Again, look to those all-weather portfolio models. If you are a retiree or near-retiree, be prepared for anything. If you are in the accumulation stage, you are being offered lower prices. Add new monies and reinvest portfolio income on a regular schedule. 

Energy stocks soar

All Canadian investment sectors are down year-to-date—except for energy. The oil and gas sector has performed very well because of a supply shortage. Goldman Sachs increased its Brent oil price forecast by US$10 to US$135 a barrel for the second half of 2022 and into the first half of 2023.

Supply just cannot keep up with increasing energy demand. Energy companies have little incentive to make major investments. There may be some tweaks along the way to increase production in modest fashion. But given the global desire and need to shift from black (oil) to green energy, oil companies will be reluctant to step up in any meaningful way. 

The oil companies will pump and print. They are incredibly profitable. They will produce oil and gas and return value to shareholders by way of generous and growing dividends and share buybacks. 

In fact, in early May, I took all of my handsome profits from iShares Capped Energy Index ETF (XEG), and the Ninepoint Energy ETF (NNRG) and moved to an energy dividend approach. 

Source: BlackRock, XEG distributions 

In the above chart, we can see the growth in the energy index distributions. I am more focused on dividends by holding only generous dividend payers and companies that have suggested they will be paying special dividends. 

I’ve traded energy stocks’ price risk with dividend health risk. Being in the semi-retirement stage, that suits me just fine. The energy dividends will more than cover our total gas bill at the pumps. And I did harvest some of the energy stock profits (from those exchange-traded funds, ETFs) to pay for this Summer’s driving needs. We are currently down east. 

Source