Thursday, 28 January 2016

Long Term Growth Defined

So what is Long Term Growth within Neu Grufti?

Long Term Growth is the old school 'buy and hold' philosophy. While it may well contain speculative stocks or value stocks, the general core of Long Term Growth is picking something that I won't be letting go of within the next ten years. So it's generally an eclectic mix of Canadian (covered here) and US (covered in my next component update) stocks.

Alliance Grain Traders (TSX:AGT) recently underwent a name change to AGT Food and Ingredients, which I'll probably start using once I get used to it. That name change covers why it's here. AGT is a pulse processor and shipper as well as food ingredient company that has global exposure. As they are focused primarily on pulse crops, they are also riding the wave of people looking for alternatives to long grains, and they have recently opened a center in Minot for food ingredient processing. Everyone needs to eat, that's why this is here.

Brookfield Renewable Energy (TSX:BEP.UN) is engaged in the production and delivery of power through renewable sources on a global basis. Even a cursory glance of my portfolio will show a bit of a heavy weight on the power and energy side, and it's due to the simple fact that electricity runs the modern world, and those who produce it tend to do so under long term contracts with Governments and their populations. Brookfield has Canadian and US exposure, but also has a large presence in Brazil, Wind Farms in Europe, and has recently finalized the purchase of one of Columbia's largest renewable energy producers. They also pay their dividend in US currency, which protects the revenue stream from fluctuations in the Canadian dollar.

Canadian Apartment Properties REIT (TSX:CAR.UN) boils down to the simple fact that as well as eating and keeping the lights on, people need a roof over their head. Why be a landlord when you can own a landlord and collect on the rents? CAP REIT is one of Canada's largest landlords, with holdings in almost every Province.

Capital Power (TSX:CPX) is another power generation company, although more traditional than Brookfield in that they own several coal burning power plants in Alberta. However they have been slowly moving over into Natural Gas generation as well as renewable, so this holding is more to keep one foot in the old school of power generation while things transition over to renewables.

Corby Spirit and Wine (TSX:CSW.A) is a long term play on the fact that everyone loves their vices, and Corby Spirit and Wine owns some of the most popular brands in Canada when it comes to Whisky, Rum and Vodka. In good times and bad, people drink.

Innergex Renewable Energy (TSX:INE) is another renewable energy provider, although focused in Canada. I own them for the same reason I own Brookfield, as power generation isn't going away any time soon, and the switch to renewable sources from fossil fuels is going to be advantageous to companies like this.

RBC Global Corporate Bond Fund (RBF1009) is focused on owning investment grade corporate bonds, and as any balanced portfolio needs a mix of equities and fixed income. I am not even close to a novice when it comes to fixed income and bonds, so rather than purchase individual bonds, I am more inclined to look at ETFs and Mutual Funds for those particular aspects of my portfolio. In the Online Investing world, funds like this have a D series where online investors pay lower management fees than they would through a broker, so Canada's traditionally high mutual fund fees didn't turn me away from this one.

Surge Energy (TSX:SGY) happens to be one of the big drags in my long term growth at the moment, but that's a product of the oil industry being in the middle of a bust in their traditional boom bust cycle. Long term (as in, the next 10 years), I expect it to see it rise, and I wanted a mid range producer that is capable of providing a cash stream that isn't focused on hyper accelerated growth, and had a solid balance sheet. Surge fit that profile.

TD Monthly Income Fund (TDB622) is largely in the long term growth portfolio to provide additional monthly income to help keep assets balanced. I use proceeds from the Fund to keep the portfolio relatively balanced. I wanted something that was a fire and forget purchase that could produce a reasonably stable monthly income within the portfolio for 'dry powder'.

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