Topic: How To Invest

What is Pat’s commentary for the week of December 6, 2022

Article Excerpt

We’ve long recommended payment card issuer American Express as a great way for investors to diversify their Finance sector holdings beyond the big Canadian and U.S. banks. The stock took a hit in 2016 when warehouse retailer Costco ended its long-term alliance with Amex and selected Visa as its exclusive credit card partner for its U.S. stores. (Note—Costco recently formed a new partnership with CIBC and Mastercard for its Canadian outlets.) In response to the loss of Costco, Amex expanded its spending on rewards and other incentives. That has helped attract new cardholders and increased spending per user. As a result, the stock rose from just over $50 in 2016 to $138 in early 2020. Amex then dropped to $67 in March 2020 as the COVID-19 pandemic shut down travel, restaurants and entertainment venues. Now that economy has re-opened, the stock has surpassed that 2020 peak. We feel Amex’s future remains bright, even if the economy weakens in 2023. That’s mainly because its focus…