Saturday, February 27, 2016

Finding Screeners Using WebBroker

A friend stopped by yesterday and although he too used TD WebBroker he had never used the Screeners function. He was curious as to where this software filter for investments was hiding in the maze of choices and pull-down menus.

Answer: WebBroker -> Research -> Tools -> Screeners

Now, to learn more about using Screeners. I'm near the bottom of the learning curve.

Sunday, February 21, 2016

Experimenting with portfolio management

The month of February three quarters over and it has been a month of surprises. The biggest surprise, for me, is how well my rag-tag portfolio is doing. I truly admire the Couch Potato portfolios and the man behind them. Over long periods of time, the Couch Potato (CP) portfolios have performed very well. These portfolios have earned bragging rights.

Using Portfolio Manager I set up a couple of assertive CP portfolios at the first of the year. I chose the Vanguard ETFs assertive portfolio and the TD e-series funds approach. With no money involved in setting up my dream-team portfolios, it was easy to create CP portfolios with the exact value of my own portfolio at the first of the year.

Today my personal portfolio, one that I have watched fly high and dip low, is riding the crest of success. It is outperforming both the Couch Potato portfolios. It is not surpassing them by much but it is still ahead by a nose. This may surprise you but the recent cut in the D.UN dividend translated in a boost in the share value of Dream Office REIT and that increase in value helped bump me ahead of the CP portfolios.

My worst performing experimental portfolio is one I concocted using the stock screener function. I went for high dividend yield, the highest Columbine Capital Quant Ranking, oodles of analyst interest and coverage, great EPS growth, revenue growth, EBITD margin and return on equity. This portfolio of eleven stocks has been a roller coaster straight from hell. I'm not totally surprised but the extremes reached have been greater than even I imagined.

I never thought I'd be saying this, but the bad stock picks I made in the past have wilted to the point that they have almost no affect on my portfolio. These mistakes posing as companies could go bankrupt and I'd hardly miss them. If they come back, even a little, it will be wonderful but I'm not holding my breath.

Which brings me to why I am checking out alternative investing styles like the Couch Potato: I am getting to the point where I can sell my holdings and not fret over the paper losses. I can then repurpose this money. But if I do this, I want the new portfolio to meet three criteria:

  • continued good dividend yield -- more than four percent
  • not overly volatile -- a high sleep-at-night factor
  • simple to set up
  • simple to manage

I am leaning towards ETFs for supplying the answers to my retirement demands.

I think at the six month mark, I'll drill deeper into my imaginary portfolios and how they are performing.

Friday, February 19, 2016

Dream Office REIT cuts dividend, suspends DRIP

The market seemed to like the dividend cut and cancellation of DRIP.

Dream Office REIT (D.UN) has cut its dividend by a third and suspended its DRIP program. Read the media release:

Effective with the February 2016 distribution, payable on March 15, 2016, we have revised our distribution from $2.24 per unit to $1.50 per unit, on an annualized basis, which will reflect a more conservative payout ratio of approximately 67% of 2016 analyst consensus AFFO. Concurrently, the Trust suspended the DRIP (currently at 38% participation ratio) to eliminate dilution and to preserve value.

All very reasonable and not unexpected. That said I had hoped D.UN would be able to maintain its dividend but I was also banking on the crash in the price of oil to be a short term event. Oil is down and may stay down for longer than anyone expected. Companies like D.UN, with a fair amount of exposure to the western Canada economy, must modify their outlook.

On the bright side, I don't use the DRIP and so its elimination is a plus in my biased opinion. With D.UN unit price as depressed as it has been of late, the dividend yield was well into the double digits. The DRIP was certainly diluting the value of my holdings.

A one third cut in my dividend income from D.UN is not a financial disaster for me. Oh, it will hurt but I will pay my bills in retirement using the remaining dividend income. What I won't be doing is reinvesting the bulk of my D.UN yield. Most of the fat has been cut but not all. Using the soon-to-be new yield and using today's increased unit value in the calculation, D.UN is still yielding more than eight percent.

And I noticed that the TD Action Notes this morning rates D.UN a buy on its Action List. The folk at TD Waterhouse clearly like the REIT's new Strategic Plan. The new price target is $23. If you are like me, you may have paid too much. I hope you bought a little when Dream dipped below $15 recently. It was a chance to recoup some of your losses.

All in all, life is still good. I can still sleep at night.

Friday, February 12, 2016

I could have done worse; I could have given all my money to London Life.

Whenever I begin feeling badly about my investments. Whenever I start berating myself for my lack of experience. I look at my London Life investment statement and my present approach to my retirement investments doesn't seem all that bad. I didn't give London Life all my retirement money. That, in itself, was a brilliant move.

Back in 2000, 16 years ago, I got a call from London Life telling me I should make the money that had collected in my insurance policies work harder. I could invest that money in a London Life RRSP.

I said I'd give them $4196.71 as a test. If they did wonders with that, I'd consider shifting more of my portfolio to London Life. They didn't and I didn't.

In fifteen years they have managed to whittle that original investment down by a full $2474.18. I have lost 59% of my original investment.

If I had put the money in my old standby, The TD Monthly Income fund, I'd have had $13,893.11 by now.

Oh well, when I turn 71 this RRSP must be converted or closed. At that point the 75% guarantee should kick in. I'll only lose 25% of my original investment.

I think this experience has made me wary of believing the promises made by any and all supposed experts in the saving for retirement field. (I wrote about this some years ago. The post was called: Freedom Fund down 71%; Mattress Up 345%.

Thursday, February 11, 2016

Hold on. We are in for a ride.

I've been in and out of the stock market since I was but a boy. That's good. But, I didn't really pay the market and investing the attention both deserve until progressive rounds of layoffs and buyouts hit the company at which I worked.

When a gentleman whom I considered at the very top of his profession was given his walking papers to simply save the company a salary, I knew it was time to prepare to leave. At the time, I wished I could step forward and say that I would take the buyout and my friend and better stay but I didn't have the resources to live in retirement

I went to the library and got some books on investing and others on preparing for retirement. The library was a great resource.

I prepared an investment allocation plan and I began following it. My goal was income and I never took my eyes off that goal. By the time the next round of layoffs and buyouts hit, I was ready. A young man with a stay-at-home wife and mother, the two had two little boys, was given the pink slip.

I was able to step forward and lay my head down on the chopping block. I took the buyout package and suffered about a 25 percent cut in my retirement income from my pension and CPP. I felt confident that my work had prepared me to suffer such a cut and still keep my financial head above water.

All that was some seven years ago. During the early part of that time period I did incredibly well. I earned better than ten percent per year on my investments. I earned so much that I couldn't spend all the money. I bought more stock.

Then, about three years ago, may be a little less, all began to unravel. The value of my portfolio dropped and it took a jagged up and down path to where I find myself today. I have lost an amount well into the six figures.

If I was writing this for the paper, I'd have a great story with lots of pathos. But I'm not and the story has not turned too ugly as of yet. Sure I've lost a lot but I have way more than when I retired - way more! And that is after I taken out a six figure amount in order to live. Remember: my pension plus my CPP, OAS and my wife's CPP and OAS does not give us enough money to live. We need the income from our portfolio in order to balance our books.

The way I see it, the market collapses now and then. This may be a deeper and longer lasting collapse than usual but it will come to an end as they all do. Until then my wife and I will be spending as little as possible. The renovation of our ensuite bathroom will be the last big housing expense for the foreseeable future.

We won't be buying a new car. We won't be taking any expensive trips. We will be enjoying our grandchildren. We will be enjoying a night out at fine restaurant once a month. We will be seeing more movies at the Hyland Theatre, our local movie palace specializing in smaller, independent films.

I have a budget as part of the spread sheet that tracks the ups, downs and income of our portfolio. If the spread sheet shows us moving into the red, I rejig our budget. The truth is I haven't had to do much rejigging but I am also not adding as much to our portfolio as  I was in the past.

That said, there is still a little money available for buying more stock. I'm not going to miss this buying opportunity. If all goes well, my wife and I will come out of this dip, this recession, with more income than we entered it.