Thursday, August 26, 2010

Thoughts on CPD and DRW

These posts are for entertainment purposes only. No part of these posts should be construed to constitute investment advice. The author is not an investment professional and assumes no responsibility for any investment activities you undertake. Prior to undertaking any financial decisions, you should contact an investment professional.

This info was added Dec. 28, 2011. As of today it appears that Wisdom Tree International Real Estate Sector Fund (DRW) will miss paying its fourth quarter dividend. Ouch! The overall dividend yield for the year was more than 10 percent but still I was expecting about $400 come the end of December.

What happened? I found this explanation on the Net:

"DRW holds PFICs (Passive Foreign Investment Companies) in its portfolio. PFICs must mark to market each year (in Q4) and realize a gain or loss in those PFIC shares. PFIC loses are offset against PFIC gains, and then against portfolio income. The PFIC losses for DRW this year wiped out the gains and Q4 dividend income, therefore, no dividend distribution . . . "

These missed dividend payment add a whole new wrinkle to owning DRW. (In the end, I dumped almost all my DRW. I have a hundred units as of today (mid-September, 2015.)

Now that I've got the above out of the way, let's talk about the Claymore S&P TSX Cdn. Preferred Share ETF (CPD). I did not put a lot of my portfolio into CPD. I bought just enough to learn first-hand how CPD performs. I now know I should never have bought preferred shares for a tax-sheltered portfolio. To read more on this please click on the link and read the post: Preferred shares for portfolio income and stability: Oh?

I admit I am only a successful investor because the markets are generally good places to park your money. My success is as much luck as skill. I don't want to lead anyone astray.

Today, mid-September, 2015, my portfolio is up about 45 percent since retiring around January 9, 2009. And this is after removing tens of thousands of dollars to help finance my  retirement. Before my heart began acting up, my wife and I spent almost six weeks on the road traveling about North America in my vintage automobile, a '60s Morgan Plus 4. Retirement has been good and my investments have helped to make it so.

I've made mistakes but even the mistakes have often resulted in money to spend in retirement.