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.
Buys
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
Sells
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?
