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
Sells
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!
AG,
ReplyDeleteYou are a busy man! Congrats on the 15.5k in forward dividends. REITS on margin huh? That could be interesting!
MDP
Yes interesting indeed. Could be a suckers strategy. Time will tell.
Deleteyou already sold the AAPL? I figured you were waiting for the IPhone hype to peak. But, never wrong to take a profit.
ReplyDeleteI am all for using margin or loans to invest, but I insist on a bigger spread for the risk. Wonder if you should be waiting for a large pull back and then buy the REIT. The divi would cover the interest and the real return would come from increasing share price. Good luck
AAPL still not sold yet. 1000 shares and on August 29th looks like they are going to be called away at $99.
DeleteI however have 600 more shares and I am going to sit on.. Good idea for the pull back on REITs before jumping in.
Some great moves. Glad to hear that the AAPL bet is paying off. Also, you timed that perfectly - just before the iPhone 6 launch!
ReplyDeleteSome great new names in your portfolio. I am long QCOM and its one of the stars of the tech industry. I held HSE in the past but the lack of dividend growth made me leave (ended up writing covered call on it which got called). Used to own CPG as well. TRP looks interesting - but for now, I have KMI and IPL.TO for pipelines and I am quite content with that.
Yah kinda of did a lateral move from chevron into these. I didnt want to shift money over with exchange fees and found something similar in Canada.
DeleteI'm a fan of energy and financial and have gone ahead with my own financial additions. This month I bought TD, BNS and RY and the last several months have been adding to my WFC, AFL and CB so clearly I am into the financials and like your addition to RY and new Canadian energy stocks. I do question one move... "to move all my Reits into taxable accounts." What's the logic behind this move? I am looking into REITs myself but know they are more efficient in retirement accounts rather then taxable accounts. Please advise.
ReplyDeleteRoyal bank just annouced 6% dividend increase. Hip hip hooray! As far as Reits often a portion of their dividends are taxed as interest income and capital gains instead of regular dividend classification. Tricky part is each Reit has a different ratio. Better explained by this article here as it mentions one of my holdings http://www.theglobeandmail.com/globe-investor/wrapping-your-head-around-reit-taxation/article5575073/#dashboard/follows/
DeleteGreat buys. Interesting that you sold off Chevron, I like to have energy plays in both US and Canada. I just added Qualcomm as well. They're being very aggressive on the marketing side, trying to win back some market shares from Intel.
ReplyDeleteI would be careful about buying REITs on margin. Knowing that interest rates will go up soon this may impact the REITs. REITs dividends are also taxed at a different rate than the typical eligible dividends.
Yah will prob get back Chevron at some point. It just got left out transferring funds from various accounts.
DeleteYes interest rates will no doubt affect Reits. But Reits are off their highs and are pretty much just getting back to 2007 level so could be some possible value there. Not overly concerned about Reits in taxable account since I have no personal salary income so I am at the lowest tax bracket already so an extra 5-10k in revenue will not put me up.
Lots of moves and I really like the QCOM add. It's one of the few tech companies that I like as a DG investment. I think about your REIT/margin move every now and then or utilities/telecos but it's too risky for me. Essentially it's interest rate arbitrage but given the low rates it's not for me. Not sure what margin rates are like in Canada but here it's tied to the prime rate (Fed funds rate) which has been kept artificially low and most likely will be increasing over the next few years. That could be a double whammy of capital losses and rising interest rates that erode your returns.
ReplyDeleteYes Completely agree with the long term future of interest rates that will be going up. At 3% margin rate it is pretty low. For me to get a home equity line of credit I am looking at a 3.25% rate so pretty damn close. I think interest rates will be pretty low for at least 2 years so the REIT play i figure be a mid term play depending how rates go. I am still looking over data and crunching data. Markets are looking pretty frothy but Reits are not at their highs since 2013 and could easily be a 10-20% upside in next year to two.
DeleteHowever this is how people get in trouble with leverage but I am only talking about leveraging 8% of my overall net worth to possibly making this 150k play. Still risky no doubt.
AG,
ReplyDeleteYour investments are an inspiration to my FI journey. As a beginner it`s hard to stay on a steady path with no one around me achieving the same goals. None of my friends or family invest in anything besides a 401k. AAPL continues to rise even higher which is no shock. I am debating on adding more to AAPL at this point. Good luck!
Thanks for the kind words. Might be best to wait for a slight pullback on apple to buy or dollar cost average it and break your buy into a few parts.
Delete