For those of you new to this website, in this post, I discuss the recent changes I made in my dividend portfolios and also discuss about my portfolio diversification strategies.
Toronto Stock market moved little high in May, so did my Canadian holdings.
I didn’t make any major stock purchases last month because my favorite dividend stocks trading at bit higher than from their recent lows.
As you might have noticed, I only buy high quality blue chip stocks when their prices get depressed because of bad economic news. I just buy high quality asserts at low price when many others get feared and sell at low.
For instance, I made a big move and purchased lot of stocks in January and February 2016 when they were selling at discount price. I think it was a really good move because I made a double digit ‘paper gains’ in almost all the stocks I purchased.
I could record a big profit if I sell them now, but I would like to keep them for long term.
Currently, I have a big Canadian portfolio (worth over $155K). So, I am very much interested in adding U.S or international stocks in my own retirement fund in order to diversify.
But unfavourable currency rate (USD vs CAD) for Canadian makes me hesitate to buy U.S stocks. I will start purchasing U.S dollar when I CAD = 0.8 USD or above. Meantime, I will keep paying down my debts, reinvest dividend in registered accounts and wait for an opportunity.
Now let’s see the recent changes in my dividend portfolios in May 2016.
Please note this is not an investment recommendation website and I am not your financial Advisor. I am just sharing my personal financial journey with this website readers. I strongly recommend you to discuss with a financial professional before make any investment decision.
The changes made in Canadian portfolio in May 2016.
- added 4 units of XRE ETF at $15.78
The changes made in U.S dividend portfolio in May 2016.
- initiated a tiny position in SBUX; purchased 10 shares at $55.12 SBUX price went down little further after I made the purchase, I may add more if price get depressed more.
- added 2 units of IDV at $28.62
I have updated the portfolio pages with these changes.
So many readers asked me which brokerage account I use and how much commission I pay for each trade I make.
Obviously it is very common question because I make very small purchases every month.
Actually I use Questrade for all ETFs and tiny stock purchases.
So, whenever I get some dividend income I don’t let the cash to sit my account. I usually send them immediately to make more money by purchasing ETFs at no commission fee.
Therefore, you could buy any ETF for free of commission at Questrade.
Also, their commission for purchasing common stocks is very low compare to other stock brokerages – which is $4.95 compare to $9.99 in other brokerages.
For new and experience investors, Questrade is one of the best brokerages pick. I could tell this because I am using Questrade for more than 4 years.
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Now, let’s look my portfolio diversification.
Portfolio diversification
Again and again, I will 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.
More than 80% of my investments are in Canadian based companies. I was kept adding more Canadian stocks to take advantage of recent market drops.
I have created a diversification strategic for my portfolios to minimize the investment risks, but I am not following my own strategic as I am still in asset accumulation stage 🙂 .
Recent changes in my diversification strategic
In March 2016, increased my fixed income target asset allocation to 20% and reduced International stocks target asset allocation to 5%.
January 2016 – I have included my employer pension into fixed income category. The contribution I make into ,my employer pension plan is part of my assets, and it will definitely fit into the fixed income category.
Portfolio Geographical Diversification
| Country | Target asset allocation | Current asset allocation |
| Fixed income (bonds and pension) | 20% | 3.11% |
| Canadian stocks | 40% | 81.54% down from last update |
| U.S stocks | 35% | 13.97% up from last update |
| International stocks | 5% | 1.38% |
My Canadian portion of my investments have increased a bit from my last update due to the recent improve in Canadian 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/employer pension.
Please note this is not the way professional fund managers or experts diversify their funds. This is my own diversification strategy.
| Sector | Target asset allocation | Current asset allocation |
| Fixed income (bonds & Employer Pension) | 20% | 3.11% |
| Finance | 10% | 19.52% |
| Industrials & Infrastructure | 5% | 8.52% |
| Consumer Staples | 10% | 7.04% |
| Energy & Materials | 5% | 3.97% |
| Utilities | 5% | 14.13% |
| Pipelines | 5% | 13.39% |
| Consumer Discretionary | 5% | 3.16% |
| Health care | 5% | 0.0% |
| Information technology | 5% | 0.16% |
| Telecommunications | 5% | 6.56% |
| Real-estate | 5% | 8.22% |
| Miscellaneous & Preferred shares | 5% | 4.77% |
| Transportations | 5% | 6.06% |
| International & Diversified ETFs | 5% | 1.38% |
From the above table, you could easily see my poor portfolio diversification. Finance, pipelines and utilities are almost 50% of my total value. It is very risk approach!.
It is a big mistake I make now. But I have no choice as I am unable to move my Canadian dollars into U.S market to diversify due to the currency exchange rate.
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 units in the under weighted sectors.
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.
Many readers asked me which tools I use for all these calculations.
Actually, I use Google Sheet which is available in the Google drive. It is free. All you need is a Google account.
Google Sheet is very similar to MS Excel but you could pull the stock market data from Google Finance to do all the calculations you need.
Please share your thoughts about my holdings and recent purchases. Also, doo you have any diversification strategy? And how often do you balance your portfolio?
What do you think about GS.TO ?
I look for safe high quality dividend paying stocks like you but think the bads news about the dispute with founders is already priced into the stock as it looks to rebound.
Hello Tony,
Thank you for stopping by, GS.TO is not in my watch list. I think I have enough financial stocks in my portfolio (Canadian banks). Please do further research before make any investment decision.
Best Regards,
I was looking for a blog about how to start stock investing Thank you so much for your blogs its very helpful for us newbie here in Canada. You are a great blessing to us for sharing your ideas and knowledge for free. I am addicted to all your blogs reading them all to gain some wonderful information. Keep up.
Hello Mercy,
Thank you for your kind comments,
I am so glad that I am adding value for this blog readers. Best of luck in your investing journey,
Cheers,
Love your blog. I just started my dividend portfolio recently with just a couple ETFs. However, I am interested in how and when to buy a position in a equity. Say you’re eyeing a certain stock when do you decide to buy?
Hello Ken,
Thank you for stopping by,
It is little hard to say when to buy individual stock. I buy when a high quality stock at very low price. Usually, I fix an entry point for stock and buy when the stock trading at the price or lower depend on my cash availability.
Good luck for your investment journey!
Cheers,