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The global economy may be on the brink of recession but there is still a lot of money to be made in the stock market. It’s just a matter of knowing where to look.
My Internet Wealth Builder newsletter Growth Portfolio is a case in point. In the slightly more than six months from late February to Sept. 10, the portfolio gained over 35%. That was well ahead of any of the major market indexes.
That wasn’t a one-off. In the 13 years since the portfolio was launched in 2012, it has produced an average annual compound rate of return of just over 26%.
To achieve returns of that magnitude, an investor must be willing to assume above-average risk. The stocks in the portfolio are of the high-risk/high-return variety and would be vulnerable in a market selloff. There are no bonds and little cash to provide a cushion. This is essentially a momentum portfolio, and that type of investing isn’t right for everyone. I certainly would not recommend that all your investments be confined to these eight securities.
But there is a way to track this portfolio while lessening the risk. Designate a portion of your investable assets as “speculative” and use that money to replicate our Growth Portfolio. The percentage will depend on your age, objectives, and risk tolerance. Younger investors might commit up to 25% of their assets to this portfolio. Older investors should be more conservative.
The Growth Portfolio was launched in August 2012. It had an initial value of $10,000 and a target annual growth rate of 12%. The portfolio has 100% exposure to the equity markets.
Here are the securities that make up the current portfolio, with an update on how they have performed since our last review in late February. Prices are as of the close on Sept. 10.
iShares US Aerospace & Defense ETF (CBOE BZX: ITA). This ETF invests in the U.S. defense and aerospace industry. We added it to the portfolio in 2021, and it has performed well. The fund posted a gain of US$45.43 per unit in the latest period, and we received two distributions for a total of US$0.435 per unit.
Alimentation Couche-Tard (TSX: ATD). The months-long attempt to acquire the 7-11 chain of convenience stores from its Japanese parent ended up going nowhere, so now management is looking for other growth opportunities. As a result, the stock has sputtered, gaining only $2.99 since our last review. We received two quarterly dividends of $0.195 each.
WSP Global Inc. (TSX: WSP). Montreal-based WSP is an international engineering and design firm. This stock continues to perform well, gaining just over $27 a share in the latest period. We received two dividends totaling $0.75 per share.
Fairfax Financial Holdings Ltd. (TSX: FFH). We added this Canadian conglomerate at the time of our last review. The company has international interests in property and casualty insurance and reinsurance. The shares are up $381 in the past six months.
NVIDIA Corp. (NSD: NVDA). Nvidia makes computing chips for AI processors, and its sales keep beating even the most optimistic expectations. We added it to the portfolio in February 2023, and it is up almost 650% since. The stock pays a tiny quarterly dividend of a penny a share.
Costco Wholesale Corp. (NSD: COST). Costco shares hit a bump, losing $65.69 in the latest period. We received two quarterly dividends for a total of $2.60 per share.
CGI Inc. (TSX: GIB.A). This is a Montreal-based international consultancy company that has been on our recommended list since August 2012. We added it to the Growth Portfolio in 2023 at $140.51. It started off well but has slumped this year with the shares losing $30.62 in the latest period. We received two quarterly dividends of $0.15 a share.
Celestica Inc. (TSX: CLS). This is a remarkable story. The tech stock had muddled along for years, not doing much of anything. Then came the AI revolution and Celestica’s product mix was in the right place at the right time. The stock, which we added to the portfolio at an average cost of $71.68 a share, has skyrocketed, more than doubling in value in the latest six-month period. The company doesn’t pay a dividend, but do you care?
Cash. Our total cash plus retained earnings was $3,435.08. We kept it in the EQ Bank 30-day notice savings account, which paid 3.05%. We received interest of $52.38.
Here is how the portfolio stood at the close of trading on Sept. 10. Commissions are not considered. The U.S. and Canadian dollars are treated as being at par, but obviously, gains (or losses) on the American securities are increased due to the exchange rate differential.
As far as I can recall, this was the best six-month gain since the portfolio was launched. Our stocks were up 35.31%, with big contributions from ITA, FFH, NVDA, and CLS. The only losers were Costco and CGI.
The total value of the portfolio (market price plus retained distributions) now stands at $202,580.51, from the original $10,000 we invested 13 years ago. Since this portfolio was launched, we have a cumulative return of 1,925.8%. That’s an average annual compound growth rate of 26.04%.
CGI hit an all-time high in late January but has been in a downward slide since. We don’t stick with losers for long in this portfolio, so we’re going to sell our position. This gives us a total of $9,048.90 to reinvest.
There is one corner of the market that is posting huge gains right now, but it not represented in this portfolio. That’s gold. Rather than choose a specific stock, we will buy 220 units of the iShares S&P/TSX Global Gold Index ETF (TSX: XGD) at $41.69, for a cost of $9,171.80. We’ll take $122.90 from cash to make up the difference.
This ETF invests in the top gold mining companies around the world. The largest holding is Newmont (15.7% of assets), closely followed by Canada’s Agnico Eagle Mines (13.86%). The fund has gained 98.45% so far this year.
All else stays the same, although I should comment on NVDA and CLS. Together, these two tech companies account for over half of the portfolio’s assets. Both are heavily involved in the AI boom.
That’s clearly a high-risk situation. In any other portfolio, I’d be selling off some of these positions to reduce the danger of a tech crash wiping out a big chunk of our profits. But the Growth Portfolio requires a roll-the-dice approach to maximize returns, so I’m letting our AI bet ride for now. We’ll revisit it at the next review.
Our total cash plus retained earnings is now $3,544.91. We will move it to Tangerine Bank, which is currently running a special promotion that pays 4.5% for five months on new accounts.
Here’s a look at the revised portfolio. I will review it again in my Internet Wealth Builder newsletter in late February.
As always, consult with your financial advisor before investing to ensure your choices align with your risk tolerance and financial objectives.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on X at X.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
For more information and details on how to subscribe to Gordon’s newsletters, go to www.buildingwealth.ca/subscribe.
Notes and Disclaimer
Content © 2025 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
Image: iStock.com/Ong-ad Nuseewor
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