Friday, November 7, 2014

Too Early to Call but a Cushion is Forming

At the very end of last month I created an imaginary portfolio using software found on my WebBroker account site. Being imaginary, I followed my heart and gut instincts honed over the past few years of investing in retirement. So far today my imaginary portfolio is up $3249.

What goes up can also come down. And I have no illusions about this sad fact. Still, being up $3249 means now I have to fall by that amount before I drop into the red. I see this $3249 as a small, but nice, cushion to ease the pain of any coming correction. Unfortunately, such a small amount won't be much of comfort in a true bear market -- one losing 20 percent or more in value.

The big gainers so far today have been:
  • Glentel Inc (GLN) - up $1430
  • Ag Growth International Inc (AFN) - up $1367
  • Whitecap Resources Inc (WCP) - up $1120 [I actually own this stock.]
  • Rogers Sugar Inc (RSI) - up $1112 
  • Teck Resources Ltd (TCK.B)- up $750
  • Even Norbord Inc (NBD) is up $324 [I actually own this stock.]

The biggest losers so far today are:
  • CIBC Monthly Income (CIB512) - down $1190
  • iShares International Select Dividend ETF (IDV) - down $822
At first I was surprised that it was the CIBC fund leading the retreat. This was bought for stability, to minimize volatility. And then I realized that I have a lot more invested in CIB512 than in any one of the other investments. A small change causes a much larger gain or loss because of the size of the CIB512 holding. By the end of the day both monthly income funds were in the black.

Norbord continued to climb. I sold. I locked in the profits and put the money in Dream Office REIT. I believe at today's stock prices, D.UN has more potential. If I'm right, there will be time in the coming year to get back into Norbord. I'm guessing it will cut the dividend and this will cause a temporary drop in the stock price.

I find it interesting that I continue to hold my Norbord in my real account. Why? That is a good question. There is a dividend coming in December and I believe it will pay me a very handsome dividend. I also think there might be more upward potential in the stock. I'd like to have the dividend in my pocket before selling on a bump.

I seem to be more optimistic with my real money and more conservative with my imaginary money. I may learn something about myself and about investing from my imaginary portfolio.

And how did I end the day. My imaginary portfolio was up $4953.

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