Investing

Which of the big 5 banks do you like right now?

  • Last Updated:
  • Apr 16th, 2020 5:30 pm
[OP]
Deal Addict
Mar 21, 2013
2598 posts
3254 upvotes
Edmonton

Which of the big 5 banks do you like right now?

Or would you just buy some of all of them?

30 year investing horizon.

Here's performance over the last 5 years compared to VCN index.

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27 replies
Deal Fanatic
Jul 7, 2004
5734 posts
1409 upvotes
I don't think you can go wrong with any of them really. I went with TD after reading good news on them... that doesn't help at all lol.
Honestly I'd just pick a couple and split it even. They arent' going anywhere imo. Actually bought my first CAD bank stocks at the very bottom.
Jr. Member
Aug 29, 2018
106 posts
156 upvotes
Toronto
I’d just buy ZEB - BMO equal weight bank index ETF. Sure the MER is 55bps but then there’s the convenience of only one purchase, no rebalancing, DRIP, etc as opposed to purchasing the big 6 individually.
Sr. Member
Nov 24, 2013
937 posts
391 upvotes
Toronto
I like TD. Like their business strategy.
Jr. Member
Dec 13, 2015
136 posts
37 upvotes
Red Deer, AB
So belief is that something like TD will bounce all the way back?
Sr. Member
Nov 24, 2013
937 posts
391 upvotes
Toronto
breezy11 wrote: So belief is that something like TD will bounce all the way back?
My take is that it will take some time to bounce all the way back - maybe a couple of years.

It could bounce back a lot sooner if monetary policy is loose :)
Sr. Member
User avatar
Feb 25, 2018
551 posts
206 upvotes
yuk. Canadian dollar will probably tank. Bankruptcies, low oil, foreclosures etc. Why bother? Amazon will hit 3000 in a year or two.
Deal Fanatic
Feb 9, 2009
9043 posts
6525 upvotes
I own all except royal.

But I did buy a bunch of Cibc during this downturn cause off the fat and juicy yield and a little of the other 4. During the last downturn in 2009 I bought a whole bunch of Td.

But all of the major 5 are run well overall with minor hiccups here and there.

But 30 year horizon like I do it won’t matter all of them will be vastly higher. Your dividends in 30 years will likely surpass the price you paid for the share today.
Newbie
Sep 6, 2018
78 posts
58 upvotes
DaveVentura wrote: yuk. Canadian dollar will probably tank. Bankruptcies, low oil, foreclosures etc. Why bother? Amazon will hit 3000 in a year or two.
because they don't understand opportunity cost lol
[OP]
Deal Addict
Mar 21, 2013
2598 posts
3254 upvotes
Edmonton
jaysdt wrote: because they don't understand opportunity cost lol
Clever. So other than AMZN, what else is part of your no lost opportunity portfolio?
Newbie
Sep 6, 2018
78 posts
58 upvotes
Blubbs wrote: Clever. So other than AMZN, what else is part of your no lost opportunity portfolio?
actually, i believe the average retail investor should just buy the index opposed to selecting individual companies. most people here are not creating financial models or looking at forward free cash/earnings growth like we do in the industry. let me ask you - why do you want to buy the banks? is it because you think it's "safe"? if you want to just randomly pick companies, you're much better off with picking tech stocks because they might actually beat the index and i don't see financials beating the index in the next 5-10 years imo.
Member
Nov 8, 2009
447 posts
145 upvotes
jaysdt wrote: actually, i believe the average retail investor should just buy the index opposed to selecting individual companies. most people here are not creating financial models or looking at forward free cash/earnings growth like we do in the industry. let me ask you - why do you want to buy the banks? is it because you think it's "safe"? if you want to just randomly pick companies, you're much better off with picking tech stocks because they might actually beat the index and i don't see financials beating the index in the next 5-10 years imo.
I agree. Personally I'm not too fond of the bank's right now. They had a good run up but I feel thy are always the first sector that people jump into because they are "banks" and "everyone" has to own banks. I foresee more loan losses coming their way plus their earnings will be hit by the lower interest rates. I just think there are more opportunities elsewhere at this point in time. I had bought some on the way down but sold them.
Banned
Mar 24, 2020
99 posts
72 upvotes
Banks overall are a terrible play right now because low interest rates will kill their margins.

Mortgage origination is basically 0.

Defaults will likely rise.

Lots of oil debt.

With that being said, 30 year time horizon is long enough that this blip, even if it's 5 years, won't impact you at all.
Sr. Member
User avatar
Feb 5, 2017
831 posts
645 upvotes
made a killing on banks in the last month.. only own 50K worth of them now.... on a 2M+ portfolio
would not add at those prices. Nope !
Deal Guru
Jan 27, 2006
13806 posts
6730 upvotes
Vancouver, BC
ParadigmWM wrote: I’d just buy ZEB - BMO equal weight bank index ETF. Sure the MER is 55bps but then there’s the convenience of only one purchase, no rebalancing, DRIP, etc as opposed to purchasing the big 6 individually.
If I was going to own something for the next 30 years, why would you want to pay someone any money every year to do basically nothing? Sure you bring up rebalancing, but I would argue that you don't may not need to rebalance too often as the major banks typically move as a group over time. And if you do want to do some rebalancing, then just buy more of the one you want to add to over the next 30 years.

Besides, 55bps might not sound like much but once the size of your investment in banks starts getting up there, the MER will easily exceed any transaction cost you might incur.

Having said the above, I do agree that something like ZEB will give diversification across the banks in a relatively cheap way for those who are starting out in investing. But once holding starts getting larger, you are better off to sell ZEB and buy the individual bank stocks.

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