Thursday, October 2, 2014

Update on Investment Goals at September 30, 2014 (Q314)

My investment portfolio had another solid quarter, even with the North American markets declining in September. Many of my goals for 2014 have already been accomplished, and I expect a relatively quiet last three months of 2014.


Increase my portfolio value by 17% :
My portfolio increased in value by over 27% at Q314 compared to its value at the start of 2013.  I made my regular contribution to my non-registered portfolio, and then made my Q4 contribution ahead of schedule in order to buy shares of Bank of Nova Scotia before the ex-dividend date. The depreciation of the CAD relative to the USD has also helped my portfolio grow. 

With this goal accomplished, I'm not re-adjusting it, or increasing it for YE14. With the current market downturn, I'm focusing on buying stock in quality companies at a cheaper prices in order to increase my dividend income.

Total Dividends Received Up 25% (Revised from 18% at June 30th):
With my forward dividends up 26.5% since the start of the year, I've crushed my initial goal, and am even ahead of my revised goal.  Instead of focusing on increasing forward dividends even higher, I'm considering a transaction that would potentially decrease my dividend income, but save me on taxes over the long-term. I'll discuss it at a later date, but I might sell an investment trust I own in a non-registered account and possibly re-purchase it in my RRSP or TFSA. 

Maintain US Holdings at About 30%:
My US holdings accounted for about 28% of my portfolio at Q314.  As the CAD continues to depreciate against the US dollar, and with plans to continue to shift my RRSP holdings to US and international stocks, this number should drift up over time.  That said, I must admit that with the CAD at a year-low against the USD (about 89.5 cents today), I'm finding it harder to force myself to buy US stocks and pay the 15% premium my brokerage thinks is fair. My rising stream of USD dividends helps to remind me to follow through with my plan. 

Doubling Down on Comfortable Holdings:
I continue to make good progress against this goal. My plan for Q4 involves looking at buying opportunities to finish positions in Coke and Realty Income Corp inside my RRSP. 

Get rid of all companies who haven’t raised their dividend in the past 18 months:
My two exemptions to this criteria remain Riocan REIT and H&R REIT. Riocan would be a mega-tax headache to sell, but I have thought about selling H&R if they haven't raised their dividend by year end. I continue to believe in the long-term value of the company, but think they need to start living up to their mission statement of paying out a rising stream of distributions. 

Figure out what to do with cash in excess of $500 (especially in TFSA and RRSP):
Given the current cash-producing nature of my portfolio, I've decided against pursuing this goal. I tend to invest when I have above $1000 in cash in any of my accounts. I figure transaction costs of less then 1% are fair. Plus, I like having some cash in my accounts just in case interesting opportunities arise.

My portfolio continues to perform well-above any expectations I had at the start of the year.  I'm curious how long the current market correction will last, as I'd really like to take advantage of some buying opportunities. Plus, with my mortgage likely being paid off in November, I'll have more to invest in a stagnant, or hopefully falling market.

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