Tuesday 26 August 2014

I just bought $152,669 in REITs on margin.

So I have been kicking the idea around for a little bit and today I made the move to sneak in on ex-dividend dates on all these holdings since these Canadian Real Estate Investment Trusts (REITS) all share the same monthly payout schedule.

What are REITs or Real Estate Investment Trusts?
They are basically stocks that invest into real estate directly. They hold many different types of real estate like apartment buildings, shopping malls, office towers. Reits are highly liquidable and offer high yields but are prone to rising interest rates and real estate markets as well as occupancy problems. A good high quality Reit often will have long term leases with business such as banks or large chains like Walmart that provide very steady income.

First off this is a risky move and not recommended to any sane investor. Yes I am still crazy. Even worse I bought these all on Margin at 3% interest.

After much reading and analyzing certain REIT stocks I decided to jump in. REIT levels are still off their 2013 high and the trend is showing a good upswing. Interest rates are destined to be low for the next couple years as well. I plan on holding this for at least a year and see how it goes but hey you never know. Hopefully I will get some capital appreciation as well as some sky high yield with this play.

BTB-UN.TO BTB REIT UNITS 4.90 6.90 8.52% - .42
HR-UN.TO H&R Real Estate Investment Trust 23.23 19.69 5.79% 1.14 1.35
REI-UN.TO Riocan Real Estate Investment Trust 27.14 11.65 5.18% 2.31 1.41
AX-UN.TO Artis Real Estate Investment Trust 16.02 19.30 6.75% 1.02 1.08
CUF-UN.TO Cominar Real Estate Investment Trust 19.58 9.89 7.50% 1.94 1.47
DRG-UN.TO DREAM GLOBAL REIT 9.53 - 8.39% - .80
RMM-UN.TO Retrocom Real Estate Investment Trust 4.48 - 10.02% 0.37 .45
D-UN.TO Dundee Real Estate Investment Trust 29.06 - 7.70% 3.24 2.24

Average Yield                                          7.57%
Forward Yearly Dividends                 $11,562
Monthly Dividends                                  $963
Monthly Dividends after margin cost    $588

As you can see yield is quite high. Some are higher risk than others with some smaller Reits like RMM.UN $336.4 Million market cap ranging up to the largest in Canada with REI.UN with 8.3 Billion market cap. All these companies have a good history of payout as many have over 20 years in consistent monthly payouts.

So crunching some numbers these buys of $152,669 of Reits will bring in a 7.57% yield at $11,562 in forward dividends or $963.50 paid monthly but since margin interest is at 3% that I borrowed at I have $149,894 debt which will cost me $4496 a year or $374 a month. This should hypothetically leave me $7065 a year or $588.75 a month after margin interest costs.

I will continue to pay down my $152,669 at 3% margin rate account with the payout proceeds every month to increase the difference I take home.

I will update my holdings but I will keep this batch of Reit stocks away from my regular account as so it can be monitored separate.

So come join me and watch me lose all my money with these methods or watch me grind forward to a billion!

Disclaimer: Do not trade like me and lose all your money and cry to me after. I am no professional, I am just a regular guy that can hardly spell . Do your own research and dont follow anybody blindly on the internet because it a dangerous place and you might get hurt. Plus I dont take well to cry babies. Take your losses on the chin and man up and dont blame your own mistakes on others.

Thursday 21 August 2014

New Buy Qualcomm and Sells Chevron : August 2014

So after talking to my accountant to become a little more tax efficient I decided to make a few trades. Also my online broker was still offering me free trades as part of a promotion and there were only a few days left on it. I also took the opportunity to move all my Reits into taxable accounts and balance my American - Canadian stock ratio.

New Positions
HSE- Husky Energy
TRP- TransCanada Corp
QCOM - Qualcomm

Added Positions
RY - Royal Bank
CPG - Crescent Point energy
IDV - Ishares international Select Dividend ETF

CVX- Chevron
REI.UN Rio Can (Reduced position)

Opened a new position in Qualcomm. I like how they are valued right now and their long term prospects. They have a 2.19% yield , 35% payout ratio and dividend growth of 11 years.

Bought two small opening positions of HSE and TRP. Both Canadian energy stocks. Also added to my position of Royal Bank , Crescent Point Energy and a international dividend etf.

Sold off very small piece of Rio Can so whole trade would fit in my registered accounts. Unfortunately sold Chevron but my Canada energy plays kinda offset it since its in the same sector.

These moves put me up to $15,591 a year in forward dividends at an average of $1299 a month

QCOM QUALCOMM Incorporated 76.77 17.46 2.10 3.98 1.68
TRP TransCanada Corporation Common 51.63 23.09 3.80 2.17 1.77
HSE.TO Husky Energy Inc 33.06 16.53 3.63 1.97 1.20

Other Stock News

Looks like my big Apple bet is going to pay off (Info Link). I expect for my 1000 share position to get called at $99 on August 29th. If all goes according to plan I will walk away with a bit over $5,000. This still leave me with a 600 share apple holding in my registered account which I am letting it ride out a bit. Needless to say its been having some great gains.

I have also bounced around an idea in my head. Buying high yield REITs on margin. Basically I would grab a few high yield Canadian REITs 6%+ and buy them on my margin account at 3% interest. Thus pocketing the difference of 3%+. There is quite a bit of risk involved as REITs could tank or margin interest rates rise affecting the Reits yield. Or the Reits can continue their rebound from 2013 levels and rise further. I have lots of margin room and not worried about markets tanking and getting hit with a margin call. Its a good short term outlook but I cant say its a good long term strategy which I am researching the pros and cons.

In theory I could buy 150k of Reits on margin with a projected yield of 6.5% and after paying 3% margin rate I would be left with 3.5% which is $5250 a year or $437 a month. It is a move I am seriously considering but I am still tentative on it. I will make the desicion in the next couple weeks and watch the REIT market closely.

Let me know what you guys think of my buys or my crazy new strategy idea? If you hate it let me know and why!

Saturday 16 August 2014

$2,126,094 Net Worth Update August 2014

My Net Worth Update August 2014

     August 15 / 2014  : Updated every mid month


Home 2014 assessed value                                  total                 $1,190,000

-Equity Investments
Tax free saving account TFSA -                 $33,948
Retirement saving plan RSP -                  $104,203
Canadian margin account -                      $149,753
US margin account ( Ex Rate 1.091)-      $272,023
margin available $194,087
                                             Total equity    $457,998
                                                                               total:                 $559,927

-Rental Property
Warehouse Income Property 2014 assessed value
                                                                               total:                 $384,000
-Start Up Company
Brewery start up share value
                                                                               total:                   $85,000

Checking account                                      $2,609
Business account                                       $6,487
                                                                               total:                    $9,096

                                                                        Assets total :          $2,228,023

US margin account $101,929
(margin rate 3.75%)
                                                                           Liabilities total :        $101,929
                 August 2014 Grand Total Net Worth:      $2,126,094     

                                     Gain/loss from last month + $14,613

July 2014 :  $2,111,481 Details link + $5,584
June 2014 : $2,105,897 Details link + $3,165
May 2014 : $2,102,732 Details link

  Investment Yields
- Start Up Brewery : No expected return for a year

-Warehouse commercial property Income 
 $1,912 a month minus $678 expenses ( maintenance,tax) =  Per month: $1,234                                                      Yield on assessed value:  3.85%                Total year profits :$14,808

                                                              Forward Monthly dividends Avg:  $1,264
                                                              Total Forwards dividends yearly $15,169

    Grand Total Passive Forward Yearly Income :    $29,977

                  Per month average total     :          $2,498

 In Summary-
Not too shabby I must say. with a $14,613 gain over last month. Portfolio was hit hard at end of July like everyone else but finally bouncing back now in last week. For the first time since I started this blog 3 months ago I have something on my liability side. Margin debt in my US account to cover my big 100k Apple trade bet LINK. I may very well start using more of my margin in the future. My margin account charges borrowing rates of 3% for Canadian equities and 3.75% for US so I think I may chase some yield soon to make it worthwhile for me. There is some other factors contributing to my net worth increase as well listed below.

I love making this post every month as its very informative for myself to sit down and analyze my moves and results. I would of like to make more posts last couple months but I have been quite busy. I am working on estate planning for my parents so lots of back and forth with my parents and lawyers. Also have been looking into various real estate deals that have come up and doing my due diligence to see if they are feasible. I am also looking to borrowing against my house for these deals to happen so there has been a few trips to various mortgage brokers. I may also sell my potential deals to other investors and receive consulting fees for putting it all together. We will see how things pan out but I am really grinding it to makes things happen. Nobody is gonna hand me a stack of cash so I gotta go out and and turn over multiple stones and go get it.

Several factors have contributed to my July net worth.

- Market was up and down but Apple has been my star of the month. It made 2% gains on my old 600 shares holding and almost 3% in my new 1000 share holding. Stocks with big gains in my portfolio have been China Mobile and Kinder Morgan both surging over 15%. Also sold my stake in Bell Aliant as they were bought out by big brother Bell and I cashed out a quick 20% gain made in a couple months. Hopefully this upward stock trend continues.

-Dividend were quite healthy with over $1,200 last month and this month will be close to repeating that amount.

-US dollar strengthen against the Canadian dollar thus increasing my portfolio value in Canadian dollars. Last month exchange rate was 1.072 and now its 1.0894. So an over 1% gain on my US equities from the currency pop.

- New tenants have moved into my rental property and all is well. I received early contract termination fees from my last tenant as well as missed payment. Hopefully this new tenant works out as I have them on a 3 year lease.

-Expenses. Again my expenses were extremely minimal and no purchases of note were made.


-Some of my stocks have not rebounded from the late July crash.

-Transactions costs. I did some reshuffling of my portfolio to become more tax efficient and thus I had to incur some Transactions costs. However I should be reimbursed for these fees in the foloowing months as my bank was holding a free trade promotion which ends in August.

Thursday 7 August 2014

Leibster Award

So couple guys and a gal nominated my blog for the Liebster award. Thanks guys quite grateful. Those guys are
RoadMap 2 Retire
Dividend Diplomats
Debt Debs

They are two guys and a gal whose blogs I frequent regularly and I suggest you give them a look if you haven't already.

First what is a liebster award? Heres the rules
Its Basically an award given by fellow up and coming bloggers that comes with questions and then passing along the award for the process to be repeated. Something like that I think lol.

First off I will answer Dividend Diplomats questions to me.

1. What is the best piece of financial advice you have received?

Buy what you can afford only and take your losses like a man. I have never been in long term debt my whole life. I have always thrived to have money in the bank for a rainy day even when I was a kid because when it rains it pours.

2. What is your favorite financial and non-financial book? (Sorry for the two part question).

Favorite financial book is Random Walk Down Wall Street. Filled with so much knowledge I find myself listening to the audio book often in the car over and over again.
Favorite non fiction? Catcher in the Rye! "All morons hate it when you call them a moron."
- J.D. Salinger, The Catcher in the Rye, Ch. 6

3. Do you still own the first stock you purchased?

No it went bankrupt. NORTEL !!!!!!!!!! When i first began investing in 1998 I found a hot shot stockbroker and I gave him 100k. He then heavily invested into Nortel and lost it all. Lol lesson learned there.

4. If you could visit any country in the world, which country would you visit?

Hmm tough call. I have traveled many places around the world Australia, Most of Europe, Japan, Thailand , Mexico, Caribbean . There is still a few places I would like to visit. New Zealand for sightseeing, South Africa for a safari, Cuba before Communism falls, Russia in the summer lol and Hawaii and Miami if the United States will ever let me back in.

5. What is your favorite “boring” stock?

Tough one. I would say Apple if its still considered boring. I have jumped in and out of it at least 10 times with a profit every time. There is something on how they do business that clicks with me. There message is so simple and it just works. Love their high quality products in the day and age of quickly obsolete low quality crap. 5 year old Apple products blow away all competitors when it comes to reliability and useability of similar products. 

Bonus Question: Which Diplomat is your favorite and why? Just kidding about this question.

I like you guys equally the same but I would have to say Lanny sounds better looking and Bert sounds 1% smarter out of the two. LOL JK !!!

And now for Road Map 2 Retires questions!

1. Who has been your biggest inspiration (investing or otherwise)?
Hmm tough call. Cant really say anyone really but an object instead. Cash cold hard money has inspired me. I wanted cash more than I wanted material possessions. I like counting it, I like smelling it. I like to lay it out in nicely organized piles with all the bills face up the right way with no folds or creases. You can tell a lot of a man on how he stacks his cold hard cash.

2. What is your best advise to other investors (new and/or seasoned)?
Dont be afraid to get your feet wet. Life favors the bold and the ones that put their neck out there.  Hell I probably lost easily over a million in bad investments but there are a few I really stuck my neck out there that paid off much more than I lost. Whats the worst thing thats gonna happen out of a measured investment? You lose your money? Big deal, Get over it and move on to the next thing.

3. Which is your favorite city in the world?
Tough call. Maybe where I live in Victoria BC , I live a block from the beach, No traffic, friendly people, good food , very mild weather for Canada and not as materialistic as the big cities.

4. If someone would take anything away from your blog, what's the one thing you wish they would?
Hey, take a chance in life! Quit talking about it and just do it. Makes things happen on your own and don't say shoulda coulda woulda years later.

5. What kind of music do you listen to?
As a kid I listed to classic rock, and hair bands Led Zepplin, Rush , Motely cru, Def leppard
Then I got into rap as a young angry teenager, NWA , Bay area rap.
Then I got into Indie rock and some house music.
Now I barely listen to music in favor of podcasts. I will still rock some albums every here and there like ArcadeFire and whatever or whatever is on the radio. Like to relax with some 80,s hits in the background too.

My Nominees?

1. http://www.allaboutinterest.com/ - He was one of the few guys that inspired me to start my blog and of course Dividend Mantra. I like his strategy of dividend growth stocks mixed with real estate as I am doing the same thang!

2. http://mydividendpipeline.blogspot.ca/ - Love his aggressive approach at investing at all costs! He sacrifices the nice things now for the even better things down the road. Love is focused get rich approach. He is hungry for millions and is doing everything he can to get there.

3. http://dividendhawk.blogspot.fi/ Dividend growth investor with a European vibe. He has always been supportive of me and the community and deserves praise for it.

4. http://www.passive-income-pursuit.com/ Active blogger, investor, tweeter and all around good guy.

5. http://www.freedomthirtyfiveblog.com/ Good supporter and voice of reason. I appreciate his insights on his trades and posts. Also admire his boldness in the search for yield!

My questions for these 5 guys?
1. Whats your favorite TV show, Movie and why?
2. What sports or physical activity are you guys involved with or what do you guys do for fun?
3. How has your blog helped you and what have you learned from it?
4. Where do u want to be in 5, 10, 20 , 50 years?
5. What your biggest strength and weakness in your quest for financial independance?

Tuesday 5 August 2014

Bought 1000 shares of Apple for $95,000. Yes I am crazy!

So after a few days of mulling a crazy idea I had in my head I pulled the trigger.

I bought 1000 shares of APPLE and even worse I bought it on MARGIN !!!!

Yes I am bananas! The trader in me has been itching. Yes I am my own worst nightmare.

But wait! Dont I already have 600 shares of Apple?? Why yes I do and it is nestled in my retirement account.

SO what am I gonna do with 1000 more shares? Write short term out of the money calls until it hits at a profit. Isnt this quite risky? Yes it is. Stock could tank and I take a beating.

So on a sunny August 5 of 2014 midday I bought up 1000 shares at 94.86 in my taxable account on margin. I then wrote an August 22th strike call at $99 call for .52 cents on all 1000 shares giving me back basically $500. Also purchasing these shares I squeak in and steal this quarters dividend with the ex-dividend date only being 2 days away. Those 47 cent per share dividends will give me another $470 as well.

I am hoping by writing these short term calls that the strike price will eventually hit in 2014 giving me a quick 5% gain and thus closing my position. If shares don't strike I plan on writing more covered calls 5% over my purchase price until they do. I think for sure Apple shares will reach $100 at some point this year easily so that is why I am making this BOLD move.

Apple will be releasing a much anticipated iPhone 6 model equipped with a larger 4.7 inch screen and various other enhancements. It is poised to be the best selling iPhone yet and on top of that their global reach into new markets has continued to expand. Also rumors of an even larger iPhone 5.5 inch have surfaced as well as a new product of an iWatch of some sorts. Overall its an exciting time for Apple and many analysts have Apple rated as a strong buy with a value like 15 p/e ratio right now.

I dont advocate anyone make this type of move. You guys can watch me fail or watch me win on it. Yes its a risky move but I dont mind the risk really.

In fact in 2007 I made a similar type but even more crazy risky move. I bought over 10,000 shares of Nintendo at $33 and held on and watched it go up towards $80 and then me finally selling a year later at around $55. Learned a lot there. Have and exit point and stick by it! Also don't put all your eggs in one basket. So Thats my plan with APPLE and writing options see I tend to the exit plan.

This entirely doesn't fit with the get rich slowly principal of dividend investing. I have decided not to touch my dividend portfolio to do this and I am treating this trade separately than my regular portfolio. I am even treating it separately to my other 600 Shares of Apple in my retirement portfolio In which I have more of a long term outlook for.

I want to be held accountable for my trades and me putting it on here acknowledges it.
So how crazy am I?
Put me on Blast for my actions! I deserve it!

                                             Apple 1984 Superbowl commercial