My Own Advisor’s Top 5 Stocks

By Mark Seed, myownadvisor

Special to Financial Independence Hub

Over the years of running this site, I have received numerous requests to share everything in my portfolio. For today’s post, I will reveal a bit more to help other DIY investors out since they are curious: what are my top-5 stocks?

Read on for this update including what has changed over the last year in this pillar post!

My Top-5 Stocks

As I approach 15 years as a DIY investor, a hybrid investor no less, we inch closer to our semi-retirement dream. Long-time subscribers will know we’ve always had two major financial goals to achieve as part of that journey:

1. Own our home.

Well, that goal is done!

You can read about our journey to mortgage-freedom / debt-freedom here below.

2. Beyond two workplace pensions, beyond our future CPP or OAS benefits, beyond any future part-time work – another big goal was for us to own a $1 million dollar investment portfolio for retirement.

Well, we accomplished that as well a few years ago.

We’ve actually been investing beyond that goal for some time only until recently – which I outlined in this Financial Independence Budget update.

Our investing goals have been accomplished using a hybrid investing approach – something that might appeal to you as well:

• Approach #1 – we own a number of Canadian dividend-paying stocks for income and growth. We have essentially unbundled a Canadian dividend ETF for income and growth – and built our own ETF – without any ongoing money management fees.
• Approach #2 – we own a few low-cost ETFs that focus on growth. We believe it is wise to invest beyond Canada for growth/diversification and so we do via a few low-cost ETFs like XAW and QQQ in particular. Our U.S. stocks are down to a handful now and potentially less over time in favour of those ETFs above.

A bias to getting paid – my top-5 stocks

With a bias to getting paid and getting more raises over time as a shareholder, we own a few stocks in particular. Before sharing my top-5 stocks, some highlights why DIY investing works for me.

1. Fees are forever.

With investing you usually get what you don’t pay for.

Based on all the information available today, to buy an index fund in particular, I don’t believe you need a money manager to perform indexing work on your behalf. That decision is up to you of course.

2. I/we control the portfolio.

Ultimately nobody cares more about your money than you do.

I run my site to help pay forward my successes but also share what’s not working. I have no problems admitting I am not perfect. I make investing mistakes. Most people do. Via my site, I share those lessons learned so you don’t have to make them. While there is no perfect portfolio you can design a portfolio that should meet many of your needs over time. Many DIY investors, readers here, have learned that sustainable dividend and distribution income is one such path to financial independence. In some cases, these DIY investors have been investing long enough that their portfolio income now exceeds their expenses – some of them earning over $100,000 per year from their portfolio after decades of investing. They’ve learned that the power of compounding is an incredible force if left uninterrupted. These DIY investors manage their investments based on their income objectives.

Given I control our portfolio, I feel I can manage our investments aligned to our objectives. A reminder about my free e-book below:

• Chapter 1: Spend less than you make and invest the difference. Invest in mostly low-cost products. Strongly consider diversifying your investments including stocks from different sectors and countries that pay dividends and offer growth.
• Chapter 2: Avoid active trading. Celebrate falling stock prices – buy more when they fall in price.
• Chapter 3: Disaster-proof your life with insurance, where needed, to cover a catastrophic loss. Otherwise, keep investing and just keep buying.
• Book conclusion: Read Chapters #1-3 and rinse and repeat for the next 30 years. Retire wealthy.

That’s the basics within 80,000+ personal finance books in just four bullets. 🙂

As a DIY investor I believe you have some powerful decisions most money managers will never possess:

1. A money manager has to demonstrate value by trading. Otherwise, why use them when you can buy your own quality stocks or indexed funds instead?
2. Money managers usually need approval for their transactions. Instead, you can decide when to celebrate lower prices to get your stocks on sale without another manager, director or VP-scrutiny involved.

To paraphrase the index investing community, with no way to consistently identifying manager performance ahead of time, there is very little chance of finding any money manager who after fees charged to clients can consistently best a basic index fund performance over the long-haul.

There are simply too many low-cost, diversified, easy-to-own ETF choices to build wealth with. As a DIY investor, you don’t ever have to pay someone else to do your work for you.

In the spirit of going it alone, doing it yourself and being accountable for your own results, I feel my hybrid approach offers the best of both worlds:

• In Canada, we own many of the top-listed stocks in the TSX 60 index for income and growth.
• Beyond Canada, beyond a few U.S. stocks, we use indexed ETFs for extra diversification.

We fired our money manager years ago and have never looked back … that approach might work for you too.

Without further delay, here are our top-5 stocks in our portfolio by portfolio weight current to the time of this post.

My Top-5 Stocks

1. Royal Bank (RY)

Since publishing the original post in fall of 2023, I can share that Royal Bank of Canada (RY) remains our largest single stock holding. About 4-5% of the total portfolio. We’ve owned RY for many years – profiled here.

Here are the returns compared to one of my favourite low-cost ETFs (XIU) for comparison:

2. TD Bank (TD)

While the management team at TD is certainly due for some changes, I will disclose that TD is our second largest stock position at the time of this post. Like RY, we’ve owned TD for many years – profiled here – as early as 2009.

Again, returns for comparison purposes:

Banking is just one important sector in our Canadian economy. Fortis owns and operates multiple transmission and distribution subsidiaries in Canada and the United States, serving a few million electricity and gas customers.

Last time I checked, just like people need to bank or borrow money (see the desire for us to own banks!) folks love electricity and power.

I own Fortis for steady dividend income and some capital gains. I started my ownership in Fortis also back in 2009. You can read about that here.

Again, historical returns for context:

Our Canadian stock market operates in an oligopoly, meaning there are a few dominant players controlling the market. We see this in banking, utilities, and it continues with our telco industry. As a shareholder, Telus has been focused on expansion in recent years but in doing so has also taken on some debt in the process. The share price has lagged. With interest rates due to come down further over the coming 24 months, I believe Telus is a great buy to add more to my portfolio.

You can read about when I started buying Telus here.

Again, returns for comparison purposes:

5. Canadian Natural Resources (CNQ)

Following the stock split and rise in share price, CNQ continues to be a stock on the rise in my portfolio.

I’ve been a CNQ shareholder for many years – the evidence is here since 2013.

Again, some recent returns for comparison purposes current to 2024:

You’ll notice a few things in this post.

1. All top stocks are Canadian companies. The reason why is because I started my DIY investing journey 15 years ago with buying Canadian companies. Since those early years, I have been adding assets outside of Canada.

2. I make no mention of U.S. stocks. The other reason is because at the time of this post, RY, TD, FTS, T, and CNQ are my top individual stocks and no U.S. stocks make the cut – yet.

This is largely by design since due to our hybrid investing approach: while we buy and hold many Canadian (and some U.S.) stocks for income and growth, we tend to index invest the rest of our portfolio.

I would need A LOT more stock shares to catch-up to my largest ETF holding. Over the years, mostly since 2016, I’ve been buying more ex-Canada assets – in the years before, during and after the pandemic as my “when in doubt” purchase when I have money to invest.

This post summarizes why we own low-cost ETF XAW – XAW remains our top overall holding.

Buying and holding some low-cost equity ETFs are likely to do wonders for your wealth-building power. I own a few. But, investing in a basket of individual stocks can be very financially rewarding too!!!

The greatest investor of our time has invested this way.

With any investing approach, only you can decide what is right for you. This is largely based on your goals, investing style, tolerance for risk/losses, and your behavioural temperament. When in doubt, indexing can work and work very well. However, other forms of investing can deliver outstanding results too.

What top stocks do you own in your portfolio? Why? Do any low-cost ETFs make up the bulk of your portfolio? If so, why? Happy to read all comments below. Send them along!

Happy investing.

Mark

Notes: 

1. Charts above are for illustrative purposes. I have benchmarked each stock against one of my favourite low-cost ETFs in Canada: XIU (due to the blue-chip holdings XIU has). When in doubt, consider XIU for your Canadian portfolio. No stock selection required and you’ll bound to earn great long-term returns. 
2. None of these individual stocks are recommendations for purchase. 
3. You can backtest some of your stocks and ETFs using Portfolio Visualizer. A free tool. 
4. I recognize my hybrid investing approach (stock investing coupled with low-cost ETFs) might not appeal to everyone. All good. When in doubt, do consider just low-cost ETFs. You can own a world of stocks in just one ETF these days – see my link below. This way, you can still invest on your own, own a world of stocks, while saving big money avoiding advisor or money manager fees. My hope is that no money managers nor advisors were harmed by my comments.