Wednesday, March 30, 2011

Spreading your bets

Let's be honest, if you're in the market you like a little spice in your investment life. If you don't, maybe you should be buying bonds or GICs.

Once we agree that you crave spice, the big question is: "How much?" Do you like your investments mild, medium, extreme or "erupting volcano" hot?

I used to go for mild but was disappointed by the lackluster returns. I have a friend who likes hot and spicy, volcano hot. When he is on a roll, wow! When he isn't, man his returns are downright depressing.

I've learned to mix my investments to get just the right degree of spice. Check out the three investments that I have posted today: Inter Pipeline, Polaris Minerals and Discovery Air.

When the markets were at their lowest, I bought IPL.UN. Solid company, lots of upside, everybody's favorite. The good monthly dividend and the promise that it would continue well into the future was the icing on the cake. I bought some IPL.UN for both my portfolio and for my wife's.

IPL.UN has done well but that is no surprise and so adds no excitement to my investments. A wise investor, at least a sensible and cautious one, might stop with IPL.UN. I like the fun of a financial fling. I noticed that Discovery Air was selling for mere pennies. This is a good airline that flew into some turbulence. I saw quality selling at a low price and bought.

Polaris Minerals, a relatively new company that came into the world with great promise, has tumbled from a value of about ten dollars to a bit more than a buck. The great promise is still there but followed by a big, question mark. I bought some PLS knowing full well that this might be a mistake. Today the promise is sounding more and more hollow. I know folk who owned PLS who have bailed. Maybe I should too. But I can afford to lose a little and rooting for this little underdog adds the little bit of excitement to my portfolio that I seem to need.

Today, I don't own as much IPL.UN as I once did. I took some of my profits. I don't feel comfortable with too much exposure in one company. I also sold enough DA.A to get back my original investment and I've come very close to parting with my remaining shares. Polaris is down and could go lower, and if it doesn't turn around this summer, I'll probably move on. But taken together, these three have made my investment life both exciting and profitable.

Click on image to enlarge. Numbers on right  show gain/loss percentage.

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