his full-time job and his growing family, the investor will not find it hard to diligently follow the fifteen stocks that make up his portfolio. “I think his diversification is good, he doesn’t stray. But it still requires good follow-up. That’s a lot of headlines for a self-directed individual investor just starting out.”
He notes that the investor has chosen to match his investments so that they are in harmony with his personal convictions. “It’s good, because ultimately you have to be comfortable with the positions you hold.” On the other hand, the portfolio manager notes the few large-cap stocks and the absence of positions in high-growth sectors, such as biotechnologies and technologies (notably semiconductor companies). “The Canadian financial sector with one of the big banks — which are part of a monopoly — would have been an easy choice. I would also have preferred one of the big American technologies instead of the Chinese Alibaba, because of the inherent political risk. He points out that rising interest rates could also represent a headwind for real estate trusts in his TFSA.
He doesn’t believe that building his portfolio before the markets went through turbulence due to the war in Ukraine was a mistake. “In the long term, it won’t make any difference, but to save himself some short-term hassle, he could have considered incremental purchases. Over three or six months, for example.” Martin Lalonde points out that, in any case, if he continues to invest on a regular basis, he will benefit from both the ups and downs of the market. “It is also the job that comes in. The best way to learn is to make mistakes.”
In the current state, the portfolio manager wonders if the composition of the TFSA will allow him to beat the main indices. “It’s an impression, but there is no strong inclination towards a particular sector.” That’s why he wonders if owning one or two ETFs (for example North American ETFs that track the TSX or the S&P 500) didn’t do just as well, without being time-consuming and expensive. energy. Finally, he notes that the investor does not have a lot of cash on hand. “Since he is a fan of Warren Buffett, he will notice that the big investor tends to keep a lot of cash to take advantage of opportunities presented to him by the market.”
If you too would like to share with the readers of The Business your investment strategy in your TFSA and have your portfolio analyzed by a pro, write to us at firstname.lastname@example.org
Joël Godin’s TFSA (approximate value of $33,000)
|Securities||Symbols||% of portfolio|
|Next Era Energy||NO||8.59%|
|Canadian National Railway||CNR.TO||8.06%|
|Alibaba Group Holding||BABA||5.85%|
|Intact Financial Corp.||IFC.TO||5.79%|
|Dream Industrial REIT||DIR-UN.TO||5.24%|
|Canadian Apartment REIT||CAR-UN.TO||4.97%|