It is hard to believe we are in May now. Time is flying in lightning speed. Life is so busy with day job and family.
I can’t wait to achieve my financial freedom so I can set my own schedule rather than set by boss and spend a quality time with my families and friends.
Hey, I am moving toward to achieve the dream life with freedom from day job.
In April 2015, I made few purchases in both U.S and Canadian portfolio.
The Changes I made in Canadian dividend portfolio
- purchased 50 shares of MFC at $21.43
- purchased 30 shares of PWF at $36.95
- purchased 50 shares of CNR in two different time with average purchased price of $80.30
CNR dipped further after I purchased. I may consider adding more this high quality transportation stock if the price drop further.
Also, reinvested some distribution in my TFSA and purchased 4 XTR ETFs at $12.05
The Changes I made in U.S dividend portfolio
Reinvested some distribution in my RRSP and purchased 2 IDV ETFs.
Portfolio diversification
I’ll be the first to admit that a significant portion of my portfolio is built with Canadian dividend paying companies – most of the companies and their services I use or experience in my daily life.
But, when it comes to diversification I’ll be the also the first to admit that my portfolio is very poorly diversified – geographic wise and sectors wise.
So, I have created a diversification strategic for my portfolios to minimize the investment risks.
Portfolio Geographical Diversification
| Country | Target assert allocation | Current assert allocation |
| Canadian stocks | 40% | 82.35% |
| U.S stocks | 50% | 16.14% |
| International stocks | 10% | 1.51% |
I will explore the international market using ETFs and U.K based companies. Also, most of the U.S based companies have well exposure into international market.
Portfolio diversification – sectors & fixed income
Actually, I guess there are only 10 sectors, but I have divided my dream portfolio by 15 sectors including fixed income/bonds.
Please note this is not the way professional fund managers or experts diversify their funds. This is my own diversification strategy.
| Sector | Target assert allocation | Current assert allocation |
| Bonds | 15% | 0.81% |
| Finance | 10% | 21.99% |
| Industrials & Infrastructure | 5% | 4.30% |
| Consumer Staples | 10% | 8.30% |
| Energy & Materials | 5% | 6.34% |
| Utilities | 5% | 15.59% |
| Pipelines | 5% | 17.49% |
| Consumer Discretionary | 5% | 2.72% |
| Health care | 5% | 0.0% |
| Information technology | 5% | 0.0% |
| Telecommunications | 5% | 4.89% |
| Real-estate | 5% | 2.91% |
| Miscellaneous & Preferred shares | 5% | 6.41% |
| Transportations | 5% | 6.44% |
| International & Diversified ETFs | 10% | 1.51% |
From the above table, you could easily see my poor portfolio diversification. Finance, pipelines and utilities are almost 55% of my total value. Risky! Very risk approach!
It is a big mistake I made in the past.
I was focusing to acquire more units and collecting dividends, but forgot to diversify my portfolio.
However, I won’t sell holdings from over weighted sector and buy in under weighted sectors. But, I will try to balance my holdings by adding new stocks/bonds in the under weighted sectors.
So, in the coming weeks, months and years my stocks purchases will be focusing on to meet the targeted assert allocations.
This is the first strategy I developed for my portfolio diversification. It will evolve over time with the world economic conditions and my risk tolerance.
I will update my progress every month under the portfolio updates category.
Do you have any diversification strategy? And how often you balance your portfolio?
Well done FI, I am impressed with your diversification in term of companies and sectors, regions.
I am really scared to do because of taxes and FX, so keeping it within the SMI.
Cheers,
RA50
Hi RA50,
Thank you for your feedback!
Taxes are big stop breaker for investors..
Best Regards,
Looks like we have similar diversification targets but our current allocation is not close to the goal either. Definitely something to work on. 🙂
Hey Tawcan,
Thank you for stopping by!
I was surprised when I see my portfolio diversification in numbers. At least I figured it out soon than later 😀
Cheers,
There are lack of diversification in Canadian market. As a dividend investor, hard to avoid banks and energy stocks.
You should look into your south border.
Best of luck
Hi Chris,
Thank you for stopping by!
I total agree with you. Canadian market is just concentrated with finance and energy, and those stocks are in every Canadian dividend investors portfolio.
Cheers,