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Wednesday, March 29, 2017

Hi Ho Silver, Trading Away

Posted by Tim Stobbs on April 18, 2013

The TSX drops off a cliff in the last few days and how do I react?  I’m happy.  No, I didn’t hit my head recently, but thanks for being concerned about my mental health.

So why am I happy?  Well we had been sitting on a bit of cash to start building up my wife and my TFSA accounts, so now we have started some trades and everything went on sale.  So I went to our taxable accounts and pull any extra cash from those and moved it over with some regular savings to the TFSA to start some trading.

Before I get into details I should likely do a quick review on our plan for our TFSA accounts.  The long term ideal from these accounts is to have ~$6000/year in dividends and/or interest.  To ensure we are diversified we should aim for no more than $500/year from any one company.  The target companies are based on my monthly bills since by their business model mean long term customers with repeat business such as telecommunications (internet, cable, etc), power and water utilities, banks (mortgages), and real estate investment trusts or REIT (rentals).  I think you get the idea.

My wife was up first and pick up some shares of D.UN which is a commercial REIT. I haven’t made up my mind on what I’m buying yet.  I’m still tossing between Northland Power (NPI) or Algonquin Power & Utilities (AQN).  I already own some AQN, but I could add to it, but Northland looks interesting, but I’m a bit concerned about their expansion plans and their cash flow.

The other idea I have running around my head yesterday was should we just sell off all our taxable accounts and move all the money into our TFSAs (I’m aware this will trigger some tax issues, but we both have some previous losses that can off set the gains).  The only reason this looks useful is the taxable accounts are at Royal Bank and getting too many fees and we don’t have any plans to add anything to them in the next few years.  Our focus be using up our TFSA contribution room first, then RRSP and then finally taxable accounts.

In some ways, paying off the mortgage was so much easier.  You had a lot less decisions to make every few months, so I’m following the market closer than I have for years.  Oh well, hi ho silver, trading away.  Anyone else buying out there?

Comments

8 Responses to “Hi Ho Silver, Trading Away”
  1. Mike @ UB says:

    I’m a Boglehead. Vanguard.

  2. I have about $40K in cash set aside as reserve for an EF, but I won’t be using it unless I get a contract, then it gets released for index funds, etc.

    My current dividend income is $6572.28 a year but as things are a bit rocky, it may have dropped slightly (I agree with not putting all your eggs in one basket).

    I set it on a DRIP and I watch it once a day or so.

    I also take dividends from my own company, so I have to be careful not to reach a tax bracket that is more than what I want to spend ($30K).

    All in all, it’s a good time to buy if you’ve been watching the stocks for a while. If I had known this would have happened I would have waited, but… then I would have lost out on the dividends too.

    *shrug*

    Long-term, not short.

  3. Elizabeth says:

    Just got my return of value (instead of a pension) from the military. Talk about timing, lets do some investing!

  4. Jacq says:

    Setting alerts is a good way to avoid the noise but still stay in touch.
    I picked up a few thou the last couple of days, trying to stick more to bigger cap, really secure payout ratio stocks. Was looking at Dundee too, until this commodities drop made me defer that plan.

  5. jon_snow says:

    Over at the Canadian Money Forum, I have been lamenting my cash hoarding ways for several months. With this recent pullback I have bought some Suncor… but I still have 330k cash ready to go. A ridiculous amount, really… it would be really nice if this correction had some more legs to it.

  6. I just bought Bank of Nova Scotia the week before the price dropped.

    My TD Canada Trust is down too.

    I am moving towards ETFs but I am very hesitant about REITS because I remember a time they couldn’t give commercial space away. I would consider a REIT that is concentrated in nursing homes. We will always need nursing homes.

  7. You sure nailed it that paying off a mortgage is easier than investing. It’s so controlled and there are no complex decisions once the strategic direction is set.

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