Saturday, September 17, 2011

Not recommending these but I own 'em.

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This info was added Dec. 28, 2011. As of today it appears that 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 . . . "


I'm holding my position. I'm not overexposed and feel little concern. We'll wait to see what the yield is delivered at the end of the first quarter of 2012 and we'll hope the value of this ETF doesn't continue to lose ground. This missed dividend payment does add a whole new wrinkle to owning DRW.
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These are not recommendations but they are investments that I have in my retirement portfolio.

CIB512 (CIBC Monthly Income) yielding 5.6%, Brompton VIP ETF yielding 9.8%, CPG yielding 6.5%, IPL.UN yielding 6%, PWT yielding 6%, XRE yielding 5%, ZUT yielding 5.2%, REM yielding 10.8%, DRW yielding 12.5%, DWX yielding 11%, and AUSE yielding 6.9%.

Although the following are not paying above the magic yield point of 5%, I love owning them anyway. Scotia Bank yielding 4%, Royal Bank yielding 4.7% [If this drops a little lower, I would not hesitate to buy more.] and CPD 4.8% [When interest rates begin to climb, this is worth a look. The yield should climb as the price drops.].

And although it is only yielding 3.2%, this may change after the December dividend, I am still quite enamoured with the TD Monthly Income as a core holding. I have 14.9% of my portfolio in TDB622 and each time my holdings drop below 15% of my portfolio daily value, I buy more.

Cheers!

p.s. If one thinks of a correction as a loss of at least ten percent, based on that number my retirement portfolio has not corrected this year. Much of my portfolio's diminished value is a result of removing funds in order to live.

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