Portfolio Update - January 2015

   The first month of 2014 is now behind us.  During the month of January, the price of a barrel of crude oil stayed low and is currently at  $47.85 on the NYMEX.  This drop in price has a big effect on my portfolio due to the weight on the energy sector in my portfolio.

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Shares added due to drip

4 shares of ERF @ $10.44 for a total of $41.76
1 share of KMP @ $10.57 for a total of $10.57

Please note, that BNS recently paid a dividend in the last few days. I own this stock directly with the transfer agent and the position is set up as a full drip. Therefore, when the price is determined of the dividend reinvestment, I will gain some partial shares of BNS. 
     
        My cash position in low at the moment.  During the month I made a couple of trades and plus had an option assignment. My recent put option in Royal Bank, which you can read about here, was assignment as the price was below my strike price at expiration. My plan, initially, if this put option was assigned was to sell covered calls on this position.  With selling, or writing, a covered call I will be paid the premium up front for the obligation to sell my 100 shares at the strike price before or at expiration. When an covered call is exercised,  The premium paid is added to the proceeds of sale, which means a greater capital gain or smaller capital loss. Due to the price of the stock fallen to $71.74, I have abandoned the covered call strategy and will look to average down.  Royal Bank is a solid company and has a history of raising dividends and has paid dividends consistently for a long time.
       On January 13, I purchased  600 shares at $2.40 a share for a total of $1446.00 including commissions of Sherritt International in my margin account. You can read about this recent trade here. I have traded this stock in the past and was profitable on both trades.
        On January 16, I purchased 500 shares of Bombardier Inc. Class B shares inside my TFSA at $2.75 per share. The total cost of this transaction is $1380.00 including commissions, which you can read about here.  For disclosure, I also own 1000 shares of Bombardier Inc. Class B shares in my margin account for investment purposes. 

      As of Jan 31, 2015, the value of my portfolio stands at $75607.84. This is an increase of 1.017% over last month. I have experienced drawdown on my TD and RY positions. I believe these are solid companies to have in my portfolio going forward and will look to average down on these positions in due course. I also contributed some cash to my portfolio.

I will update my investing account tab above.

Disclosure: Long KMP, ERF, BNS, RY, TD

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be NOT taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Environment

     Who do you associate with? Are your parents upbeat people? Do you parents support and encourage you to pursue your dreams? Do your friends push you to be more successful and pursue your dreams?

"You are the average of the five people you spend the most time with" - Jim Rohn

If the five people you spend the most time with are broke, then you will be the sixth.  If the 5 people you spend the most time with are wealthy, then you are more than likely be the sixth.  Try to hang out with people who are more successful than you and will lift you up.  We have know of someone who wanted to start  a business, but as soon as they tell someone, all the individuals hears is something negative. The negatives include such things as "you can't do that !",  "it will never work",  "if it was that easy, everyone else would be doing it.",  or  "you're crazy!!"
       As an investor in dividend paying stocks, people tell me all the time that the stock market is for gamblers. They fail to realize that when an investor buys shares, they become a partial owner in that company.  The ownership means they are help producing products or services, along with helping to create jobs.   If you tell a non-investor that you invest in the stock market, you will likely hear something negative from them over them be supportive and willing to learn from you by asking questions.
        Robert Herjavec, a judge on Shark Tank, and a successful entrepreneur , had a life changing attitude due to a situation with his father.  When Robert came home from school one day, he was complaining as he had a bad day, to which is father replied, " Never complain! Be thankful for what you have and the opportunities that you have".
          So why do I have a blog and follow blogs about personal finance?  I want to be around people who are uplifting and learn from them.  Some people  who are quite upbeat are Jason of Dividend Mantra and Liquid Independence of Freedom Thirty Five Blog.  Jason had recently left his full time job at a car dealership to try make a living from writing. The only thing that seems to upset him is when someone has something negative to say about his diet.  All posts on Dividend Mantra are positive as Jason likes to try to inspire people through his words and to show people the nuts and bolts on how to reach financial independence without a huge salary.  Liquid Independence takes a different approach to investing by using farmland and the markets. Liquid Independence is showing the accumulation of wealth through a different medium than most financial bloggers.
    The financial blogosphere is quite upbeat with people pursuing their goal of acquiring income producing assets to help them become financial independent.

"If you want to change your financial situation, you sometimes have to change your friends." - Darren Weeks.  I heard this quote, the very first time from Darren Weeks and not sure of the actual author.

  Conclusion:

     Adults tend to do what their friends do such as going to events. We all know people who do things with their friends even though they are not in a a good financial situation. So by reading blogs and having a blog about personal finance, its helps me learn about investing in the markets and to discover other investor's thoughts and approaches. The moral of the story is to choose your environment carefully as it can make a big difference in your life.

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Recent Trade

Continuing with the theme of my most recent post, I also made a trade in my margin account.  On January 13, 2015, I purchased  600 shares of Sherritt International at $2.40 per share for a total cost of $1446.00 including commissions.

I have traded this stock twice in the past and was profitable on both trades. Although past performance does not guarantee future success, I have an exit strategy for this stock.  With the United States president talking recently in his State of the Union speech about having better relations with Cuba, this would be a positive for Sherritt International as they operate a mine in Cuba.  I wrote about a past position in Sherritt International which you can read about here.

Below is the "daily chart" of Sherritt International on Google Finance. This chart shows the stock price of Sherritt International from May 23, 2014 to Jan 23, 2015.

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Below is the 30 minute chart, courtesy of Google Finance.

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From viewing the 30 minute chart, we can see the stock is down 17.31% over the last 12 days. 

Disclosure:  This will not be a long term position

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Recent Trade

     With the current environment of low oil prices, I am paying more attention to where I put my money for long term investments. I am looking at different companies in many different sectors. Currently, my portfolio is mostly in energy and financials.
    While I am reviewing my portfolio, I decided to make a few trades. In the post, I will discuss one of the trades.  On January 16, my limit order as filled to purchase 500 shares of Bombardier Class B shares at $2.75 per share.  This trade is inside my TFSA.

I also own this stock in my margin account also. Bombardier has made some announcements in the past week or so that has caused its stock to fall. On January 15, the company announced it has suspended the LearJet 85 because of weak demand and liquidity concerns.

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     After hearing this negative news from the company, and saw the big drop as shown above, I decided to put in a limit order for $2.75 per shares for 500 shares.
    Bombardier is a company in the transportation sector. Bombardier is the world's only manufacturer of both planes and trains. The company is headquartered in Montreal, which is located in the Canadian province of Quebec. The latest annual report to be filed was for 2013. For 2013, the annual revenues for Bombardier was $18.2 Billion US. The financials for the last 3 months and year ending Dec 31, 2014 will be published on Feb 12, 2015.

Disclosure:  I own 1000 shares of BBD.B in my margin account with a purchase price of $3.60 per share.

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Option Assignment

On January 2, 2015 I sold a put option in Royal Bank with an $80.00 strike price. The expiration date was Jan 17, 2015 and the option was assigned as the price fell below the strike price.  I previously written a post on this option selling, which you can read about here.  As I mention in the link in the last sentence I will sell cover calls.  The cover calls will be at an $80.00 strike price unless the stock falls due to the price of oil more and I will change my strategy.

Details:

Number of contracts: 1
Strike Price: $80.00
Premium received : $95.00 -$10.95 = $84.05

Adjusted cost base  = $80*100-84.05+24.95
                                 =$7940.90

Royal Bank of Canada, on the Toronto Stock Exchange, currently pays an annual dividend of $3.00 a share.  This represents a yield on cost of 3.778%.  Although the dividend wasn't increased for 15 quarters around 2009 due to the financial crisis, the company has a great record of dividend growth.  In 2004, the dividend rate was $1.01 and has grown to $2.84, that represents a compound annual growth rate of 12.17% over the last 10 years.

So, if the stock falls I will change my intention on this purchase and average down.  I believe in this company  as the Canadian Banks are known as one of the best banks in the world. 

I will update my investment account spreadsheet in early February.

Disclosure: Continue to hold RY and sell cover calls

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

We All Have Heard People Talk Like This

Why has the price of oil has fallen? This is how you can tell when someone has no clue on how the markets work.

This is a recent conversation  with someone at work.

Me: Boss is worried about the price of oil and that it will cause layoffs.

Other person: I do not know why people are panicking for the price will go back up.

Me: If the price stays down low like this then there will be massive layoffs in the oil and gas industry. Schlumberger, one of the world's major oilfield services companies has announced they are laying off 9000.

Me: Saudis are able to withstand the lower price of oil for a while as it is cheap for them to get it out of the ground. The US and Canada are not members of OPEC. The price of oil helps determine the strength to the Alberta Economy as it costs a lost to get oil out of ground in Western Canada.

Other Person: OPEC doesn't control the price of oil. Countries determine the price of oil not OPEC. They want to start a war over oil.

Me: Oil works on supply and demand and what one is willing to pay for it. If OPEC increases production the price of oil will decrease there is less supply. If they cut production the price will increase as their is less supply to meet demand. There are other factors that determine the price of oil as well. OPEC is not one country but a group of exporting countries.

So this fellow employee does not invest in the markets obviously. Conversations like this are best just to walk away from.

   Here is a some info what helps determine the price of oil.

        But what causes the price of oil to go up and down? Why doesn't the cost of gasoline stay at a constant level? That's because crude oil is a "commodity," a product that is generally the same no matter who or what produces it. Other commodities include corn, coffee beans and raw materials like gold and copper.
       The prices of commodities are always in flux because they depend on worldwide supply and demand. When ethanol fuel started becoming a popular alternative fuel option in vehicles, the price of corn -- from which ethanol can be produced -- spiked. As another example, you may hear on the news about an oil refinery explosion where a supply of crude oil is compromised. This will cause the price of oil to increase.
      There's also the international commodities market, where investors hedge bets on how much they think the price of oil will increase or decrease down the road. Speculating over the price of oil also has a lot to do with how much it costs. (Source:  How Stuff Works website ).

For full disclosure, I do not trade the commodity futures market and definitely am not an expert when it comes to commodities.  I do , however,  invest in companies in the oil industry such as Enerplus and Enbridge. Enerplus used to Royalty Land Trust, that is now operated as a corporation.  Enbridge is involved in the transportation of energy such as through their pipelines, solar energy, wind energy etc.

Photo Credit: www.shutterstock.com

Disclosure:  Long ERF , ENB 

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Recent Trade

     With the recent New Year's holiday on a Thursday, I decided to take the next day off from work. During this day, I decided to take a look at the markets during that day. As I was looking to average down on one of my positions, the stock price didn't come down to where I wanted to make my entry point.
    I, therefore, decided to look elsewhere. I decided to sell a put option. So on January 2, I sold a put option in Royal Bank of Canada at an $80.00 strike price at a premium of $95.00 excluding commissions. As I am the option seller, I collect the premium minus the commissions up front. The expiry date of this option is January 17, 2014.  If this option is assigned, I plan to write cover calls.
     The banking system we have in Canada is very stable, and all 5 major Canadians banks have paid dividends for a very long time.

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Disclosure: I have owned RY in the past as an investment. Long TD, BNS


DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Dividend Update - Dec 2014

 


The month of December 2014 is another month of  dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.

During the month of December the price of crude oil per barrel went lower. As of today, January 3, the price per barrel is $52.81 ( source: www.stockhouse.com). This is a chart of the price of crude oil over the last year. Crude oil seemed to peak around last of June.

Crude oil over the past year

The price of crude oil on October 3 was $89.74.  As seen in the 3 month chart below the price continued its downward trend to where we are at today.

Crude Oil last 3 months

Over the last 6 months oil started out flat and then started dropping the last 3 months. On July 3, the price per barrel was $104.06.  The price per barrel dropped almost 50% over the last 6 months.

Crude Oil over last 6 months

Non-registered Account

• Bombardier  (BBD.B) - $25.40
• Enerplus (ERF)  -$ 45.81
• Enbridge (ENB) = $2.44 
• Just Energy (JE) - $88.38  
• Killam Properties (KMP)  - $5.75
• Shaw Communications (SJR.B)    - $18.33

TFSA

• Boston Pizza  Royalties Fund (BPF.UN)   - $23.87  
• Cominar REIT (C.UN) - $10.78 
• Dream Office REIT   (D.UN)  - $ 16.61
• Enbridge (ENB) = $11.55
• Killam Properties (KMP) - $  14.35 

Total = $263.27

This total represents a 0.152% increase from 3 months ago and 42.15% increase  year over year.  The Cominar REIT distribution is paid out twice during December. The two payments are in the middle of the month and on the last day of the month. Therefore, there will be no payment in mid-January for this REIT.  The Claymore 1 - 5 year Laddered Corporate Bond ETF, CBO, did not pay a distribution in December. CBO will pay of January 6, 2015 for unit holders on record of Dec 31. The distribution payment should be higher due to capital gains paid out by the ETF.

I also received another distribution payment of $56.00 for my swing trade in Dream Office REIT in my non-registered account. This is not listed above since it is a trade, so I keep the money in the account and do not pay myself first with this payment. I have received $987.47 in distributions so far on this trade.

During the month of December, I also made a trade in BPF.UN in my margin account. I also qualified for the distribution payment, which was $20.40 for 200 units. As this was a trade it is not included in my monthly total.

I will update my dividend income tab with the new amount. It is great to see money from passive income sources deposited into my brokerage account every single month.

I will update my dividend income tab above with this total.

NOTE:  Dundee REIT changed its name to Dream Office REIT during 2014, but kept the same ticker symbol.  In this post I finally changed it to its new name.

NOTE: This post was written on January 3, but published on January 4.

Disclosure : Long all securities above.

Photo Credit: www.mipaq,co.za

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

2014!!!

     The year 2014 is now behind us.  I made an incredible increase in my net worth. I ended 2013 with a net worth of $70418.13 and ended 2014 with a net worth of $94327.62.  That is an increase of 33.95%.

      During 2014, I decided to stick to paying myself 35% from job income, dividend income, and interest income. The option premiums I received and the capital gains were 100%  kept  in my accounts except in one case, which I wrote about here.  The markets have been doing good up until recently. At the end of every month, I also put the money that is left over into my investing accounts.

     During 2014, two restaurants chains headquartered in Canada and the United States were involved in the biggest leveraged buyout in history. The United States company, Burger King, purchased Tim Horton's. I read that 3G Capital , the major investor in Burger King, started the ball rolling on this acquisition talking to Warren Buffett. The deal was approved and now the new formed company operates their separate brands, but are owned by the same company.  I owned 100 shares at Tim Horton's, which you can read about here. The announcement of Burger King wanting to buy Tim Horton's sent the share price skyrocketing.  My purchase price was $59.70 and I sold for $89.25, which you can read about here.

When the year ended, these are some of the highlights:

•  $2657.85 in dividend income as reported in my dividend income updates.
• $672.00 received in distributions from my trade in Dundee REIT, that I mention in my dividend income updates. Dundee REIT has changed its name to  Dream Office REIT during the last year.
• $12.63 in dividends per month on average due to shares accumulated due to DRIP.
• Approximately $3900 in capital gains, due mostly to sale of my shares of Tim Horton's and two trades of Sherritt International. My first trade of Sherritt International was approximately $88.10 in gains and the second one, was $400.10 in capital gains.

    In 2015, I will pay attention to low oil prices and read more of what effects this will have on the economy.  If oil prices remain this low for the foreseeable future, there will likely be massive layoffs in the western Canadian provinces.  When oil is this low, the company's in the energy sector will not drill as it is not advantageous for them to do so. The oil in North America, especially in western Canada, takes a lot of more effort and time to get oil out of the ground.

Disclosure: I currently continuing to hold D.UN in both margin and TFSA accounts.

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be NOT taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Portfolio Update - Dec 2014

The month of Dec 2014 is now behind us.  During the month of December, the price of a barrel of crude oil stayed low. In fact, it went lower and is currently $53.71 as of December 31.  This drop in price has a big effect on my portfolio due to the weight on the energy sector in my portfolio.
   
Shares added due to drip

14 shares of JE @ $6.00 for a total of $84.00
4 shares of ERF @ $10.79 for a total of $43.16
1 share of KMP @ $10.10 for a total of $10.10
 0.047 shares of ENB @ 51.91 for a total of $2.44

         My cash position is large right now, and I am actively looking to employ some of that cash in investments in December. During the month, I completed a trade of shares in  Sherritt International. The capital gain from this investment was removed from the account to make an extra windfall payment on credit line. I also completed a trade in Boston Pizza Royalties Income Fund in my margin account, which you can read about here and then here.

       On December 31, my buy order for shares in Bank of Nova Scotia was filled. This position is directly through the transfer agent. This is the old way of buying stocks where you initially get the actual stock certificate when you start a position. There is pros and cons to investing this way. 

      As of January 1, 2015, the value of my portfolio stands at $74846.95. This is an decrease of 1.453% over last month. Although my energy stocks dropped, the other stocks I currently own have increase in value.  I also contributed some cash to my portfolio.

I have updated my investment account tab above. Please note that my DRIP information about ENB might be incorrect. I cannot get into my account, as of this time of writing this post, and have to wait for the next business day to contact the transfer agent to change my password. 

Disclosure: Long KMP, ERF, JE, ENB, BPF.UN (inside TFSA)

EDIT : I put the wrong name of position.  "I also completed a trade in Boston Pizza International in my margin account". This should of read Boston Pizza Royalties Income Fund. I fixed the error above.

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be NOT taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk