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The U.S. 30-year yield has dropped to its lowest point since January even as inflation has heated up. Growth peaked in April. Central banks are deliberately behind the curve, letting inflation run hot and allow this recovery to play out. That's happened. Now, the path of the pandemic has gotten uncertain in recent weeks, plus economic growth is poised in the first half of 2022 to cool off. So, altogether, it's likely interest rates will rise. It's too soon to tell the impact of the new variant. Compare this to Delta which emerged over the summer, and people were by then aware of the seasonality of the virus. How is the new variant effecting human behaviour? With new variants, populations are less and less effected, based on metrics like restaurant reservations and gas demand. The data says that each wave of the virus and its case counts effects people less. It's important to keep an eye on human behaviour. Also consider the long-term outlook of 5-10 years. Canadian dividend stocks are attractively valued on that basis.

Do the Canadian banks still hold a competitive advantage over small fintechs? Yes and no. Yes, given banking regulations which limit competition. No, they're not as agile or forward-looking as the fintechs. These are two very different investments, two different risk-rewards. PE and PB both classes have hit the midpoint historically. As interest rates rise it will be positive for business, but negative to the amount of loans issued. Banks remain well-protected and necessary for society. Banks also pay solid dividends and are actively raising them--expect that for the next few quarters.

Pembina, Transcanada and Enbridge as a dividend investment over 5 years? He owns all three. They all pay over a 6% dividend on average. ENB is down on the news that the Canadian regulator has rejected the tolling agreement on the main line. He doesn't see this as a huge deal for ENB though; obviously it would be nice to see at least of this contracted. Perhaps they went too hard on the amount of contracting they were seeking. But it's a mess, given the lack of pipeline capacity. Investors need to be focused on LNG in the middle/later part of this decade which will really boost demand for natural gas and its infrastructure; all three companies will participate in this, though ENB the least. ENB has new oil pipeline capacity with their Line 3 replacement strategy completed last month. Compounding the 6% dividend alone means the share doesn't need to perform much to deliver you a good return over 5-10 years.

it's underperformed the bank ETF since inception. So, the covered call isn't adding value, but rather generating fees.

FSZ vs. ZWU Both pay around an 8% dividend, which at that level it's probably not pure dividend you're getting on a long-term basis. About 6.5% is the limit for a sustainable dividend level. Plus, you get worries about the future of hydrocarbon demand. He himself doesn't see this, but it's a scenario to consider. Both FSZ and ZWU, you're getting some of your capital back to fund their dividends--this is not sustainable. ZWU has underperformed the equal-weight bank ETF since inception. So, the covered call portion isn't adding value, but is an additional-fee generator. He's rather buy the underlying stocks. Fiera has done a ton of purchases, not all of them cheap or good. Their wealth management business has been positive in the last 18 months, but you risk a market correction and a major re-pricing of assets, more so than any Canadian bank.

In a non-registered, RRSP or TFSA over 10 years? It depends on your situation and the size of each account. Start with the TFSA--the more you grow tax-free, the more it benefits you. Remember, you can't claim a loss in a TFSA. TD is his largest bank holding and the best bank.

They had a big run at end-2020, but have come off this year. Long term, NPI remains very attractive. They produce offshore wind power globally and are a potential take-out candidate given their scope. ESG is a strong tailwind. It's one of his largest holdings and he's buying at current levels.

It's near its all-time high. It's a very steady company. Still buying it, averaging into it. Pays a steady 5.5% dividend.

Growth prospects? They went through a difficult time in the middle/end of the last decade. ALA is well-positioned now though. They've had a big change in their counter-parties with CNQ taking over Painted Pony, and a US major taking over another Canadian company; so the quality of their counter-parties has risen. What's also missed in their story is their steady utility growth in the U.S. where they were slammed for buying that utility, but those critics are now gone as ALA is enjoying steady 8% rate-based growth to boost ROE and deleverage their balance sheet a lot. He expects a dividend increase soon. He likes it and it remains one of his biggest holdings.

(A Top Pick Nov 04/20, Up 22%) Definitely would buy it again. The stock was on a nice trend until they adjusted down their dividend growth. The market took it negatively, but he notes that the dividend is nearly 6% and it's grown 7.5% annually for the last 10 years, doubled the dividend in the last 10 years. He's happy with TC, and their positioning in LNG.

(A Top Pick Nov 04/20, Up 34%) It was a lot better a few weeks ago until they released their quarter. They stopped their dividend early in Covid and he bought this expecting them to reinstate that when things normalized. CAE has bought two companies this year which prevented that, but CAE is a cash generator that will restore that dividend. He'd like to see that dividend restored before they buy more. Their secret ingredient is exposure to business jets, which will see big growth. He's adding at current levels after a pullback.

(A Top Pick Nov 04/20, Up 11%) He continues to buy this. They've had nearly 5 decades of dividend increases, so it's an attractive total return over time. He still buys this. You can buy this and forget about it. It's one of the best-run companies in the world. He likes the outlook for electric utility given the future of e-cars and the greening of the power grid.

How do inflation and interest rates effect stock valuations We've had declining interest rates since 1983 which has fuelled stock valuations. Generally: 15 years ago a Canadian 10-year bond yielding 5% equalled a stock with a 5% dividend or a PE of 20x. Today, that Canadian bond yields, say 1%, but at a 100x PE with no chance of appreciation at maturity. Historically, stocks trade at 10-25x PE. When interest rates decline, this makes stocks more attractive. Inflation is rising, but he's waiting and seeing. Inflation was predictable given supply constraints and sudden demand. In time, these two forces will level out. Even a small interest rise will have a big chilling effect on the economy. He's not worried about inflation long term.

They have 35 years to go to be the next Fortis, but they're on the right track. The stock has dropped because of a big, unsurprising acquisition of Kentucky Power and did an equity issue. Long-term tailwinds are the greening of the energy grid and short. Renewable power stocks ran up after Biden was elected, then pulled back earlier this year. That froth came off. All headwinds are temporary though. He's been buying at current levels and believes in it long-term. The grid is becoming greener. He's positive all green energy stocks. AQN pays a steady dividend.

Manulife vs. Canadian Tire as a dividend play He nearly made MFC a top pick today. He'd certainly buy. They just hiked their dividend and in the US they offloaded a lot of long-term risk. He through the market would have been more positive about the latter. Pays a 5.5% dividend now. Catalysts are head driven by new managers. He prefers MFC over Canadian Tire which faces rising input costs, lots of competition and weaker management. That said, CT is a decent investment.