I did not make any changes in my investment portfolio in April 2017. I was busy in doing some other financial activities.
Overall market is little pricey and trading near all-time high. Thus, there have been very few buying opportunities for small investors like myself.
So, I decided to take a month break from assets accumulations and start to think about other ways to improve my wealth.
I love to buy lots of assets when prices are low as I did in early 2016, and when the prices are high I stay silent, collect dividends and watch my investments grow.
Usually, I don’t check my portfolio often. I was quiet confidence with my investments assets, so I checked once a week or two. But for some reasons, I started to check portfolios’ performance very often. Sometimes I check few times a day.
I couldn’t understand. it is because of the fear or I am getting addiction. For me, both are good for my wealth building. Having fear is good thing for investors when everyone else is in greedy mode (Mr. Buffett quotes).
There are so many reasons to fear. Over-heated housing market, high debts level (bad debts), high market valuations, you can count on.
So I decided to make some financial moves to prepare for any sort of unexpected events, even take advantage if any opportunities become available. Please understand I am not timing the market, it is just preparation or you could call it ‘strategy review’. Timing the market is impossible.
Portfolio check up – My top 10 dividend growth holdings
First, I reviewed my top 10 dividend stocks holdings. My top 10 largest holdings represent 49.38% of my investments assets (as of May 06). I feel it is too much concentrated in just 10 holdings.
My top 10 dividend growth holdings as of May 05, 2017
- BIP.UN – 7.02%
- ENB – 6.92%
- CNR – 6.23%
- CU- 4.81%
- TD – 4.7%
- FTS – 4.27%
- BCE – 4.1%
- TRP – 3.91%
- RY – 3.67%
- BNS – 3.75%
Total – 49.38%
My largest holding is BrookeFields Infrastructure L.P (TSE: BIP.UN), which represents around 7% of my entire portfolio. Second largest holding is Enbridge Inc (TSE: ENB). Both are interest rate sensitive stocks. Enbridge (TSE: ENB) was my largest holding for last couple of years. BIP.UN overtook the position last week.
Also, I have three Canadian bank stocks in my top 10 holdings. Banks stocks usually perform well in rising interest rate environment, but they may experience a down turn pressure if something happen in over -heated Canadian housing market.
Rest of them are two utilities, one pipeline and a communication stocks. I consider all of them are high quality dividend growers. But, I am not comfortable having any single stock represents more than 5% of my entire portfolio.
At the same time, I don’t want to sell these stocks to re-balance my portfolio because it is really hard to find similar stocks in Canadian market because I may not able to purchase them back at the price again.
So, I decided to keep them, but not adding any more until the numbers become reasonable. I continue collect growing cash-flow from these high quality stocks and deploy elsewhere to purchase additional assets. So, over the long term, portfolio get re-balanced itself.
The opinions and the strategies of the author are not intended to ever be a recommendation to buy or sell any securities or investments. The strategy the author uses has work for him, but it may not be suitable for your financial situations.
Please remember to do your own research and know your risk tolerance. As usually, we would strongly recommend you to discuss with a qualified financial professional before even considering using the information obtained from this website.
Also, I was busy in refinancing my credit card debts. If you notice in my latest net-worth update report, there are few low interest rate loans were about to expire in the coming weeks. If I don’t refinance them, then I have to pay more than 20% interest charge for the rest of the balance.
As usually, I received new low rate offers from couple of my credit card companies (from 0% to 1.99% for 12 months offers). So, I just simply transferred money from one to another.
There were a 1% balance transfer fee for most of the credit cards (not for line-of credits), which cost me around $480 to refinance. But, I think it is worth move for the fee. Now, I don’t need to worry about debts for another one year.
Opened an Interactive Broker account
I opened an IB account for two reasons. First reason is for diversification and the second reason is to take advantage of low margin interest rate.
In Canada, most of the online brokerages are regulated and insured for one million dollar per account, in-case something happened to the firms; however, I like to keep around $100K to $150K in an account. Recently, my portfolio crossed the $200K milestone.
Second reason is to reduce my debts charge. I have been paying around 4.25% margin interest rate for last couple of year. IB charge only 2% (as of writing). I could save couple of hundred dollars.
Thus, I opened new account, and made a position transfer request to move some assets from my other online brokers to IB. It is just a partial move.
Exploring options to buy vacation rental properties
I don’t think I can buy and maintain rental properties by myself. I would rather purchase REITs and collect monthly payments; however, my best friends brought this idea to form a partnership buy a vacation rental properties. So, we use it for our own purpose and rent them out for rest of the period.
We used to rent cottages during the peak summers, but I never had a plan to own it. It is just in discussion state. We will see.
I may join with them to purchase one if and only if it makes sense in my financial view.
The coming months and years will be very interesting. I really started to experience the compounding effect in a positive way after my assets value reach to decent amount. Now I could feel the sense of rich. I am slowly but steadily accumulating income generating assets, aka dividend growth stocks.
In couple of years, my dividends will cover all my expenses so I could free-up my time from my day job and start to think something big and enjoyable. Actually, I already start to visualize my version in 2024.
Thank you for reading & happy investing!