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Mutual Fund News


Special to The Globe and Mail


Occupation Chartered accountant

The portfolio Includes shares in Bank of Montreal, Royal Bank of Canada, Bank of Nova Scotia, Fortis Inc., RioCan Real Estate Investment Trust, Rogers Sugar Inc. and Bird Construction Inc.

The investor Like many investors, Dan Wesley started out investing in mutual funds at a bank. However, after a few years, he became dissatisfied with how the management fees were cutting into returns.

How he invests Mr. Wesley then cashed out his funds and opened a low-cost, online brokerage account. At the top of his buy list were bank stocks. "For me, it's been more profitable to buy bank stocks rather than their products," he says.

The banks have long histories of earnings growth and rising dividends. For the past two decades, financial deregulation has allowed them to expand into the trust, investment brokerage and other financial sectors in Canada.

He recently added to his positions in Bank of Montreal and RBC. "They have gone up significantly," notes Mr. Wesley, "but my timeline is so long that I think there is still plenty of room to grow in the long run and I think they'll be able to handle any possible downturns in the economy."

Diversification is important, too. Mr. Wesley has purchased stocks from other industries - as long as the companies have "a solid history of paying dividends" and the amount of income paid out as dividends is not too high.

It's also important that some of the companies have a history of increasing their dividends because they will help offset inflation in his later years.

Best move "Buying the big banks."

Worst move "Rogers Sugar - the company has been hit hard with production issues."


"Invest for the long term and don't let the emotions of shortterm market swings affect your decisions."

"The [tax-free savings account] is a gift from the government ... that has huge potential for younger investors."

"If you're not comfortable investing in different companies, a low-cost index fund is a good alternative."

Want to share your strategies? E-mail

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