3 stocks Canadians should give thanks for, 3 turkeys to avoid

Thanksgiving is a time for Canadians to sit down to dinner with friends and family, and take time to reflect on their fortunes.

And while the changing cultural makeup of the country has revised the traditional Thanksgiving feast over the years, it's hard for investors of any background to reflect on their fortunes without some turkey appearing on the menu.

First, let's give thanks:

* The stock market giveth value: If you're a prudent investor a well diversified portfolio should have made you at least a bit richer. The strong Canadian dollar has given more buying power for Canadians to top up their portfolios with beaten down U.S. stocks.

So far this year the S&P 500 — a cross section of blue-chip U.S. stocks — is up 15 per cent. Even General Electric, the poster boy for corporate America's fall from grace, is up 28 per cent this year.

For investors who hung back in Canadian equities the resource-heavy Toronto Stock Exchange managed to creep up three per cent so far this year despite a roller coaster ride for commodities.

* The stock market giveth dividends: Thanks to solid corporate earnings the TSX pays an average yield of three per cent and the S&P 500 pays 2.5 per cent — a post-meltdown high according to S&P Indices. Even growth technology companies like Apple pays 1.6 per cent from its huge cash reserves. Microsoft is even more generous with a yield of three per cent.

* Slow and steady growth: Slow economic growth means low borrowing rates on our bloated mortgages and lines of credit.

It also means low inflation. Canadian growth is below two per cent. Much of the advance has been food and gasoline prices but many big ticket consumer items have been falling. Think about that when you're watching football on that new flat screen TV.

…and now the turkeys:

* Low bond returns: Slow economic growth has its drawbacks, however, for fixed-income investors — especially retirees with little tolerance for risk who rely on income for their day-to-day living expenses.

A five-year government of Canada bond, for example, yields 1.26 per cent annually. That's below inflation.

* High mutual fund fees: For most Canadians the only way to get exposure to the broader markets is through mutual funds. A big chunk of the paltry gains we're getting from the markets is being eaten up by fees.

As an example, suppose the TSX managed to gain five per cent this year. The average annual fee, or MER, on a Canadian equity fund is 2.5 per cent of invested assets. If the fund manager matches the index return, that leaves 2.5 per cent for the investor.

* Politicians: Specifically European politicians — specifically Mariano Rajoy. While Spain struggles with 25 per cent unemployment, severe cuts to social services and teeters on the brink of a financial collapse, the Spanish Prime Minister and five of his cronies were reported to have gorged themselves on fillet mignon, turbot, seven bottles of wine and ten beers on a flight from Poland to Spain following a recent soccer match — all on the taxpayers' dime.

It wouldn't be so bad if it was an isolated act of political buffoonery but self-serving, short-sighted politicians are sabotaging Europe's fragile recovery and global market confidence. Every bone-headed move and appeasement tactic takes money out of our savings — and that's personal.

Political leaders everywhere who don't get the true meaning of austerity are destined to get a harsh lesson on the subject from crowds growing in number and anger, who could very well serve them up on a platter.