Thursday 24 July 2014

New Buys , Sells , Brewery and Real Estate Updates

Been a bit busy to update my portfolio transactions but I decided to compile them all together now finally. Overall I barely added new capital in but did some tinkering with my portfolio.

RCI.B     Rogers -            $1000
HR.UN   H&R Reit          $3500
AX.UN   Artis Reit           $5290
CM         CIBC                 $3000
T             AT&T                $2180
PFE         Pfizer                $1510
IDV       Intl Div ETF       $5486
Total                               $21,980

AAPL    Apple                 $9860
BA         Bell Aliant         $6224
DOL      Dollarama          $5005
Total                               $21,089

$900 new capital invested
My updated portfolio holdings link

First off I will explain my Sells
  • APPL- I got called on a covered call I wrote for 100 shares. Bringing my total from 700 shares to now 600 which I do not mind. I am still overweight on APPL but the upside has been tremendous for me. I would like to be around 400-500 shares max with Apple but I think this next year will be huge for them with new product lines and strong iphone sales. I will probably hold my remaining shares until late 2014 and then start writing more covered calls then to slowly reduce my position.
  • BA Bell Aliant- BCE or other known as Bell the Canadian telecom giant which I also own is Buying Bell Alliant out taking them Private. My shares in BA will either get converted to Bell shares or cashed out so I decided to cash my shares out. In the 3 months I owned BA Bell Aliant I made a 17% gain and received a dividend. Not bad!
  • DOL Dollarama - After analyzing my portfolio I decided i wanted a bit more yield instead of growth and was looking for a place to cut some of it. Dol was very low yielding under 1% so I decided to cut it out. Also after further research the short term growth potential might be stalled a bit so it made my choice that much easier. Hopefully its not a stock I regret later as it often seems to be the case!

  Reason for my Buys
  • To pick up some yield from my Dollarama sale I picked up a bit more REITS. Canadian Reits saw a big 2013 dip and still has not fully recovered. I like dependable long track record Reits with high yields so that why I picked up Artis AX.UN and H&R HR.UN. They are both quite large and steady payers at 5.75% and 6.79% monthly paying dividend yield.
  • CM Cibc - I am bullish on Canadian banks and CM offered a good 4% dividend yield and has lagged other Canadian banks in 2014 so I decided to add to my position here.
  • AT&T and Phizer- Just added to my positions here with a lil bit of yield chasing with AT&T 5.2% yield and value chasing with Phizer PFE. Was just spreading money out from my Apple sale to boost my positions here. I would like to add a bit more to Phizer in the future as I feel they have much more growth potential left.
  • RCI.B Rogers small buy here just cost averaging down as the stock has been hit hard recently
  • IDV Ishares International Select Dividend ETF. Yes I know an ETF of all things! Looking at my asset allocation my international sector was lacking. With this holding I am still at only 11.5% International allocation in my portfolio which is still quite low. I would like to be at around 15-20 % in the future. The problem is for international stocks is that most are available on hard to reach stock exchanges. Yes there are several ADRs on American markets which I own but not some I am looking for. Buying the ETF is easy and allows me access to an easy basket of high dividend players located in Asia and Europe which I like. I will probably be boosting this holding in the future and also look to add a good dividend paying emerging markets ETF as well in the future to balance out my portfolio.

In conclusion

Overall I accomplished a few things with this tinkering of my portfolio. I reduced my weight in Apple which I wanted. I cut out some low yield with Dollarama and added some yield with Reits and supporting positions.

My new forward annual dividend total is now $15,258 from $14,686 thanks to the trades I made and a handful of dividend increases this month. An increase of $572 a year in dividends. My yield on cost has gone up overall as well from 3.55% to 3.60%. Not extremely high but pretty good for now since my portfolio was pretty much only formed only 3 months ago.

My future purchases will be more geared toward Canadian and International markets to get my portfolio more inline with a desired mix of 40-45% US equities 40% Canadian and 15-20% International.

My current mix is

Equity Allocation
          50.5% - American based stocks    227,643
          38.0 %  - Canadian based stocks  171,525
          11.5 %  - International stocks           51,488

                                      Total   450503

Other News

Brewery Startup - Things are coming along, Not much else to report here as still paperwork has to be processed and the building purchase is going through. Equipment is starting to be ordered and things look OK so far. One bit of good news is that I made a trip to My hometown of Vancouver and spoke to some of my friends. Turns out I had much more connections than I realized with the restaurant industry. Seems to me I could get the beer on tap in a few restaurants out there pretty easily. So looks like I can score a few accounts as a salesman. Problem is I have no experience so what I plan to do is to shadow the local sales guy we have and learn the ropes before I approach my contacts. I sure wouldn't mind some sales commissions here and there along with my profits.

Real estate- So I have been looking to downsize my home from about 1.35 million current market worth to about 900k to 1 million max to free up some capital. The problem is I do not see any product I am liking in my area in which I want to generally stay in. There was one or two contenders I was on the fence about but they both had pretty much non existent lot sizes which I did not like for privacy and kids playing reasons.Basically what I am looking for is a 2500-2900 sqft home no older than 15 years old with a decent lot of about 7000-8000 sqft which I think is more than suitable for my family of 4 which would cost about 900k to 1m in roughly about the same area and possibly in a cheaper area over.

Here are some stats of my home and home I am lookin for

                         Old Home      Possible New Home
Price                1.35 Million      1 Million max
Lot size sqft     10,000               6000-8000
Indoor sqft        3,300                 2500-2900
Property Tax     7800                   5500 max

So far it has been a bit discouraging. I love my area and do not want to live far away from it. I plan on sending my kids to one of the 3 private schools close to me so I dont want to live to far from the area. So now I have been thinking of other ideas since my house search has been a dud so far.

Building a new house. So now I am thinking of possibly building a home. I have had some experience in building homes in Vancouver but I always had plenty of help out there. So I would be coming into this alone out here in Victoria. I figure I could score a good lot 8000 sqft for about 500-600k depending on the area and proximity to the beach. I then would pay around $160-175 per square foot for building costs to have a nicely built, appointed home about 2700-2900 sqft so approx 430k- 505k in building expenses. So a total building and lot cost of approximately 930k to 1.1 million. It would take approximately a year to buy, build the new home and sell my current home. So with interest rates at about 3% and lower it would cost about $30,000 in interest a year to float the project bringing my total to about 960k to 1.13m. With doing this no doubt my new home will be worth over 1 million. A new home with those details would be worth about 1.1 to 1.4 million so there is some possible money to be made if I were to flip it as well.

There is some potential downsides as well. Markets could tank and my original home value could decrease in the year it takes to build. Real Estate cools and my current home sits on the market for longer than anticipated. Interest rates could very possibly rise and thus bring up my costs. The home build could take longer than expected further increasing carrying costs. My last home in Vancouver took me almost 2 years to build being so high end and niche so I am well aware of things taking forever at times.

Overall the upside outweighs the downside. Even if I am over budget by 50k and markets cool a bit I will still be in the green in my estimation. Building a home is no easy task and one I do not enjoy as it takes hundreds of hours. I am sort of an orderly perfectionist and I do not often jive well with late crappy tradesmen. The alternative is to pay a home building company to take care of everything but they often charge 15-20% and often have kickbacks from their own trades further lubing their greasy pockets. So essentially I would save nothing using a manager. I may just suck it up and take the plunge and do so myself.

So as of right now I am still looking for a downsized home, looking for potential building lots and will be visiting mortgage brokers soon to see what kind of rates I can get if I take out a mortgage on my current home. I am not sure what exact route I will take but I am investigating all options.

In other investment news

More Real Estate! So a possible opportunity presented itself to me. A friend of friend has a place for sale near me in Victoria. It is a triplex that brings in just over 50k a year in rent. Taxes and maintenance run about 10k a year so about 40k take home and the place is worth about 900k so about a 5.5% yield on the place. I am going to meet the owner this weekend and have a good look at the place to see what kind of shape its in and see how much wiggle room there is on the 900k valuation. Downsides is that its an old place built in 1943 so more than likely it will require ongoing repairs. Plus sides are is that it is in a very desirable area being half a block from the water and a big park and its walking distance to downtown which is a big plus for many. Also the lot is zoned for new duplexes which could be quite favorable if I decide to build one. Duplexes in that area sell for about 800-850k each unit and if I buy and build there it could be approx 200k in profit there for me. Might be worth locking in some debt to make the plunge there as well. Obviously it would be tough to juggle two big projects like this if I build a home for myself as well but I think I will take on one big project soon enough! If there is a deal to be had especially minus realtor fees then I may make a move on it. I need to bring in an anal home inspector to see the real problems underneath the surface before I jump in.

Sorry If I have been a bit inactive blogging and visiting other blogs but I have lots on the go right now. I find in life you have to be bold with your investments and complacency is for the weak. The strong stay on their toes and always look for new opportunities. So its time I turn over a few more stones and get hustling.

So what do you guys think of my stock tinkering and potential real estate deals? Am I overlooking anything?


  1. Some good calls, A-G.
    I like that instead of just selling your AAPL you decided to write covered call and let the market decide....Ive done that a couple of times and actually felt more comfortable than straight out just selling the shares from my portfolio.

    Some good picks as well - I am already overweight in financials/REIT, so I think I will be staying away from that sector. I am interested in the T and PFE trades. I have been looking at T for a while now and very tempted to buy at these levels. I still havent looked into the latest quarter results - I know that they have given up a bit on their profits to retain more customers and VZ had a better quarter than them. But overall, I am more bullish on T than VZ.
    As for PFE, I was thinking of adding more healthcare stocks, and I had it narrowed down to AZN (before the buyout offer after which the stock took off, but its pulled back a bit, so I might have another look now) and AMGN. I dont have any biotech and was interested in GILD and AMGN. But every passing day, the stocks keep shooting up - and I feel like I missed the opportunity. Maybe I'll just concentrate on rebuilding my cash position and wait for a pull back.


    1. Yah I like writing covered calls instead of straight selling. Allows good premiums in short term. My problem is watching calls more closely than my stocks which is a bad habit.

      Ya healthcare sector looks good long term and AZN and PFE look good right now. I have a few stocks in my watchlist which have shot up and it hurts my soul lol! I know what you mean man!

  2. Property tax of only $5500 on a $1mm home? Wow... I pay about $5800 on a $550K home. That's a good deal for you and bad deal for me. I hate our city council.

    Having a rental property is good if you're cut out for it and if you do your homework, as you say. Good luck with your new sales job. Selling beer instead of slinging beer. I like it!

    1. I hate property taxes! I also hate problem tenants! lol. But I am willing to put up with a lot for yield!

  3. Sounds like you've been extremely busy. I also prefer to sell calls if it's a position I'm looking to exit but it doesn't need to be done immediately. Great way to add a bit more cash from the holding.

    You've got a lot on your plate with the brewery, potential house build and potential new real estate investment. I was very close to going after a rental property but unfortunately missed out on this last one.

    1. stars have to align with real estate. So many factors can go wrong!

  4. AG, I would want a great deal more return for the headaches of renting than 5.5%. Your recent purchase of T gets you that. Your REITS are even higher yielding if your looking for real estate in particular. You do get the advantage of leverage via the loan, but would you be better off taking a home equity loan and investing in various high yielding stocks? Or, do you believe the property will appreciate at a market beating rate + give off a nice yield for the next 20 years?

    1. So true. Owning high yielding reits would be much less of a headache. Plus side to buying is capital appreciation and potential for redevelopment. But your idea is something I am reconsidering as well. I am going to meet with some mortgage brokers soon to see what rates I can pull out of my equity.

  5. AG,

    I like the T and the PFE purchases. Congrats on the 15k forward dividends. Hopefully I can reach that level sometime next March. Keeping adding more coal to the furnace!


    1. No doubt at your current rate MDP you will be surpassing me by next year. Your monster additions every week is mind boggling! Love your streak you got going as I am a very streaky guy myself lol.

  6. A-G,

    Congrats on crossing over $15,000 in forward dividend income. That's awesome!

    Seems like you've been really busy, my friend. And I thought I had a lot going on. You really grind it out!!

    Keep up the great work. Hope that brewery turns out fantastic. Really exciting stuff.

    Best regards.

  7. Hey A-G,
    I am bullish on AAPL until the end of the year. I am hoping their new products will bring the price over $100 into 2015. However I don't see myself holding for the next 30 years because tech stocks are always risky. I think I will play it out for the next few years and see where that takes me. I like the new buys and have also considered a position with T. I am just waiting on freeing up some more capital before making any moves. Good luck with the real estate investment if it goes through and the brewery and keep us posted!

    1. APPL is a no brainer for the end of 2014 especially with new product lines coming. I will cash out well above $100 I am thinking

  8. Great job on adding more dividend stocks into your portfolio. I like the idea of buying international index fund to the dividend portfolio, I should look into that myself.

    15k in forward looking dividend income is HUGE! I hope to get there one day too.

    1. Ya picked up the dividend fund to round things out more. Cant forget global companies but unfortunately they are hard to attain for some but ETF,s make that much easier!

  9. That was a very interesting update about New Buys , Sells , Brewery and Real Estate Updates