Thursday, October 24, 2013

Learning a lesson on leaving market

I am still, for the most part, sitting on the sidelines when it comes to the U.S. I made out well with my American investments over the past few years but I decided it was time to take most of my profits off the table. I'm still well invested in Canada but I am very light stateside.

Is this wise? So far, no. After the Dow dropped about 600 or 700 points, it started climbing even before the debt ceiling fiasco was settled. It is now up 700 or 800 points. If I'd have held steady, I'd be in the black. At the moment, I am proof that leaving the market, practising market timing, is the wrong approach. (We already knew that, right?)

Still, my REM -- yes, I held onto my much loved REM -- is up and I am still enjoying its 17.93% dividend. You read right: 17.93%. I simply could not part with REM.

And my Canadian investments are plowing ahead. My financials -- Bank of Nova Scotia, Royal Bank, Sun Life Financial -- have all moved smartly up. ZUT has climbed back into the black and XUT, which I was looking at when it was about $18.75, is trading today around $19.25. Cathedral Energy is holding ground and showing promise for more growth. I'm looking for CET to break $6 in the coming months. Crescent Point Energy (CPG) has broken through the $40 barrier and some are calling for a target of $50 for the oil producer.

The percentage growth in value of my portfolio in is into the double digits since the beginning of January. Sure, if I'd have kept my exposure in the States, I could be doing even better. But I'm beating my goals, the cash on the sidelines is giving my portfolio increased stability, and I am prepared for any weakening in either the Canadian or U.S. market.

Ideally, I like to have a little American exposure and a little international but only a little. I need dividend yield and I tend to get higher paying dividends from my Canadian investments. REM is an anomaly.

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