When stocks fall in value without some major news about the underlying company, this means opportunity knocking at your door. For days like the last few days in the capital markets, an investor should have some "dry powder" available to take advantage of the opportunity.
Investors want their money to work hard for them. The lower the stock price, the harder your money will work for you. This is because the price of the stock and the yield has an inverse correlation. An investor must first search for any news about the stock that might of cause some investors to sell.
Purchase
On October 25, I placed a limit order to purchase 3 shares of Royal Bank of Canada ( RY.TO) at $94.57 for a total cost of $288.67. This position was made inside my TFSA. For full disclosure, I went long RY.TO in my trading account on the very same day as well.
RY.TO has traded between $93.13 and $108.52 over the last 52 weeks. The stock has fallen by about $10 over the last month.
Royal Bank pays a dividend of $3.92 per share per year, or $0.98 per share quarterly. This purchase adds $11.76 to my annual dividend income. The yield on cost for this purchase is 4.07%. For comparison, the annual interest rate on my high yield savings account is 1.25%.
I would of like to have bought more shares but didn't have the dry powder available.
The stock traded ex-dividend on October 24, therefore I will not receive the quarterly dividend payment in November.
I will update my investing tab spreadsheet in early November with this new position.
Did you advantage of the market pull back during the last week?
Disclosure: Long RY.TO
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.
Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.
nice buy.
ReplyDeleteroyal over 4% definately is tempting.
got to finish / get it big enough to drip my bns position, first though.
keep it up, didn't buy anything last week but bought bns the week earlier.
Passivecanadian,
DeleteThanks for dropping by. I wanted to start a position in Royal again for the long time. I owned it a few years ago. This is going to be a forever stock.
BNS is tempting too. My larger position of BNS drip partial shares. The position is not big enough to drip 1 share yet, but I will gladly take the partial shares each quarter.
IP -
ReplyDeleteNice job swooping up more of the Canadian Bank stock! Loving it.
-Lanny
Lanny,
DeleteI was glad to re-own Royal Bank at this level. Wish I had more money available to acquire a bigger position. It's is a forever stock, so I plan to add to this position over time.