Monday, November 16, 2015

Did I catch a falling knife?

The green line represents the wild ride my TFSA has taken me on this year.

My investments have take quite the battering lately. Today my investment in Dream Office REIT took a dramatic tumble falling more than a dollar at one point. I could not believe the retreat the stock price was making. It was quite the surprise. D.UN is more than just office space in Calgary and Toronto but you'd never know it from the market reaction today.

D.UN is a big, core holding in my TFSA. Its fall has a huge negative effect on my entire tax free portfolio.Yet, I am doing better than a simple index investment in the TSX and so not all is dire. With luck, I may even hit my goal of a seven percent gain.

I had to ask myself if I was wrong to have faith that the market was undervaluing this REIT. My answer was yes; the units are undervalued. (But then what do I know. These units just keeping tanking.) I took action and bought another 100 shares and this time I got them for just pennies above $18.

Thanks to the tax free nature of this portfolio, the withdrawals that I must make beginning next year will pay for the better part of my wife and my shortfall in income for two months of 2016. I understand the double digit dividend is safe until at least 2017. I'm going to spend my income, keep my fingers crossed and hope that falling knife doesn't get those exposed, optimistic fingers.

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