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Wednesday, November 2, 2011

Welcome in Sprott Strategic Fixed Income Fund (SFI.UN)!

Tonight is pay time (I am waiting for my paycheck), and in preparation to that, I buy some extra stocks of CNR to add up the number of stocks I already own of that company. I also buy some units of the Sprott Strategic Fixed Income Fund (SFI.UN). I had an eye on that one for quite some time. I already own a lot of Sprott stuff. I have some Sprott Inc. (SII) stocks, I had invested quite some money in the Sprott Canadian Equity Fund. I also invested in silver in both Sprott Physical Silver Trust ET (PSLV) and Sprott Physical Silver Trust UTS (PHS.U). I am a bit familiar with Sprott financial products. Most of them, well at least the ones I had invested in, are super aggressive, meaning that they are subject to the volatility of the stock market and they are all super sensitive to it. But the Sprott Strategic Fixed Income Fund (SFI.UN) is quite different.

I could have invested all of my money in the CNR, but I decided to diversify myself and move on something less volatile than stocks. During the stock crash of August 2011, even at that time, SFI.UN had remained quite stable. See, in my portfolio, I want it all. I want to earn dividend, I want a portfolio that will grow in value and at the same time, I am also looking for stability in the value, meaning I don’t want a portfolio that will experience some too quick capital loss.

Personally, that’s why I never invested in oil. I really dislike everything related to oil. I day trade on an oil something index in the past – this summer actually – and I learn my lesson. Oil sector is very difficult to understand, I find and it’s extra volatile. It’s also produce pollution and a lot of environmental concern. Just have to remember about the Louisiana disaster and its oil spill. That wasn’t too long ago. For all of those reasons, oil companies are a big no no for me.

I agree that pipelines are not far behind oil for environmental concern, but I prefer pipeline over oil. Thanks to Derek Foster, I made a little fortune on PPL title. Pipeline yes, oil no. So there’s a bunch of concerns that play in when it comes time for me to pick my stocks. That’s why there’s so many changes. If I would have more money to invest, I would have also invested in Enbridge (ENB). SFI.UN had been launched this year, but because we had experienced a terrible stock crash in August 2011 and at that time, SFI.UN was still over 9$ per unit. SFI.UN was launched at 10$ per unit. So right there, it’s a wow factor. However, I am aware that the potential of grow is less than it is with stock. I am already very much exposed to the stock market. Adding some income fund in is my way to diversify my asset and, at the same time, add a great dividend (SFI.UN dividend yield is of a very great 6%), and also bring in stability in the value, even if I am talking here of less than 100 units. But still the effort is there.

I first invested in Canadian National Railway Co (CNR) when the stocks were only 65$. Today, CNR closed today session at a very good almost 80$ per stock. I know, I made a 15$ profit per stock in a matter of a couple of weeks. That’s another wow factor. Unfortunately, it’s not everything in my portfolio that’s performing that well. But I believe in my chances to recover. Just today, my non-registered portfolio closed today session at 109 309.23$. It’s a good move forward and I just hope to be able to survive the Euro crisis. The 2 investments I made today was for close 1 500$.

I was surprised when the market gain points today. I don’t get it because following referendum Greece news, I taught I was about to face another disaster. But it didn’t happen that way. Actually, if you read my blog very carefully, things never really happen the way it was initially plan and truly, the stock market, I don’t understand it. Voilà. But what I do know for sure is that I am going to recover from my capital loss. One day.


Anonymous said...

Sunny, do you have more than one non-registered account? Reason for asking, you have margin usage. For tax purposes, I believe the margin interest is tax deductible if is used to create income (i.e dividends and interest).

Since you have income funds, which possible pay Return of capital, which is different from dividend and interest. How do you keep track of it, whether you have more than on Taxable account?

janinenicolee said...

I just stumbled upon your blog and I love it! I have my own PF blog and I have just started to look into purchases of stocks and I was wondering if you could provide some insight as to how you first started? Would love any knowledge and advice you are willing to pass along!

Sunny said...

I just have one non-registered account. I don't have too much in TFSA because everything is in my non-registered to support my margin.

Hi Janine, my first investment in stock was in 2008. You might want to go through the reading of some 2008 posts. Not that I don't want to share stuff with you, but explaining it all in here we'll be too long and I am busy with stuff right now.


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