I'm accumulating slowly, no more 1000lots, just 100 or 150 at a time. Holding through down markets has paid off with this stock big time this year. How do my friends out there trade this? God Bless North America
I accumulated both BMO and CIBC throughout the financial debacle starting in 2008. I think this will prove to have been the best opportunity for purchasing Canadian bank stocks in my lifetime, although the markets will present other opportunities of perhaps even better sales. As such I have no intention of selling the shares I accumulated across this period.
The dividends these banks yield are working wonders to replace my need for a paycheck. I’m not buying these today as I now see better opportunities for accumulation elsewhere. The one thing that would make me consider trimming my exposure to these animals would be a change to the Canadian federal bank act.
I agree with your revised approach of slow adjustment, accumulation and trimming, of positions. I think now remains a good time to accumulate sound dividend plays for a long term (i.e.: longer than 2 years) period. I strongly disagree with the financial press stating that long term holding is obsolete. I recall the similar things being said about the new economy back in the late 90’s and even other nonsense about the bond markets back in the 80’s. Each time these modern ‘theories’ were proven wrong.
Keep in mind dividend plays offer the ability to grow both capital and cash flow (as opposed to debt instruments). In addition, during inflationary times, properly selected corporate market values, revenue and profits can track the curve, again, unlike fixed income. Lastly the most wonderful aspect of bank stocks lies in their ability to simply profit off of the mechanics of the monetary system (simply Google and read up on how money is created in countries like the US and Canada).
<<Lastly the most wonderful aspect of bank stocks lies in their ability to simply profit off of the mechanics of the monetary system (simply Google and read up on how money is created in countries like the US and Canada).>>
I am a retired banker in the USA so I hope I have this right. The Bank of Canada is the one and only central bank of Canada. CIBC is not a central bank and does not therefore print money and expand the currency except through the dictates of the Bank of Canada (the central bank) through the restriction by policy of the reserve ratio. CIBC makes money primarily by making loans and getting paid off principal plus interest and by not making bad loans or investing in bad things like the CDO's that the USA developed and sold to hundreds of countries around the globe. Also, there are other fees for services charged. The key aspect in banking is not making bad loans nor buying bad investments. Controlling expenses. Not buying and paying too much for mergers. It takes a lot of being patient at times. I think there is a lot of stability and good management built into the price of CIBC's stock.