Monday, October 24, 2016

Long on D.UN

I took a long position when it comes to Dream Office REIT. That means I own the units. Yes, units. Not shares. Dream Office is a trust and not a corporation. And to be totally accurate, D.UN pays monthly distributions and not dividends. All that said, I often say I own shares in D.UN and enjoy its generous dividend.

But whether I say units or shares, or enjoy the monthly distributions or dividends in my retirement, I am living on the income and I am living well.

Have I lost money on D.UN? Yes. It has been a nasty ride and yet it has been a comfortable ride and I am staying on board. The bumpy ride only delivers a truly damaging jolt when jumping ship and selling the stock, I mean units.

D.UN is selling today for $17.02 and delivering $1.50 a year in distributions. That's a yield of 8.8%. That's good. But my average cost in my TFSA portfolio is $20.52. My yield calculated on my original investment is 7.3%. Not as good as before, but still quite a good yield. (I only need 4% to live, at the very most, that means 3.3% of the income is cycled back into my portfolio to be reinvested.)

So, despite losing a four digit sum, I am O.K. I'm not exactly happy but I am O.K. I'm retired. I need income to live. D.UN is providing that income and the business looks solid today after taking the huge hit to its value some months ago.

I am long and I am staying long. I am not selling my Dream Office REIT investments anytime in the near future. I'm in for the long haul.

I originally became interested in D.UN when it was selling for about $29. I bought a few shares and I have purchased more as the price declined. The yield today is about 5.2% calculated on the oh-so-high value of those original units. I bought D.UN for the income and I need something in excess of 4%. Even my original units still pay their way and earn their position in my portfolio.