Mike Higgs (aka yielder)

Roger Nusbaum's Market Crash Shelter

<i>Again this is about my opinion that in a U.S. collapse Canada would not be spared. I'm a big fan of Canadian banks ex-collapse, I own one personally and for clients, but I would expect it to get hit in the context of this question.</i>

If you are talking economic collapse of the US, there won't be anyplace to hide. If you're talking about somthing on the scale of the "U.S. blowup of a few years", then your concerns about large-cap, blue-chip dividend payers are generally misplaced. Yes, you'll see price declines but the dividends are likely to remain intact absent a catastrophic economic collapse. Canadian banks are no different in that regard from any other major global bank. They have taken huge earnings hits at various times over the last 30 years - oil patch loans in the late 70s, Third World debt in the early and mid 80s, the deep recession of the late 80s/early 90s, dot.con loans, Enron-related fines but none has ever cut a dividend. Dividends have been frozen for a couple of years and the rate of increase has slowed at times but the dividends have remained intact. If the dividend is determined to be safe and sustainable, then price declines are a fabulous opportunity to buy an income stream at a bargain basement price. Having said that, diversify because s*** happens.

Mike