In 2020, the pandemic showed an example of what could happen to “stable” dividend stocks like the big bank stocks. Indeed, when there’s economic uncertainty, the big Canadian bank stocks, which are typically viewed as blue-chip companies, will fall hard, too.
Here’s how the Big Six Canadian banks fared during the pandemic market crash last year. From peak to trough, Royal Bank of Canada (TSX:RY)(NYSE:RY) stock dropped about 33%, Toronto-Dominion Bank stock fell 34%, Bank of Nova Scotia stock declined 37%, BMO stock fell 42%, CIBC declined 35%, and National Bank of Canada (TSX:NA) dropped 47%.
In fiscal 2020, the banks increased their provisions for credit losses to set aside more money for an expected higher level of bad loans. Logically, they set aside more than needed.
As it turned out, the results weren’t that bad. In the last fiscal year, National Bank’s and RBC’s earnings were the most resilient, with their adjusted earnings per share falling about 5% and 12%, respectively.
Are you sitting on nice gains in your Canadian bank stocks?
If you were lucky and courageous enough to buy any of the big Canadian bank stocks during the pandemic market crash, you’re likely sitting on nice gains.
Let’s say you picked up RBC shares for an average price of about $90 per share. By now, you’d be sitting on price gains of about 30% on that position.
If you bought National Bank shares at about $55, your unrealized gains would be approximately 55%.
Thinking of selling your Canadian bank stocks?
Some investors might be tempted to book those outsized gains. After all, the long-term average stock market returns are only about 7%.
However, you might choose to hold the bank shares for multiple reasons. The Big Six Canadian banks demonstrated their strength and ability to recover in economic downturns.
About a decade prior to the pandemic, their financial results were also defensive against the global financial crisis. That is, their stocks fell substantially by up to 50% during that crisis, but their financial results weren’t half as bad — with some even increasing their adjusted earnings per share during that period!
In other words, when the bank stocks fell meaningfully, it was time to load up their shares. Other than getting nice price appreciation when the macro environment normalizes, investors will also enjoy safe dividend income.
By buying low, bank shareholders secure high yields on their shares. This is a passive-income stream you can enjoy for a very long time.
By buying RBC and National Bank at $90 and $55, respectively, during the pandemic market crash, your effective dividend yields on those bank shares would be roughly 4.8% and 5.1%, respectively.
The big Canadian bank stocks have more than recovered from the market crash last year. Congratulations if you bought (more) shares during the crash.
Holding the banks as a part of a diversified portfolio is a good idea. They provide nice passive income and are resilient against economic downturns. When the market crashes, it could be an excellent time to buy more shares to hold for perpetual passive income.
As usual, keep your stock/sector allocations in check. If one has 50% of their stock portfolio in the banks, they should highly consider diversifying elsewhere.
Speaking of stocks that are worthy of holding…
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Kay Ng owns shares of Royal Bank of Canada, The Bank of Nova Scotia, and The Toronto-Dominion Bank. The Motley Fool recommends BANK OF NOVA SCOTIA.
U.K. advises limiting AstraZeneca in under-30s amid clot worry
British authorities recommended Wednesday that the AstraZeneca COVID-19 vaccine not be given to adults under 30 where possible because of strengthening evidence that the shot may be linked to rare blood clots.
The recommendation came as regulators both in the United Kingdom and the European Union emphasized that the benefits of receiving the vaccine continue to outweigh the risks for most people — even though the European Medicines Agency said it had found a “possible link” between the shot and the rare clots. British authorities recommended that people under 30 be offered alternatives to AstraZeneca. But the EMA advised no such age restrictions, leaving it up to its member-countries to decide whether to limit its use.
Several countries have already imposed limits on who can receive the vaccine, and any restrictions are closely watched since the vaccine, which is cheaper and easier to store than many others, is critical to global immunization campaigns and is a pillar of the UN-backed program known as COVAX that aims to get vaccines to some of the world’s poorest countries.
“This is a course correction, there’s no question about that,” Jonathan Van-Tam, England’s deputy chief medical officer, said during a press briefing. “But it is, in a sense, in medicine quite normal for physicians to alter their preferences for how patients are treated over time.”
Van-Tam said the effect on Britain’s vaccination timetable — one of the speediest in the world — should be “zero or negligible,” assuming the National Health Service receives expected deliveries of other vaccines, including those produced by Pfizer and Moderna.
EU and U.K. regulators held simultaneous press conferences Wednesday afternoon to announce the results of investigations into reports of blood clots that sparked concern about the rollout of the AstraZeneca vaccine.
The EU agency described the clots as “very rare” side effects. Dr Sabine Straus, chair of EMA’s Safety Committee, said the best data is coming from Germany where there is one report of the rare clots for every 100,000 doses given, although she noted far fewer reports in the U.K. Still, that’s less than the clot risk that healthy women face from birth control pills, noted another expert, Dr. Peter Arlett.
The agency said most of the cases reported have occurred in women under 60 within two weeks of vaccination — but based on the currently available evidence, it was not able to identify specific risk factors. Experts reviewed several dozen cases that came mainly from Europe and the U.K., where around 25 million people have received the AstraZeneca vaccine.
“The reported cases of unusual blood clotting following vaccination with the AstraZeneca vaccine should be listed as possible side effects of the vaccine,” said Emer Cooke, the agency’s executive director. “The risk of mortality from COVID is much greater than the risk of mortality from these side effects.”
Arlett said there is no information suggesting an increased risk from the other major COVID-19 vaccines.
The EMA’s investigation focused on unusual types of blood clots that are occurring along with low blood platelets. One rare clot type appears in multiple blood vessels and the other in veins that drain blood from the brain.
While the benefits of the vaccine still outweigh the risks, that assessment is “more finely balanced” among younger people who are less likely to become seriously ill with COVID-19, the U.K’s Van-Tam said.
“We are not advising a stop to any vaccination for any individual in any age group,” said Wei Shen Lim, who chairs Britain’s Joint Committee on Vaccination and Immunization. “We are advising a preference for one vaccine over another vaccine for a particular age group, really out of the utmost caution rather than because we have any serious safety concerns.”
In March, more than a dozen countries, mostly in Europe, suspended their use of AstraZeneca over the blood clot issue. Most restarted — some with age restrictions — after the EMA said countries should continue using the potentially life-saving vaccine.
Britain, which relies heavily on AstraZeneca, however, continued to use it.
The suspensions were seen as particularly damaging for AstraZeneca because they came after repeated missteps in how the company reported data on the vaccine’s effectiveness and concerns over how well its shot worked in older people. That has led to frequently changing advice in some countries on who can take the vaccine, raising worries that AstraZeneca’s credibility could be permanently damaged, spurring more vaccine hesitancy and prolonging the pandemic.
Dr. Peter English, who formerly chaired the British Medical Association’s Public Health Medicine Committee, said the back-and-forth over the AstraZeneca vaccine globally could have serious consequences.
“We can’t afford not to use this vaccine if we are going to end the pandemic,” he said.
In some countries, authorities have already noted hesitance toward the AstraZeneca shot.
“People come and they are reluctant to take the AstraZeneca vaccine, they ask us if we also use anything else,” said Florentina Nastase, a doctor and co-ordinator at a vaccination centre in Bucharest, Romania. “There were cases in which people (scheduled for the AstraZeneca) didn’t show up, there were cases when people came to the centre and saw that we use only AstraZeneca and refused (to be inoculated).”
Meanwhile, the governor of Italy’s northern Veneto region had said earlier Wednesday that any decision to change the guidance on AstraZeneca would cause major disruptions to immunizations — at a time when Europe is already struggling to ramp them up — and could create more confusion about the shot.
“If they do like Germany, and allow Astra Zeneca only to people over 65, that would be absurd. Before it was only for people under 55. Put yourself in the place of citizens, it is hard to understand anything,” Luca Zaia told reporters.
The latest suspension of AstraZeneca came in Spain’s Castilla y Leon region, where health chief Veronica Casado said Wednesday that “the principle of prudence” drove her to put a temporary hold on the vaccine that she still backed as being both effective and necessary.
French health authorities had said they, too, were awaiting EMA’s conclusions, as were some officials in Asia.
On Wednesday, South Korea said it would temporarily suspend the use of AstraZeneca’s vaccine in people 60 and younger. In that age group, the country is only currently vaccinating health workers and people in long-term care settings.
The Korea Disease Control and Prevention Agency said it would also pause a vaccine rollout to school nurses and teachers that was to begin on Thursday, while awaiting the outcome of the EMA’s review.
But some experts urged perspective. Prof Anthony Harnden, the deputy chair of Britain’s vaccination committee, said that the program has saved at least 6,000 lives in the first three months and will help pave the way back to normal life.
“What is clear it that for the vast majority of people the benefits of the Oxford AZ vaccine far outweigh any extremely small risk,” he said. “And the Oxford AZ vaccine will continue to save many from suffering the devastating effects that can result from a COVID infection.”
Source: – CTV News
Facebook downplays ‘old’ breach exposing info on 533 million users
Facebook is downplaying the significance of a data breach that saw the personal information of 533 million of its users accessed online, saying the information is old and the vulnerability that was exploited was closed almost two years ago.
Over the weekend, Business Insider reported that personal information of Facebook users in 106 countries was found on a low-level hacking forum, free of charge. Cybercrime intelligence firm Hudson Rock calculated that almost 3.5 million Canadians were included.
Information included names, phone numbers, locations, birth dates, email addresses and other identifying details. No financial or payment information was accessed, Facebook said.
In a statement on its website Tuesday the social media giant said the information was gathered via a vulnerability the company fixed almost two years ago, and disputed that it was a hack.
Data scraped, not hacked: Facebook
“It is important to understand that malicious actors obtained this data not through hacking our systems but by scraping it from our platform prior to September 2019,” said product management director Mike Clark.
Scraping refers to the act of gathering information that is already out there but somewhat hidden on public databases.
The company said whoever collected and assembled the data did so by abusing the contact importing service, which allows users to find other people in their network on Facebook.
Facebook said whoever did it seems to have uploaded a large set of phone numbers to see which ones matched Facebook users.
David Masson, director of enterprise security at cybersecurity firm Darktrace, says the information has likely been out there and spread widely for a while, before being outed recently.
“It’s been on the Web for quite a while, probably for sale to people,” he said. “But now somebody’s just offered it up for free.”
Building a profile
Greg Wolfond, CEO of data security firm SecureKey, said that in a vacuum, much of the information taken can seem innocuous and harmless, but when taken together can be very dangerous.
“What the hackers do is they try and get little bits of data about you in this case something like your phone number,” he told CBC News in an interview. They can then combine that with other bits of information — an address, a full name — and start building a profile.
What’s most dangerous is once they have gathered enough to attempt to gain access to a cellphone account. With the right combination of information, a telecom company may allow someone walking in to port the account number to a new phone.
“They take over your phone, and within minutes of taking over your phone, they’re trying to get into your bank account, to get into your Facebook account, your Google account, whatever you use that phone as your recovery for,” he said.
Typically, consumers are urged to fight data theft by doing things like changing passwords frequently, and making the complex. But those things are of little use when companies claim the right to reams of data about their users, and promise to keep it safe.
“Empowering individuals to share their data and putting a responsibility on parties that have the data to keep it secure,
is super important,” he said.
Not Facebook’s first user-info incident
Although the company is downplayed in the incident, it is far from the company’s first misstep with user info.
In 2018, the social media giant disabled a feature that allowed users to search for one another via phone number following revelations that the political firm Cambridge Analytica had accessed information on up to 87 million Facebook users without their knowledge or consent.
In December 2019, a Ukrainian security researcher reported finding a database with the names, phone numbers and unique user IDs of more than 267 million Facebook users — nearly all U.S.-based — on the open internet.
Spark15:32Digital security expert shares tips on how to protect your data while working remotely
Facebook says it will “continue aggressively go after malicious actors who misuse our tools,” and touted its dedicated team focused on this work” but Masson says users shouldn’t make the mistake of assuming that the company’s size and scope somehow make them better equipped to keep user data safe.
“It doesn’t matter how big or sophisticated you are, they can be attacked,” he said.
Like many breaches, this one was only discovered long after the fact, and that’s because the technology company’s use isn’t keeping up with the ones the hackers are using.
“There are better technologies that actually work on what happens once the bad guys get inside your network rather than when they’re banging on the door outside. So people [have] got to realize this will happen again.
Source: – CBC.ca
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