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.
Stock markets stay almost flat without finding any direction to move.
Investors are waiting for the U.S president election results to make decision about their next investment moves. We may expect big market swings in the coming days – before and after the presidential election.
As a long term dividend investor, market swing is not a big deal for me, in fact, I may take this as opportunities to buy high quality stocks at bargain prices.
In October 2016, I just reinvested dividends collected in my Canadian investments accounts and added some shares that I already have (nothing new 🙂 ), and sold one stock with profit due to its very low yield – less than 1% yield
And, I started to buy a U.S Health care ETF (XLV) using the dividends I received in my U.S dollar registered account.
Please note the information posted on this website is the opinion of my own and should not be considered as professional financial advice. I am not a financial professional, and I can buy, sell, or hold any investment at anytime.
Any transactions I publish are not recommendations to buy or sell any securities or investments.
Please consult with your financial professional before even considering using the information obtained from this website.
Here is the changes I made in my dividend portfolios in October 2016:
The changes made in my Canadian portfolio in October 2016.
- added 15 shares of FTS at $41.06
- added 25 shares of ALA at $33.16
- added 10 units of XRE at average price of $15.78
- SOLD 50 shares of MTY at $48.50
The changes made in my U.S dividend portfolio in October 2016.
- initiated 1 unit of XLV at $71.83
With all the changes, my estimated yearly passive income has increased to $7430.
MTY performed really well over the last couple of months. I bought 50 shares of MTY at $28.99 in February 2016 and sold them all at $48.50 on October 31, 2016, with a decent gain of 67.29% in just 9 months.
I like MTY and its business model. Due to the recent rally, its dividend yield went down to below 1%. So, I decided to take some profits off the table and used the money to pay-down some margin loans (interest rate of 4.25%).
I may consider buy back MTY if price go below $40.
So far, I didn’t have any health care stocks in my portfolio, so I decided to buy health care ETF (XLV) using dividends in my U.S accounts. Hopefully, I could buy at least one unit per month using dividend income.
I have updated the portfolio pages with these changes.
Now, let’s look my portfolio diversification.
Portfolio diversification
Portfolio Geographical Diversification
There are no big changes in my diversification strategies from the last updates.| Country | Target asset allocation | Current asset allocation |
| Fixed income (bonds and pension) | 20% | 4.65% |
| Canadian stocks | 40% | 80.83% |
| U.S stocks | 35% | 13.13% |
| International stocks | 5% | 1.38% |
My Canadian portion of my investments have increased a bit from my last update due to recent rally in my Canadian holdings.
My fixed income portions have been keep improving for last 15 months because of my pension plan contributions.
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.
You should consider create your own diversification strategy (if you don’t have one) to minimize investment related risks in your portfolios.
| Sector | Target asset allocation | Current asset allocation |
| Fixed income (bonds & Employer Pension) | 20% | 4.65% |
| Finance | 10% | 19.70% |
| Industrials & Infrastructure | 5% | 8.79% |
| Consumer Staples | 10% | 7.33% |
| Energy & Materials | 5% | 3.86% |
| Utilities | 5% | 14.57% |
| Pipelines | 5% | 12.58% |
| Consumer Discretionary | 5% | 2.23% |
| Health care | 5% | 0.04% |
| Information technology | 5% | 0.16% |
| Telecommunications | 5% | 6.20% |
| Real-estate | 5% | 7.77% |
| Miscellaneous & Preferred shares | 5% | 4.51% |
| Transportations | 5% | 6.23% |
| International & Diversified ETFs | 5% | 1.38% |
Please share your thoughts about my holdings and recent purchases. Also, do you have any portfolio diversification strategy? And how often do you balance your portfolio?
Hi fantastic blog! I have dabbled in cheap penny stocks, mostly venture stuff with low success, just to see what it is about. A few weeks ago I listened to a radio program where a guy did what you are doing now. Like you I work and pay a mortgage and I don’t want to go heavy into debt for stocks. I would prefer to spend $600 a month or so to build up inventory of shares. Out side of paying commissions, is there a down side to this strategy in your opinion?
Hello Mark,
Thank you for stopping by,
Actually it is a good strategy, make sure find a brokerage with low commission so you will have more money to build your wealth. Also, invest in high quality blue chip stocks, it will do well for longer period of time. Please discuss with a qualified financial advisor before make any investment decision.
Best Regards,
Where can i find information with regards to Fixed Income bond rates?
Hello Dave,
Actually, I don’t directly invest in bonds, so I am not sure where to find the information. I am sorry. I use Google and Yahoo finance sites and TD direct investing screener to find investment information.
Cheers,
Nice work on MTY. I hadn’t seen that ticker before. The low dividend is a good reason to sell after it has run up. I’m curious about your choice to buy more Altagas (ALA) because it has a high forward P/E, the dividend payout ratio is also super high and they have negative cash flow ( http://financials.morningstar.com/ratios/r.html?t=ALA®ion=can&culture=en-US).
I’ve noticed that Bird Construction, BDT (small cap, good value, high yield) is at a good buying point. And it could be a better play. What do you think?
Thanks!
Hello EJ,
Thank you for stopping by and sharing your opinion.
In ALA, I look at its Normalized funds from operations (NFFO) instead of its earnings. NNFO is way to look these type of companies dividend safety. According to ALA third quarter results its NFFO is $0.84 and paid dividend $0.52. So the company payout ratio is 61.90% (as of Nov 2016).
I will have look at BDT. It seems interesting as government is planning to spend billions of dollars in infrastructure.
Best Regards,
I haven’t used Normalized funds from operations in my analysis — so thanks for educating me on this. A 61.9% payout is a safe percentage: good for ALA. How do you find out the NFFO ?
As for BDT they’ve recently come into headwinds with missed Q3 earnings. The price has dropped considerably ( – 17% ). They cut dividend from 7.2% to 4.3% so it’s now looking pretty shaky. Fortunately did not purchase any stock.
Side note: CDN telecoms are seeing downtrends. BCE (which you own) and RCI.B will probably bounce back up. However — Shaw Communications (SJR.B) seems like a bit of a sleeper on the telecom front. What do you think?
EJ.
Hello EJ,
I found ALA’s FFO details in the company Q3 report. Actually, Fund from Operation (FFO)/free cash-flow (FCF) is the good way to check a company dividend safety.
Glad that you didn’t invest your money in BDT before dropped its price 🙂 . I may not invest in BDT as I could find better opportunity elsewhere.
I accumulated few shares of BCE after it dropped its price due to the news about rising bond yields. Few other interest rate sensitive stocks also dropped sharply in the last few days. I like BCE & Telus than other two telecoms (it doesn’t mean they are not great).
Thank you for sharing your ideas with us…
Best Regards,
Hello, MTY foods is a growth stocks, I think you sold it way early. FTS and ALA are good picks. thanks for sharing.
Hello Peter,
Thank you for stopping by and sharing your opinion. MTY is a good stocks, but it had a great run in the last few months, so I decided to take profits off the table and pay-down some debts.
Cheers,
Hi FJ,
I just found your site and I am enjoying it.
I’m the same as you. I think diversification is extremely important. I have two sets of diversification. One is a global set (cash, fixed, Canadian and global) and a second set for all my individual stocks. For individual stocks (Foreign and Canadian) I use the following classifications and ranges:
Consumer 10% (minimum) to 25% (maximum)
Financial 15% to30%
Industrial and Manufacturing 3% to 15%
Real Estate 10% to 25%
Resources 3% to 10%
Science and Technology 3% to 15%
Utilities, Telecom and Cable 15% to 30%
The percentages are based only on the amount invested in individual stocks. I do not include cash, fixed income, mutual funds or ETF’s in the calculation. I like the ranges so I don’t have to rebalance as often and I can emphasize areas I think have more opportunity. Currently I rebalance every quarter.
Good luck investing.
Regards
Just
Hello Just Look,
Thank you for stopping by and sharing your ideas,
You have great diversification strategies too, but I won’t go for more than 20% in one sector (especially financial sector). And, some financial advisors consider real-estate (REITs) as financial sector, but I keep it as separate sector.
Best Regards,