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Mutual Fund News


Special to The Globe and Mail

Gary Poxleitner, 47

Occupation: Consulting engineer


Includes shares in Bank of Nova Scotia, Enbridge Inc., Telus Corp., TransAlta Corp., TransCanada Corp., BCE Inc., 3M Co., and Canadian Pacific Railway Ltd.; also has bond exchange-traded funds, such as the Claymore 1-5 Year Laddered Government Bond ETF

The investor

"I began investing at the age of 19 when I met someone at a kiosk in a shopping centre and invested some of my student loan money in mutual funds," says Gary Poxleitner. "After two years, the funds weren't going anywhere, so I began learning about investing.

"I realized that the MERs [management expense ratios] were going [into the coffers of the fund company] so I sold my funds, purchased shares in the fund company - and they made significant growth!" Mr. Poxleitner exclaims. "It turned into one of my best moves."

How he invests

He invests in blue-chip companies that have consistent earnings and pay dividends. At the top of his list are those with well-known products and dominant market shares. He buys when they fall out of favour - as indicated by a price-to-earnings ratio under 15 (among other things). Debt charges should not be too onerous in relation to cash flow, either.

His positions are held for a long time. Dividends are reinvested, either through a dividend reinvestment plan (DRIP) when the company has one, or without if not.

The early start as an investor and ongoing compounding of returns is paying off. He reports holdings of approximately $420,000 in blue-chip stocks. Along with his bond ETFs and other assets, his net worth is close to $720,000.

Best move

"I had $30,000 cash inside my RESP and invested it in Bank of Nova Scotia stock in April, 2009, during the market collapse. I was confident that I couldn't go wrong with a dividend yield above 6 per cent and a strong company. It has made a good contribution to my kids' education."

Worst move

"In my early years I invested in mutual funds with high MERs and front-end sales loads."


"Invest in well-established companies that you are familiar with, have yearly growth, and share some of their earnings as dividends. Avoid purchasing on rumours; do your homework."

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