Latest news with #TonyDong
Yahoo
27-05-2025
- Business
- Yahoo
If I Could Only Buy and Hold a Single TSX ETF, This Would Be it
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada If I went to prison and the last thing I could do before getting locked up was set my accounts to autopilot, I'd want just a few things taken care of. First, I'd want true diversification: exposure to stocks, bonds, and maybe even some commodities. Second, I'd want a rules-based strategy that didn't require me to check in. And third, I'd want a little bit of leverage. If I'm serving time, I'm not going to be too worried about short-term market volatility. For that role, I'm picking Hamilton Enhanced Mixed Asset ETF (TSX:MIX). Here's why I'd choose MIX over your typical vanilla asset-allocation exchange-traded fund (ETF) from Vanguard or iShares. The beauty of MIX is that it blends three fundamentally different sources of return in one package. Stocks, specifically the S&P 500, represent long-term business growth and profit. You're betting on human ingenuity, productivity, and capitalism. Historically, this has been the engine of wealth creation. Then, there are long-term U.S. Treasury bonds. These shine in different conditions, usually when growth slows and inflation expectations drop. They're not just income-generating assets. They tend to rally when stocks fall, especially in recessions, making them a classic risk-off hedge. Finally, you've got gold. Unlike stocks or bonds, it doesn't generate income, but it tends to hold value during inflationary periods or when there's major geopolitical uncertainty. Think of it as insurance against chaos. Right now, MIX is the only ETF in Canada that puts all three together in a meaningful way: 60% S&P 500 exposure, 20% long-duration U.S. Treasuries, and 20% gold bullion. Each piece is there for a reason, and together, they cover a wide range of macro outcomes. Plenty of ETFs in Canada use leverage to try and boost returns—sometimes cranking it up to two or even three. That might work for day trading, but it's way too aggressive for long-term investors. MIX, however, uses a modest 1.25 times leverage, and it does so in a way that actually makes sense. Let's say you invest $100. Normally, that would give you $60 in stocks, $20 in long-term U.S. Treasury bonds, and $20 in gold. But because MIX uses 1.25 times leverage, your actual exposure becomes $125. That breaks down to about $75 in stocks, $25 in bonds, and $25 in gold. So, rather than just magnifying one asset class, MIX boosts all three in balance. This lets you potentially earn stock-like returns, maybe even better, while holding a mix (pun intended) of assets that don't always move in the same direction. That's what makes the leverage smart. It's not about chasing big wins. It's about squeezing more out of a diversified portfolio without taking on unnecessary risk via over-weighting a single asset. This kind of strategy isn't new in investing circles, but until now, it's mostly been reserved for high-net-worth investors or expensive mutual funds with steep management fees. MIX changes that. Hamilton is putting its money where its mouth is, charging a 0% management fee until April 30, 2026. After that, it'll be a still-reasonable 0.35%. The ETF also uses low-cost index ETFs for its underlying holdings. That means while there is some layering of fees since you're holding ETFs inside an ETF, Hamilton has clearly made an effort to keep costs down by choosing economical building blocks. Just keep in mind that the fund's official MER (management expense ratio) won't be available until a year after launch. When it is, expect it to be higher than advertised, not because of hidden fees but due to the cost of borrowing. MIX uses leverage, and interest expenses from that leverage get factored into the MER. That said, it's no different from you borrowing on margin to gain extra exposure, except Hamilton does it for you, likely at better rates, thanks to institutional access. The post If I Could Only Buy and Hold a Single TSX ETF, This Would Be it appeared first on The Motley Fool Canada. Before you buy stock in Hamilton Enhanced Mixed Asset Etf, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Hamilton Enhanced Mixed Asset Etf wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-05-2025
- Business
- Yahoo
How I'd Transform $7,000 Into a Reliable Stream of Passive Income
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada Lend me $7,000 and I'll pay you back $42 a month, forever. And if we're lucky, that original $7,000 might even grow over time. Sounds like a scam, right? But it's not. It's actually something that's very achievable inside a Tax-Free Savings Account (TFSA) if you pick the right investment. One fund that fits the bill is the Canoe EIT Income Fund (). Here's why it could be a strong candidate for turning a lump sum into steady, tax-free monthly income. is a closed-end fund (CEF) that gives you access to a professionally managed portfolio of about 50% U.S. and 50% Canadian stocks. It doesn't follow a benchmark index. Instead, managers actively pick companies with the goal of generating consistent income and capital appreciation. Like many CEFs, trades on the exchange, which means its share price can differ from its net asset value (NAV). When it's priced above NAV, it trades at a premium; when it's below, it trades at a discount. This difference can offer opportunity depending on when you buy. also uses light leverage of around 1.2 times to enhance both yield and returns. That means for every $100 of investor capital, the fund controls about $120 worth of investments. This modest borrowing boosts income but also amplifies volatility, so it's important to understand it's not risk-free. Despite that, its long-term track record is solid. Over the last 10 years, if you reinvested all monthly distributions, you would have earned a 10.9% annualized return, an impressive result for an income-focused fund. First, with $7,000 in your TFSA, and trading at $16.43 per share, you could buy approximately: $7,000 ÷ $16.43 ≈ 426 shares. Each share pays a $0.10 monthly distribution, which has remained steady for more than a decade. That means every month, you'd earn: 426 × $0.10 = $42.60. Because the TFSA is tax-free, you keep every penny – no income tax, no withholding tax, no paperwork. That's $511.20 per year in passive income. And if you choose to reinvest those distributions, you'll slowly build more shares, which in turn generate more income each month, kicking off a powerful compounding effect over time. The post How I'd Transform $7,000 Into a Reliable Stream of Passive Income appeared first on The Motley Fool Canada. Before you buy stock in Canoe Eit Income Fund, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canoe Eit Income Fund wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube 2025
Yahoo
23-04-2025
- Business
- Yahoo
Securing Your Financial Future: Where I'd Invest $15,000 in Canadian Defensive Stocks
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada Owning stocks means accepting a certain level of risk—especially market risk. That simply means the value of your investments can fluctuate based on news, economic data, or global events. These risks can come from almost anywhere. Right now, the main source of concern is Donald Trump's tariffs. In the past, it's been inflation shocks, central bank policy surprises, oil price crashes, or global conflicts. This is the price of admission if you want returns that beat what your savings account offers. But there is something close to a free lunch in investing, and that's defensive stocks. These are companies that, for one reason or another, tend to see less day-to-day volatility and smaller drawdowns during market corrections or bear markets. Here's what you need to know about defensive stocks as a Canadian investor—and one exchange-traded fund (ETF) I think is worth considering for a $15,000 investment. A stock is considered defensive mainly because of the industry it operates in and how steady its business model is. These companies typically face less operational uncertainty. Their customers, products, and services are relatively stable, which means their earnings are more predictable, and their management teams can offer more reliable forward guidance. That consistency tends to make them more resilient when markets get volatile. The common trait among defensive companies is that they operate in industries with inelastic demand. In simple terms, that means people continue buying what they sell no matter what's going on in the economy. The three classic examples are utilities, healthcare, and consumer staples. Utilities are defensive because people still need electricity, water, and heating regardless of economic conditions. Consumer staples hold up well because people keep buying food, cleaning products, and basic household items even during recessions. Healthcare is a textbook defensive sector globally, but Canada has very few publicly traded healthcare companies, so it plays a smaller role in domestic strategies. The end result is that defensive stocks tend to have lower beta values. Beta is a measure of a stock's volatility relative to the market. The market as a whole has a beta of one. A stock with a beta under one generally moves less than the market, making it less likely to experience sharp drops when sentiment turns negative. With $15,000, you could build your own portfolio of defensive stocks by screening for companies with low beta. But if you'd rather avoid placing a dozen or more buy orders and tracking them individually, you might want to consider BMO Low Volatility Canadian Equity ETF (TSX:ZLB). ZLB is a rules-based ETF that screens for and weights companies based on their beta—the lower, the better. As you'd expect, its portfolio looks quite different from the average Canadian equity ETF. Instead of the usual heavy tilt toward financials and energy, ZLB leans more into consumer staples and utilities, which tend to hold up better during downturns. What's impressive is that despite its focus on lower-risk stocks, ZLB has still delivered a solid performance. Over the past 10 years, it has returned 9.03% annualized, outperforming the S&P/TSX 60 Index. This is an example of the low volatility anomaly—a well-documented paradox where lower-risk stocks have historically delivered better risk-adjusted returns. This challenges a basic principle of finance, which says you need to take on more risk to earn higher returns. ZLB isn't perfect. Its 0.39% management expense ratio is on the higher side for a passive strategy, and with only 52 holdings, it's not as diversified as ETFs tracking the broader S&P/TSX Capped Composite. Still, for a simple, effective way to tilt your portfolio toward Canadian defensive stocks, it does the job well. The post Securing Your Financial Future: Where I'd Invest $15,000 in Canadian Defensive Stocks appeared first on The Motley Fool Canada. Before you buy stock in Bmo Low Volatility Canadian Equity Etf, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Bmo Low Volatility Canadian Equity Etf wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
How I'd Allocate $7,000 in Defence Stocks in Today's Market
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada If you have any ethical hang-ups about owning defence companies, stop reading now. It's completely fair to not feel comfortable owning shares in a company that manufactures weapons, especially when those may be used in ways that result in deaths. But for those of you without those concerns, it's worth noting that Canada doesn't really have a defence industry to invest in. If you're looking for exposure, you'll need to look south to the U.S., or even internationally to Europe. Right now, there's only one exchange-traded fund (ETF) on the TSX that offers pure-play defence industry exposure. Here's why I'd buy it instead of picking individual stocks for a $7,000 investment. Unlike sectors like consumer staples, where a few diversified giants dominate and owning two or three stocks can give you solid exposure, the defence sector is a lot more fragmented and competitive. There's no one-size-fits-all company that covers the entire landscape. Defence is made up of multiple sub-industries: aerospace, ground systems, naval systems, intelligence, detection and surveillance, cybersecurity, missile systems, and now, newer areas like drones and autonomous platforms. No single company does it all — so unless you're buying an ETF, there's no simple way to cover the whole space. The other challenge is how defence companies make money. Especially in the U.S., many of the large firms rely on massive, multi-year contracts awarded by the Department of Defense. These contracts often total millions — or even billions — of dollars and typically go to a single winner known as the 'prime contractor.' That means multiple large companies might all be bidding for the same deal, but only one walks away with the win. So when a contract gets awarded, the share price of the winner can jump, while the others can take a hit. Unless you have the time and experience to research these businesses in depth, investing in defence stocks can feel like flipping a coin. That's why I prefer using a defence-focused ETF. It lets you bet on the broader trend of a more unstable world and rising military spending — without trying to guess which company lands the next big contract. If you're a Canadian investor looking for defence exposure in Canadian dollars, your only current option is the iShares U.S. Aerospace & Defense Index ETF (TSX:XAD). XAD tracks 36 companies included in the Dow Jones U.S. Select Aerospace & Defense Index. Just be warned — this is not a diversified ETF. It's a narrow, single-industry fund, and the top two holdings make up roughly 35% of the portfolio. There's also some risk that XAD could shut down if it doesn't attract more investor interest. As of now, it only has about $30 million in assets under management. For long-term viability, ETFs usually need to cross the $50 million threshold. That said, the performance backdrop is promising. XAD itself launched on September 6, 2023, but its U.S.-listed counterpart has a longer track record and has returned an annualized 10.6% over the past 10 years. On fees, XAD charges a 0.44% management expense ratio, which is higher than what you'd pay for a broad market ETF, but actually quite reasonable for a sector-specific fund. Bottom line: if you want to invest in defence stocks as a Canadian, XAD is your best — and only — TSX-listed option for now. Just be mindful of the risks and consider limiting your allocation to no more than 20% of your total portfolio. The post How I'd Allocate $7,000 in Defence Stocks in Today's Market appeared first on The Motley Fool Canada. Before you buy stock in Ishares U.s. Aerospace & Defense Index Etf, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ishares U.s. Aerospace & Defense Index Etf wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
Use This Sneaky Strategy to Earn Monthly Income From Tech Stocks
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada U.S. tech giants – especially the Magnificent Seven –aren't exactly known for their dividends. In fact, some don't pay any at all. That's not an oversight though. Despite their massive cash reserves, these companies tend to prioritize research and development, acquisitions, or share buybacks – all of which are often more tax-efficient than regular dividend payouts. But if you're an investor who wants to generate income from tech stocks, you don't need to wait around for them to start paying or growing dividends. With options-based strategies like selling covered calls, it's possible to collect monthly income that can add up to double-digit annual yields. Here's how it works – and one exchange-traded fund (ETF) that automates the strategy across America's biggest tech names, currently offering a hefty 11.8% yield. Covered calls are easy to understand once you remember this one tidbit: you're giving up some upside price appreciation in exchange for immediate cash today. That upfront cash is called a premium, and it's what makes this strategy attractive to income-focused investors. Here's how it works. You own the stock, and then you sell a call option on it – essentially agreeing to sell your shares at a set price (called the strike price) if the stock rises past that level before the option expires. In return, you pocket a premium upfront. The size of that premium varies, but it's generally larger when the strike price is closer to the current share price; the time to expiration is longer; and the underlying stock is more volatile. Why? Think of it like selling an insurance policy. The more likely it is that the stock hits the strike price, the longer you're exposed, and the more volatile the stock is, the greater the risk you're taking on. And just like an insurance company, you get paid more to take on more risk. It's a simple, rules-based way to turn stocks – especially low-yield ones – into monthly income machines without having to sell them. Selling covered calls on your own isn't exactly beginner-friendly. You need enough cash to buy 100 shares of each stock you want to write calls on, and with how expensive most U.S. tech stocks are – not to mention the USD conversion cost – it can get prohibitively expensive fast. That's why I prefer to leave the heavy lifting to an ETF like the Hamilton Technology YIELD MAXIMIZER ETF (TSX:QMAX). It's run by Nick Piquard, a well-known Canadian options strategist and Chartered Financial Analyst (CFA) with years of experience managing these kinds of strategies. In short, QMAX holds a portfolio of the 15 largest U.S. tech stocks and writes at-the-money covered calls on 30% of the portfolio. That means you still keep 70% of the potential upside, while generating income from the call premiums. And because tech stocks are so volatile, those premiums are juicy. QMAX currently yields 11.8% annually, with monthly payouts. Performance-wise, it hasn't just been a pure income play either. With distributions reinvested, QMAX has returned 18.6% over the past year, showing that you can still get growth – even with an income tilt. The post Use This Sneaky Strategy to Earn Monthly Income From Tech Stocks appeared first on The Motley Fool Canada. Before you buy stock in Hamilton Technology Yield Maximizer Etf, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Hamilton Technology Yield Maximizer Etf wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $20,697.16!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*. See the Top Stocks * Returns as of 3/20/25 More reading Best Canadian Stocks to Buy in 2025 Here's Exactly How $15,000 in a TFSA Could Grow Into $200,000 4 Secrets of TFSA Millionaires Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025
