For those of you just joining us, this is my portfolio that is leveraged with money borrowed from my home equity line of credit (HELOC). As the money borrowed is used to invest, the interest charged is tax deductible. For more details, check out the modified smith manoeuvre strategy.
It’s been a couple months since I’ve done an update and unfortunately, it has been an ugly couple months. As I mentioned in my last net worth update, I made some purchases that I shouldn’t have which has negatively impacted my portfolios.
In particular, since the last SM update, I purchased more Teck Cominco when it seemed like it couldn’t go any lower, but a couple weeks later, they declared that they would be cutting their dividend. This resulted in my $12 share price dropping to $4. As my emotions got the better of me, I sold half my position immediately on the dividend cut news. As luck may have it, the sell off had already accounted for the dividend cut news and it has since recovered a bit… after I sold some. :)
In more purchase news, I bought Toronto Dominion Bank (TD) as it remains one of the stronger retail banks in Canada with minimal sub prime exposure relative to the other banks. I also purchased more Manulife Financial (MFC) as they seem like the classical strong company that is irrationally oversold.
Here is my SM portfolio as of December 2008:
|Stock||Symbol||Shares||Avg Buy Price||Total||Div/Share||Yield|
|FTSE RAFI US 1500 Small-Mid ETF||PRFZ.US||20||$51.50||$1,029.99||$0.42||0.82%|
|AGF Management Limited||AGF.B.T||50||$22.71||$1,135.49||$1.00||4.40%|
|Bank of Montreal||BMO.T||25||$44.17||$1,104.24||$2.80||6.34%|
Total Portfolio Cost Base (including commissions): $33,920.32
Portfolio Holdings Value (excluding cash) on Dec 29, 2008 : $23,026.70
Total Dividends / Year: $1,366.50
Portfolio Dividend Yield: 4.03%
The shining star during this dark period is that interest rates are very low (3.50%) and possibly going lower. So low in fact that my dividend yield alone is enough to cover the interest charges. Add the tax deduction in the mix and there’s a decent spread between prime and dividends earned.