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By Dale Roberts, cutthecrapinvesting
Special to Financial Independence Hub
The good news for Canadians who build their own stock portfolios is that if you simply buy enough of those blue-chip companies, then get out of your own way, you’ll likely be a very successful investor. At least on the Canadian equity front.
Research shows that big ‘boring’ blue-chip stocks outperform the TSX Composite. Low volatility and high yield are top of the heap for Canadian equity over the last 25 years. On the Sunday Reads we’ll look at Canadian stock portfolios.
Here’s the post that offered Norm Rothery’s graphic on the performance of Canadian stock portfolios.
Dividends don’t contribute to wealth creation.
Yes we have to remember that the big dividends help us find those blue-chip stocks (and value at times), but the dividend payments don’t contribute to the wealth creation: as the dividend is merely a removal of value from your stock holding. The share price drops by equal on ex dividend day. That said, the dividends can help us find those great companies, and well, they make investors feel good.
Beat the TSX Portfolio
Here’s an example for the high-dividend approach – The Beat The TSX Portfolio.
From that post, the BTSX is having a good 2025 after a couple of years of underperformance. Of course, the big dividend payers suffered during the inflationary rising rate environment.
While the Beat the TSX invests in the top 10 yielding stocks from the TSX 60, I’d suggest investors consider more stocks from the sectors where the BTSX hunts: more financials, more utilities including pipelines. Remove some of the concentration risk. The approach has a very considerable long-term record of outperformance, but it can be very volatile. You might even consider the top 20 yields as I have suggested in the past.
Canadian wide moat portfolios
Personally, I like the Canadian wide moat portfolio approach. Greater returns, less volatility, that floats my boat in semi-retirement. I’ve updated the post for the Canadian Wide Moat Portfolios.
Be sure to give that post a full read, but here’s the wider moat portfolio:
And the returns comparison. There’s a nice beat with lower risk:
In that Canadian Wide Moat post I also offer an update on my wife’s Canadian Wide Moat portfolio. We added more financials and ditched the cyclical railways. There’s more than one way to ‘wide moat.’
And the returns comparison:
I offered – While lagging the almost two-year term evaluation, the portfolio has offered a slight outperformance over the last year and in 2025 during the Trump tariff tantrum. Also, and most importantly, the portfolio has performed with much less volatility and drawdowns. I’d appreciate a portfolio that outperforms with lower volatility (and I hope that happens over time), but the main goal would be to deliver strong equity returns with lower volatility.
Greater returns, less risk for retirement
Given that the portfolio holds more defensive equities, I like the idea of using fewer bonds to create the balanced portfolio. Joan’s portfolio holds 10% cash and 10% bonds. It beats a traditional balanced portfolio as per the objective:
That’s an idea put forward in Retirement Club. Not advice of course, but an idea and strategy for consideration.
We will all build the portfolio that suits our personal financial plan and our risk tolerance.
The risk return profile for the wide moat portfolio is very close to the BMO Low Volatility ETF – ZLB-T. Be sure to check out that post and the BMO ETF.
Canadian home equity bias
And always consider your concentration risk, avoid that Canadian home bias.
Diversification is the only free lunch. Consider a global portfolio as per those asset allocation ETFs.
Feel free to reach out with questions, use that Contact Form.
More Sunday Reads
While Fritz is mostly retiring from blogging, he did promise of offer a post from time to time. And lucky us, here’s My biggest surprise in retirement.
My biggest surprise in retirement is how difficult it’s been to reduce our pre-tax account balance despite aggressive annual Roth conversions. I realize that’s primarily due to the power of compounding in a strong market, but it’s still been a surprise. Also, I knew the increased tax burden would consume a lot of cash, but “knowing it” and “living it” are two different things.
Dealing with drawing down your pre-tax accounts is a surprise you should be prepared for as you plan for retirement.
At Findependence Hub a look at utility ETFs that offer lower risk and some potential tax advantages.
Dan at Stocktrades can help you tap some Canadian alcohol stocks.
Dividend Hawk’s portfolio week in review includes portfolio news for some of our personal holdings, as well:
TELUS Corporation (TSE:T) Submits Non-Binding Indication of Interest to Acquire Full Ownership of TELUS Digital; T has submitted a non-binding indication of interest to take full ownership of TELUS International (Cda) Inc. (NYSE:TIXT) (TELUS Digital). Under the proposed deal, TELUS plans to acquire all issued and outstanding subordinate voting shares and multiple voting shares of TELUS Digital not already owned directly or indirectly by TELUS for a price per share of US$ 3.40 to be paid in cash, TELUS common shares or a combination of both.
QUALCOMM Incorporated (QCOM) to Acquire Alphawave Semi; QCOM is acquiring British semiconductor company Alphawave IP (OTCPK:AWEVF) at an implied enterprise value of about $2.4B to boost its AI technology portfolio. This acquisition of Alphawave Semi is expected to complete during the first calendar quarter of 2026.
RTX Corporation (RTX) awarded $646 million hardware production and sustainment contract for SPY-6 family of radars; Raytheon, an RTX business, was awarded a $646 million contract to continue producing AN/SPY-6(V) radars for the U.S. Navy. This is the fourth option exercised from the March 2022 hardware, production and sustainment contract that is valued up to $3 billion over five years.
At Banker on Wheels we’re spending down our portfolio in retirement (podcast). You will have to sign up for free reads, but it’s easy to do, and worth it, of course.
Also in the BOW mix, the 4% rule spend rate is usually much too low, says the creator of the “rule”.
That diversification lifted the 4% rule to 4.7%.
Bengen calls the 4.7% rule the worst-case scenario that would have allowed a retiree who stopped working in October 1968 — and faced a bear market and high inflation — to not outlive their money for 30 years. Out of almost 400 investors he studied, only that one investor had a safe withdrawal rate as low as 4.7%.
For the rest of them? The average safe withdrawal rate was 7%, Bengen said.
Yes, the 4% rule is just a starting point framework. Your start date and the markets and your life plan will dictate your actual spend rate in retirement.
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ETFs / Stock Portfolios / Retirement Strategies / Wealth Creation/ Retirement Club
Dale Roberts is a former advertising writer and creative director and long time index investor. In 2013, he followed his passion to become an investment advisor, and then trainer at Tangerine Investments. He won Advisor of the Year in his first year. He left Tangerine in 2018 to start Cut The Crap Investing, where he helps investors learn how to use ETFs, simple stock portfolio models and Robo Advisors to full advantage in the accumulation stage, and especially in retirement. A ‘hyper-focuser’ Dale has spent thousands of hours studying retirement – from the financial planning aspects to the portfolio models that make it happen. Early in 2025 he co-founded Retirement Club for Canadians, described in this Findependence Hub blog. Keep in mind Dale is not a financial planner. Retirement Club provides ideas and learning for consideration. As we know, self-directed investors are responsible for their own investment decisions. This blog originally appeared on his site on June 15, 2025 and is republished with permission.
