Friday, March 26, 2010

dividend income rises to a record

We've likely all suffered dividend cuts in our portfolio and and some companies that have been consistent dividend raisers over the years have frozen dividend payments since early 2008. Recently our dividend income has finally gone back into record territory. The funny thing is that the record just eclipsed the amount of dividend income we were receiving way back in December of 2008. At that time when the market was plunging our portfolio was yielding a whopping 6.2%. I guess it was primed for a drop in income just like a high yielding stock.

Fast forward to today where our portfolio is yielding 4.1% and has grown considerably from 2008. We've endured dividend cuts from Manulife Financial (MFC), General Electric (GE), Yellow Pages Income Fund (YLO.UN), Husky Energy (HSE), and Bank of America (BAC) all of which I still hold and expect great things from in the future. Aside from income trust conversions from Yellow Pages and Canadian Oil Sands I don't expect any more negative dividend action over the next year or two so I look forward to really starting to grow our dividend income through purchases and dividend hikes.

doubled Canadian Oil Sands position

Yesterday I doubled my position in Canadian Oil Sands Trust (COS.UN).

To reiterate my reasons for purchase:
  • looking to increase exposure to resources in this portfolio
  • good way to get paid on the fate of oil with large potential capital appreciation in the future
  • distributions (interest income) will become dividends next year and they have large tax pools to offset some tax
  • well positioned company in a politically sound country
  • I believe oil prices will be strong for the next 20 years, China will be a good customer
  • Potential buyers should crop up over the years
  • Will add to position from time to time when it looks attractive for the long term

Saturday, March 20, 2010

bullish dividends

"If 'buy & hold' is dead, then I am the embalming fluid"

So is buy & hold still dead? Lil' Wayne and I never thought so.

The S&P 500 is up 53% over the past year...

Dividends are being raised all over the place by firms like Coke (KO), Wal-Mart (WMT), Pepsico (PEP), Rogers (RCI.B), Abbott (ABT), and the most bullish of all..........HOME DEPOT (HD).

Why GE's Dividend Increase Matters (please note GE had not raised it's dividend yet)

The patience that all of us long term investors have exhibited over the past 2 years is really starting to pay off. Buying during the depths of the financial crisis is looking more and more like a wise decision.

Tuesday, March 16, 2010

simplest ways to ensure financial difficulty your entire life

Classic moneygardener; Revisiting an old post from September 12, 2007.....

List compiled with inspiration from young, (age 25 - 35), friends and relatives (ie they helped me compile this list without realizing they did so)

1. Buy a vehicle without looking at total cost of ownership (financing, gas, insurance,maintenance)

2. Buy a home for your maximum lender pre-approval amount.

3. Do not start an RRSP because you have debts to pay off.

4. Do not make proper (higher interest to lower interest) debt repayment a priority.

5. Maintain a short-term view of your finances.

6. Fail to coherently plan finances around life events.

7. Fail to work as a team with your partner when it comes to your household finances.

8. Fail to realize that how you spend and manage money matters more than how much money you make.

Monday, March 15, 2010

net worth update March '10

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

Net worth results for the 2 Months Ended March 15, 2010:

  • Debt/Asset ratio dropped to 0.44 from 0.46 (record low)
  • Net Worth gained 6.7% (record high)
  • Total Assets rose 3.2% (record high)
  • Total Liabilities dropped by 0.9%
  • House Value/Total Assets fell to 60.6% (record low)
  • Non-Registered Portfolio grew 5.7% (record high)

Another strong gain in net worth and we are looking good in all categories. Records were set across the board with the exception of our liabilities where we still above early 2009 levels. We're curbing expenses lately as we deal with less employment income. We are also hoping to continue to save money this year and we're determined to find ways to get it done as we reduce fixed costs and consider more frugal options.