2020 Market Crash – I’m Still Buying. 2 Purchases

2020 market crash - Disney

2020 Market Crash – I’m Still Buying. 2 Purchases

Hey Hey Hey. The big 2020 market crash. How you holding up?

We have officially lost all our profits from the past couple years other than all the dividends we received, so we are still up. =) The dividend machine keeps on chugging and pumping out that cold hard cash. CASH FLOW is what its all about.

This market has been crazy, up one day down the next.. Do I know where it will be tomorrow? No clue, especially with the governments stepping in to prop the market. This oil war could go on months or could be done in a week again no one knows. How long will covid continue? Will the world get so sick that every country basically go’s into lock down for a period of time? Again no one knows.

Spring is right around the corner now, they say warmer weather prevents it. Either way. Yay spring! I need some rays for me and those panels right?

This has been the biggest “crash” I have experienced since I started investing. When every day was red it got to me a bit, but I know long term the market always rebounds and with the portfolio dripping I’m getting those shares even cheaper.

It has tested my risk tolerance and I’m pretty comfortable with things. I certainly am not losing sleep over it. Well at least not yet. The hardest part has been deciding when to deploy that cash. Purely a mental game. But have you ever thought wow I wish I would of started investing earlier. Maybe during the 2009 crash? Those prices were soo cheap, I would of been so much better off.. Well we aren’t there but we certainly are cheaper than a month or 2 ago.

Short term we may see more red but long term we might look back and think if only I invested more than. The opportunity was right in front of me. It’s so easy to get blinded by red and wait for things to turn around, but by then it may be too late. Personally I’m going to stick to the plan, and grow that income month by month.




Disney

As you can see by the main picture our son just got back from going to Disney for 9 days. He went with my folks, my sister and her fiance as well as 2 of his cousins. They had a fantastic time. They place was pretty busy but not packed for obvious reasons. Avatar and Disney were both fantastic by the sounds of it and the pictures. We gave him a stack of cash to buy whatever he wanted there. Well its safe to say that markup there is insane! But that’s what people do when they go there. Blow their money!

Disney is one of my favourite holdings as well since they dominate the entertainment industry. Fortunately they have taken quite the hit. Park closures, cruise ships and movies are getting hurt. Even the virus is impacting movies that they are currently filming. Will more park closures happen? Again no one knows but possibly. On the plus side more people are staying in watching disney plus! Will this carry the load? Of course not. Earnings will get hurt for sure. But do I see Disney going bankrupt? not at all.

Disney is a behemoth of a company that does a lot of the right things and has a wide moat. This virus is just short term noise and creates what I feel to be a short term buying opportunity. (short term is less than a yr for me)

The market seems to already be baking in the bad earnings for the next couple quarters, but with disney plus launching in Europe this month how much will those subs grow?

I decided to take advantage of these lower prices last week and grab another 10 shares at $115 and change. Clearly I didn’t time that right as its currently $107. If it drops under 100 I plan on buying another 10.

I’m really happy to add to them at these prices and this purchase adds $17.60 to our forward income.




Smart Centers

This is one stock I have had my eyes on for awhile. Its a solid reit that seems to be diversifying into all the right spaces. Oh it also is currently priced at levels that haven’t been seen since December 2014. Is retail really dead? Some say yeah. I think the plaza’s are just too beat down at the moment. There is a lot of stuff I would rather just pop to the store and buy versus buying online. Hair cutter’s will always have a place in these plazas as well as food and other types of services businesses.

Smart Centers has 115 Walmart anchored centres. This brings in a lot of traffic to their plaza’s and surely ups the lease rates for surrounding businesses.

But they aren’t just retail. Here’s a snippet of them from their website.

SmartCentres Real Estate Investment Trust is one of Canada’s largest fully integrated REITs, with a best-in-class portfolio featuring 157 strategically located properties in communities across the country. SmartCentres has $9.9 billion in assets and owns 34.1 million square feet of income producing value-oriented retail space with over 98% occupancy, on 3,500 acres of owned land across Canada.

SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. A publicly announced $12.1 billion intensification program ($5.5 billion at SmartCentres’ share) represents the REIT’s current major development focus. This intensification program consists of rental apartments, condos, seniors’ residences and hotels, to be developed under the SmartLiving banner, and retail, office, and storage facilities, to be developed under the SmartCentres banner.

SmartCentres’ intensification program is expected to produce an additional 27.3 million square feet of space; all construction commencing within the next five years, 13.3 million square feet of which is already underway.

A really diversified reit trading at cheap prices. Didn’t we just lower interest rates though? Yeah we did and we have been doing that more and more. We are in a low interest environment and I don’t see that ending any time soon. (A big reason my portfolio is utility heavy)

Telco’s, Utilitys and Reit’s benefit immensely in low interest environments. If anything I see rates continuing to go lower in the future. These may be the places you want to deploy your cash.

I really love that I can hold a reit and have access to residential, retail, storage spaces and retirement homes. Especially partnering with Revera. This is a senior living company that I have been seeing everywhere these days. Senior living will be huge in the coming years as the boomers downsize in my opinion.

Anyways we bought 45 shares in our kids resp at roughly 27.50 per share. It had a 6.7% starting yield and they have been growing that for 6 years now and have a 3% 5 year growth rate. Not bad for a reit.

Reits have been one of our lowest sectors in the portfolio as of late, so its nice increasing our stake here. Especially in times like this. This purchase adds $83.26 to our forward dividends.

Conclusion

The 2020 market crash doesn’t have to be all bad. By continuing to make purchases every month, we are growing our passive income while taking advantage of these lower prices. A win win.

Portfolio has been updated.

What are your thoughts? Buying anything? or Still Holding Cash?

cheers!





 

24 Responses

  1. Matt M. says:

    Thanks for this post Rob! Long-term investor here (dividend growers) and I’m adding to postions that are getting nailed (mainly TD in Canada, and a few of my US holdings, but watching daily for more targets and the prices are getting close for me). I’m not losing sleep either, and I’m looking at this volatility as a great opportunity in the long-term. I’m just picking my spots, and will continue to do so (and not try to time the market). Happy investing and thank you for this blog!

    • Rob says:

      hey Matt

      Welcome to the site and thanks for commenting!
      The banks are a great deal at the moment. I will be adding to our holdings in the future. Our financial sector is pretty high at the moment so I’d rather add to other sectors but its hard to ignore these prices.

      Wish you all the best on your journey to financial independence as well.
      cheers Matt

      • Matt M. says:

        For sure, glad I found this site! I agree on the banks; I don’t see a lot of growth in the near future (and possible pain) and I’m just buying more TD as it dips (below $60 was my point to add extra). I’ve been a holder of ENB for the last few years and adding more when it goes below $40 is tempting. Curious to get your thoughts on how safe the dividend is? They’ve been very ambitious with their increases but everything seems to be up in the air right now in the world lol thanks again!

        • Rob says:

          hey

          Enbridge and Interpipeline are the 2 holdings in our portfolio that I’m mildly worried about a dividend cut. Ipl has got the heartland project which will be great and its due to start operations next year. I hope they can hold down that dividend until then after that I’m not worried. Enbridge should be safe, as you probably know we need more pipelines in Canada badly. Oil has to be transported by rail which costs more because pipes are at capacity. Line 3 is a big project for enbridge that just continues to get delayed though.

          I think its safe but is anything oil related in Canada safe at $30-40 barrel? Companies would make little profit at these levels. As long as the oil keeps flowing I think Enbridge should be fine though. But of course there are risks there. They are guiding for 5-7% yearly dividend increases moving forward though.

          cheers Matt

  2. German says:

    Great purchases, Rob! We might be in a greatest buying opportunity ever. The market crash is really temporary, expect for oil stocks. Worst case scenario, we go into nation-wide lock-down to stop the spread of the virus. After that the economy moves forward.

    I cannot make any new purchases in my TFSA account as my contribution limit is maxed, but I am debating to start buying stocks in a regular account. Would love to pick up banks and pipelines.

    • Rob says:

      Hey German

      Yeah these prices surely are tempting. Suncor at 25 bucks? crazy. If the market as a whole wasn’t down id be all over them, but at the moment don’t want to get pulled into oil. Trps looking interesting from a pipeline perspective. These banks though. So cheap, but this lower interest environment cant be good for them. Especially if some oil companies start going bankrupt.

      I guess the maxed tfsa would be a good problem to have right? A taxable account may be the way to go or your rrsp’s.

      Cheers German!

  3. Good stuff Rob!

    I’m taking advantage of the markets, and continuing to make buys as well. Just waiting on my tax refund to come in and really pick up these good deals in the market.

    • Rob says:

      hey dgx

      Hopefully you get it soon. I got ours in one week. Was really fast this time. Maybe the delay would of been a good thing. haha =) cheers man

  4. jimmbboe says:

    Glad they enjoyed the trip and thanks for contributing to my DIS dividend! 😉 Smart Centers sounds like an interesting REIT idea.

    • Rob says:

      hey Jimbo!

      No problem always great helping fellow shareholders and doing business with companies we hold shares in. Check them out, they are even cheaper today. haha… womp womp

      cheers

  5. I did a research of DIS https://afterw2.com/disney-a-blue-chip-company/. I use the relative dividend yield model to value the company. I think $90-100 USD seems a good price. I just adjust my limit order to $90. Let’s how it goes.

  6. PCI –

    Hell yeah, keep acquiring shares, adding income, you’ve got this.

    -Lanny

  7. Jannine0728 says:

    Good stuff Rob!

    Jannine Pecasales
    Executive Vice President
    PhamilyPC.ca

    • Rob says:

      hey Jannine

      Thanks. Curious why you always leave that tag on every comment. It seems really spammy. I have been deleting all your comments in the past but know you are a follower, so just curious why you type that in each time.

      cheers

  8. I’m trying to be selective with my buying as the market declines, too, Rob. I was surprised by the magnitude of the decline in DIS, but I guess that’s to be expected given the impact the current environment is having on their businesses. I was hoping for a DIS price south of $105 before dipping my toes in, and we’ve been well past that. However, lots of stocks appear to be on sale and I’m torn regarding where to put my money to work. I’ll find something though… and it might be DIS.

    • Rob says:

      hey Paul

      Yeah its hard, just like that prices seem cheap. I’m really torn with adding more disney at these levels or deploying cash elsewhere. At the same time we may go into lockdown and me and the wife would lose our income for a bit. Really shows how important that passive income is at times like this. We will be fine going through this but for others it could be devastating.

      I really used to think this would be a quick situation but the more it unravels, I think we will feel the effects for awhile and this will drag out.

      All the best Paul
      cheers

  9. Ben Taylor says:

    A little piece of advice.

    A drop of 31% or more in 4 weeks is truly epic. This has happened so fast that people cannot fully comprehend it, nor can they comprehend what is happening and how it has the potential to drastically alter the trajectory of our economy for a very-long-time. A generational behavior change is upon us and may be permanent.

    The collective are clearly in the first stage… denial. Many still don’t believe the virus is a real public health threat and this is all an overreaction. Others believe that once we get the ‘all clear’ businesses will get back to normal, as will earnings and the overall stock market.

    If this is a protracted situation lasting more than a few weeks, and all the current evidence suggests a few months at best, the damage will be severe. The federal debt is about to skyrocket by Trillions as will the Fed’s balance sheet. Early estimates are that this thing is going to cost us ~10 Trillion in excess debt and money printing. The U.S. government, businesses and individuals are not financially prepared for something like this at all.

    • Rob says:

      hey Ben

      Welcome to the site and thanks for commenting. There’s no question the drop has happened extremely fast and may change the the way business works. I dunno if it will change our behaviours after this… I guess time will tell.

      I could be in Denial. Could we go into lock down longer and shut things down longer? Yeah but I do think things will bounce back after. People will be dying to go out and do stuff. Of course there will be financial impacts to business’s and some will not make it.

      I try to think long term. In 1-2 years will there be some kind of cure/ vaccine? I think so, will Disney parks be open and busy. Most likely. No one knows what will happen short term. What if Saudi turned off their taps and oil bounced back? The market would love it. A simple cure gets approved soon?

      Now I’m not going to dismiss what your saying as it makes a lot of sense. We can start to see what will happen after lock down in Beijing. Movie theatres are still dead at the moment, but restaurants are becoming busier again. It will be interesting to see how things go there. I guess the biggest question is what will happen if there’s a spread again?

      Personally I played the end of the world stuff about 10 years back. I started hoarding food, buying precious metals telling people governments have too much debt. How will they pay for it? The stock markets going to collapse. Gold and silver will be the currency of the future.

      I have held our physical bullion with 0 return on investment and became very negative at the time. Almost cheering on negative things so that my thesis may be right.

      That’s not a road I want to go down again. Sure things aren’t all sunshine and rainbows at the moment but I have faith in people. Also I think if anything governments will hyper inflate vs letting deflation happen.

      Clearly whatever happens, this time will go down in history.

      What are you doing these days? Sitting on cash? investing in bullion?
      All the best Ben! Thanks always appreciate the comments and the discussion in the chat.
      cheers

  10. Hey Rob,

    Great job getting your capital to work amid the chaos. There is plenty of fear in this market, but a great company like DIS should be around for decades to come.

    REITs have been absolutely getting hammered over the last while, but I don’t imagine there’s going to suddenly be no need for them, so good work capitalizing on the juicier yields.

    We all need to keep our heads in this trying time and stick to our long-term strategies.

    Take care,
    Ryan

    • Rob says:

      hey Ryan

      Thanks man

      Long term things will be fine, but for sure all the bad news can be bombarding. Makes you wonder if all this news is normal in any downward market. Hopefully this is a once in a lifetime situation.

      All the best Ryan
      cheers

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