Friday, November 2, 2018

Portfolio Update: October 2018

The month of October 2018 is now behind us.  What a month it has been!

The price of oil dropped a lot over the last month.  It now trades around $63.00 US per barrel for West Texas Intermediate.  Up here in Canada, the US is the only buyer of our oil so the price the US pays for our oil is at a big discount to the WTI price.  One of the reasons is that some of the oil from Canada is from the oilsands, which costs more to refine than sweet light crude oil.  Canada needs to expand the pipeline to the west coast that will make it possible to ship oil to other foreign markets.  Honestly, I can not see the government getting the approval to expand the pipeline from the National Energy Board.

In August, Canada became the owner of the current Kinder Morgan Pipeline in Western Canada.  Canada purchased the Canadian assets of Kinder Morgan after approval from the Kinder Morgan shareholders.

Now on to the roller coaster month in the stock market.  We have seen huge drops in the markets during some days in the month of October.  This is Mr. Market giving you opportunities with fallen prices, but you as an investor must first do your due diligence. The Bank of Canada followed the recent Fed announcement with increase the interest rate.  The purpose of increasing the interest rate is to slow economy.


Portfolio Activity

On October 1, I purchased 100 shares of Telus Corporation (T.TO) at $47.38 for a total cost of $4743.30  including commissions.  This purchase was in my margin account.   Telus Corporation provides communications services in TV, phone and internet.  Currently Telus Corporation pays a dividend of $2.10 per share per year.  This purchase adds $210.00 to my annual dividend income.  The yield on cost of this purchase is 4.43%.

On October 4, I purchased 24 shares of Telus Corporation (T.TO) at $45.80 for a total cost of $1104.15 per share per year. This transaction was inside my TFSA.  The purchase adds $50.40 to my annual dividend income.  The yield on cost of this purchase is 4.56%.

You can read about the Telus purchases here.

On Oct 9, I purchased 2 units of iShares 1-5 Yr Laddered Corporation Bond Index ETF (CBO.TO) inside my TFSA. The total cost including commissions and fees was $36.33.  My brokerage currently provides commission free ETFs on the buy side of the transaction.  All though the commission is free there was $0.01 fee for ECN fee. The amount of ECN fees increases as the amount of units increases.

Currently CBO.TO pays a distribution of 0.492 per unit per year.  The distribution is paid monthly. This purchase adds $0.98 to my annual dividend/distribution income.

On October 25, I purchased 3 shares of Royal Bank of Canada (RY.TO) at $94.57 for a total cost of $288.67 including commissions.  Royal Bank of Canada is one of Canada's big 5 banks.  Royal Bank of Canada has can have earnings of 3 billion dollars over a single quarter.  Currently, RY.TO pays a dividend of $3.92 per share per year.  This purchase adds $11.76 to my annual dividend income.  The yield on cost of this purchase is  4.07%.

There was no option trades initiated during the month.  I am currently looking to sell calls on WestJet Airlines and Telus Corporation in my margin account.  I was selling out of the money put options previously in WestJet, to possible average down my position of WestJet Airlines. With the interest rate in Canada at this time, I do not want to use margin due as the interest rate would be over 7% with my brokerage.


Shares Purchased Via DRIP

1 unit of CUF.UN.TO @ $11.21  for a total cost of $11.21  (TFSA)

0.495787 shares of BNS.TO @ $70.252 for a total cost of $34.83 (transfer agent)

Cominar REIT (CUF.UN.TO) currently pays an annual dividend of $0.72 per unit.  This DRIP purchase adds $0.72 to my annual dividend income.

Bank of Nova Scotia (BNS.TO) currently pays an annual dividend of $3.40 per share.  This DRIP purchase adds $1.69 to my annual dividend income.

Dividend Increases

TFI International (TFII.TO)  raised their dividend from $0.84 per share to $0.96.  This $0.12 increase is an increase of 14.29%.  I currently own 50 shares, so this increases my annual dividend income $6.00.

Summary:

As of November 2 , the value of the portfolio is $110560.52. This is a 3.81% decrease over last month's total. With the huge stock market drops in the past couple of weeks, this decrease was expected. The spreadsheet investment tab above has been updated.

Disclosure: Long all mentioned stocks

Please Note: All stocks are from the Toronto Stock Exchange except TTR which trades on the        Venture Exchange.

Please Note:  Positions in Restaurant Brands International (QSR.TO) and Brookfield Renewables Partners (BEP.UN) pay dividends and distributions in US dollars, respectively.  My investment tab spreadsheet displays the Canadian dollar equivalent within 15 to 20 minutes of real time.


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.

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