Yesterday, my French teacher at work asked the members of our class to describe their mental image of retirement. Answers ranged from the funny (bathing daily in a pool of cash) to the traditional (traveling the world while stopping long enough to visit with grown kids) to the brutally honest (worrying what they'll do with their spouse every day). Luckily, before it was my time to answer, my teacher flashed an image of a couple walking along a tropical beach. With the visual clue in mind, I told Pierre that I pictured myself and my wife holding hands while lounging on a beach. It drew 'awwwws' from the female students in my class, but it was simply the only answer I could come up with at the time.
Reality is that I have very little of an idea of what my retirement will be like. There are so many factors that are yet to be determined (when I'll retire, where we'll retire to, how many kids we'll have, advances in technology, etc.) that it's an extremely blurry picture right now. Since I'm 35, retirement seems like a long way off. That said, most of the investment and career decisions I've made center on how they'll impact my retirement. The fact I've chosen to invest in companies that regularly increase their dividends gives me peace of mind knowing that I won't have to rely on a work pension plan or the Canada Pension Plan, both of which could prove unsustainable given current demographic and investment return trends.
There are certain aspects that I can picture as part of my retirement. I love travelling, especially doing house exchanges with other couples, as I feel this gives me a chance to truly experience the culture of another country. Additionally, I find being close to water relaxing, and can picture myself on a lounge chair, reading a good novel. Staying physically active is something I've focused on, and plan to continue in the future, be it through running, swimming, or a yet to be discovered activity. Of course I'll continue investing, as it's something I enjoy, and benefit from in multiple ways. Spending time with my wife and children, is perhaps the activity I look forward to the most of all.
The main thought I associate with retirement is freedom. Imagine waking up in the morning and having the freedom to do whatever it is that you want to do that makes you happy. It's that thought of having the ability to determine the direction of each day that drives me to work hard now and invest successfully.
I'm curious, what does retirement look like for you?
Wednesday, March 19, 2014
Wednesday, March 12, 2014
Back in January, I mentioned that I planned to set aside some money in my TFSA in order to take advantage of market over-reactions. The vast majority of my investment portfolio is invested in companies that regularly grow their dividends/distributions. These are companies I'm comfortable owning for the long-term, that have proven histories of sales/earnings/profit growth to back up their dividend/distribution increases.
When Alaris Royalty Corp (TSX: AD) announced their 2013 results on Monday morning, I couldn't believe the market reaction to the company's fantastic results - the stock fell over 5% on record earnings! Granted, Alaris is currently in the midst of sorting out a non-material (in my estimation) tax issue with the Canada Revenue Agency ("CRA"), but I knew that Mr. Market was over-reacting by beating down the stock.
With the stock down 5%, the dividend yield (which has a history of growing strongly) at around 5%, and with my stash of 'hedge fund' cash in my TFSA ready, I bought 200 shares at the end of the day at $29.50. Then it was just a matter of waiting for investors to come to their senses and realize Alaris's stock had been unfairly beat down due to a minor dispute with CRA.
In less than 48 hours, I decided the stock had bounced back enough, and sold my 200 shares at $30.40. After subtracting the $20 in transaction fees, I netted a $160 profit (2.7% of my investment) in less than two days.
Not all trades with my 'hedge fund' money will be this easy, but I'm extremely happy to get off to a positive start with my side project for 2014.