UA-300188601-1 The Dividend Girl: No DRIP no more

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Tuesday, April 24, 2012

No DRIP no more


I never taught I will do so anytime soon, but yesterday, I call my broker, DRING, DRING and cancel all DRIPs of my Canadian non-registered portfolio. Fact is, I don’t have much in cash reserved, if not almost nothing, just a few hundred bucks. Cashing in the dividend distribution is greatly needed at this time. Especially now that I am about to move back in Montreal. 

I am using as much possible my American Express for all places that accept it because I have a 0.99% interest rate for one year... My limit is very low on the American Express, which is unfortunate. I am now a big fan of buy-now-and-pay-a-bit-later..

As announced in the previous post, I am moving back to Montreal where I got a temp position. Temp or not, I jump on the offer. Job searching is terribly annoying. Anyway, the job is well paid and I don’t mind spending the whole summer in Montreal. 

I am under process to have my will done. It’s something I never took care of, probably because I don’t have kids of my own and/or sexy husband. When I will be dead I will be dead. Money won’t be of any help, but it could help other people of my family. I guess that’s the idea behind a will. Basically, I will use my $185 tax return to pay off for the will, which is $150, for the cheapest I was able to find.

From a comment I read in a previous post, I think some haters-readers really don’t know what it is to have small business. Starting something from scratch is not easy. And while mixing my small business activities with job searching well, all I can say, it’s all hard work. And talking about my small business, my English Web site is now online and no, you won’t be getting the link from here but you can always take a look at here to satisfy your taste for gossip and hot stuff.

35 comments:

Anonymous said...

probably a good idea. i never drip for three primary reasons:

1) calculating average cost in a non-registered account is a pain, especially with monthly dripping. each time you buy shares, you have to adjust your average cost for tax calculation purposes in the future. imagine holding a stock for 10 years, you will have 120 calculations to do. if you don't do this calculation as you go, you will maybe scramble to find your paperwork to come up with the calculation.

2) you don't choose when you invest your money and you can't buy partial shares and obviously you have no choice but to buy the same stock.

3) i rather receive cash and choose what to do with it and wait a better time to buy more shares of maybe another company even.

main advantages is no commission additional shares and some companies will offer a discount purchase price for dripping.

Anonymous said...

well your business sounds like it's more like an online business, which in my opinion is one of the easiest business to start up, but not necessarily easy to succeed and make lots of money... you are lucky that you don't have overhead or huge initial cost or even employees to handle and require huge inventory of goods to start up. the fact you are moving to montreal and be able to do also the small business on the side at the same time means that you are most likely doing a web based business, maybe selling your paintings and shipping it online???

imagine opening your own coffee shop, you will busting your ass off non stop to make money and that you haven't experience it in your life. you complain all the time. in fact a call centre job is perhaps very less physically demanding job in this world and it's also the easiest to get in.

you take everything way too easily and you are too optimistic...

Anonymous said...

we are telling you what you are doing wrong and you are still ignore everyone's advice. the only way you will learn your lesson is to see your entire portfolio cut in half and more, you get lots of margin calls and your interest rate on your loans doubles, then you will say to yourself, damn I should have listen more carefully.

until then, i come back here and tell you, ha ha told you so... you are not even performing close the tsx index...

Anonymous said...

I'm not sure what all your debt encompasses but I'm assuming a good share of the interest is tax deductible. So why is your tax return so small?

Sunny said...

My return was small because my income was more than 40k.

Anonymous said...

coke announced a 2 to 1 split! that should be an investment for you. you can get cheaper...

Anonymous said...

DNI is going back to 16 cents. Sell it before you lose all your gains. Look at all your sprott funds, all sinking like the titanic. Sprott sucks, never touch their stuff.

Anonymous said...

sprott great performance of the past was due to commodities, oil, gold primarily. but that bubble has burst and most likely you will never see those type of gains ever! lots of your investments are based on the hype. you are chasing after the hot stuff. KEG is another example, it's gone up almost 1005...

Sunny said...

Never see those type of gains ever?

I don't agree.

From the past couple years, what I learn by watching the stock market can be resume by this sentence: when it goes down, it goes down, and when it goes up, it goes up.

It go down-up, down-up and sometime down-down-down, up-up-up...

lol

Its the reality of today.

However, the market always played in my favor.

Its rough, but while holding to my best assets, its possible to go over the volatility, but you shouldn't focus on exceeding the TSX index or giving yourself a surrealist goal.

Its still possible to benefit from the market in the reality of today. That's all I have to say.

Anonymous said...

Sunny, wake up!
You bought silver hoping it would double in 3 months, it crashed. You bought more silver when it crashed thinking you where doing a good move, today it's even lower. You've been holding SII for ever which you paid 9$ or 10$ and today trading at 4$ and some change. You day traded with HZD and sold at a lost to buy K in order to recoup your loss but you're down close to 50% on K in less than a year.

It's been 5 years for sprott and it's still not up and it might be 10 years before you recoup your loss on gold and silver. And while you're holding those loser, you're money could be invested in other stocks and making money.

Now the most stupid thing you say is not focusing on beating the TSX. If you can't beat it, why go through all the trouble of picking stocks, just buy an ETF of the TSX and make more money.
If the TSX is up 5% and you invest 100k, you make 5k. If you don't beat the TSX by picking stocks and only make 3%, you only make 3k. Why bother...

You're not properly diversified, only invested in Canada and too much gold and silver and that's why you're under performing. It would be so much more simple to buy an etf allocated with 25% canadian, 25% us, 25% international and 25% bonds.

Canadian market beat the US during 2000 to 2010 and now US has beaten the Canadian market for the last 2 years. If this continues for the next 8 years, you will miss out on all these gains.

But don't listen to me, just like you didn't listen when you taught you couldn't go wrong with silver and gold.

Ruth said...

what i don't like about drips is that money goes back into a losing stock when it could be used or saved for a more productive stock and besides you can use the cash..as you said.

Sunny said...

Hi Ruth,

All stocks cannot be winners unfortunately. I had experienced what you had described with Yellow Media (YLO). At this point, I am looking forward to make an average of $600 per month in dividend income. Its quite an interesting amount of money.

My ONE and ONLY mistake lol is that I don't have a cash reserved. I did not received any unemployment insurance yet. It was my fault, I forgot about one job and it wasn't was my declaration but the agent add it on for me. And also the fact that I am self-employed, its taking a longer to be approve. I should know by the first week of May what happen.

When I was massively saving to invest, I always think that in case of laid off, I will have unemployment, so I never worried about keeping cash. What I did not realize is the delay it take before getting approved...

Things going to be better once I will be in Montreal.

Anonymous said...

You have more than one mistake and the others will show up in time...

Anonymous said...

Hi Sunny,

I know you are going through some tough financial times-we are all. I think you are making a grave mistake in cashing out of your DRIPS. I think Derek Foster used this analogy in this book: DRIPS are like fruit growing on a tree. You don't want to eat the fruit before they ripen(ie when you can live safely off of your dividend earnings). Instead of eating your dividends, use the magic of compounding. Give your dividends time to compound into even more dividends. Isn't that what Derek Foster was advocating by using DRIPS?
I have a question for you:
How many of your companies increased their dividends in the past three years?

Enjoy your trek to Montreal. I hope you don't run into any rowdy students.

Mark

Sunny said...

ahhhhhhhh!

It wasn't an easy decision to take. But I am really running out of money!! I can start back the DRIP at anytime...

You are making me doubt of my decision now.

Anonymous said...

Sunny, wake up!
You bought silver hoping it would double in 3 months, it crashed. You bought more silver when it crashed thinking you where doing a good move, today it's even lower. You've been holding SII for ever which you paid 9$ or 10$ and today trading at 4$ and some change. You day traded with HZD and sold at a lost to buy K in order to recoup your loss but you're down close to 50% on K in less than a year.

It's been 5 years for sprott and it's still not up and it might be 10 years before you recoup your loss on gold and silver. And while you're holding those loser, you're money could be invested in other stocks and making money.

Now the most stupid thing you say is not focusing on beating the TSX. If you can't beat it, why go through all the trouble of picking stocks, just buy an ETF of the TSX and make more money.
If the TSX is up 5% and you invest 100k, you make 5k. If you don't beat the TSX by picking stocks and only make 3%, you only make 3k. Why bother...

You're not properly diversified, only invested in Canada and too much gold and silver and that's why you're under performing. It would be so much more simple to buy an etf allocated with 25% canadian, 25% us, 25% international and 25% bonds.

Canadian market beat the US during 2000 to 2010 and now US has beaten the Canadian market for the last 2 years. If this continues for the next 8 years, you will miss out on all these gains.

But don't listen to me, just like you didn't listen when you taught you couldn't go wrong with silver and gold.

Anonymous said...

Amen to that comment! It's so true, no point of picking your own stocks, if your goal is to underperform the stock market like you say... this is crazy talk. you are not thinking straight...

Anonymous said...

Now the most stupid thing you say is not focusing on beating the TSX. If you can't beat it, why go through all the trouble of picking stocks, just buy an ETF of the TSX and make more money.
If the TSX is up 5% and you invest 100k, you make 5k. If you don't beat the TSX by picking stocks and only make 3%, you only make 3k. Why bother...

Anonymous said...

Mark,

Derek Foster was saying Dividends are the "fruits" of the tree.

Sunny said...

I pick stocks that I find interesting, hoping they will perform well. But getting into the game of beating the index is dangerous. If my portfolio provided me a capital gain return of let say 6%, with a dividend income of 6%, I will be just alright with that. That make a 12% return per year alone!

Another thing is that I invest for the long term. And I am currently doing well. Silver will eventually goes up, believe it or not.

You can not agree with my strategy, but I am not giving you the right to insult me, your big looooserrrrrr!

Anonymous said...

Sunny,

When did you use most of the debt for leverage? People love to give you a hard time about it.

You made mistakes and everyone else makes them. It is part of the "game of investing". Even Warren Buffett makes them. Silver will rise again as there is less of it on earth than gold and it has many uses. Gold is horded.

Sunny said...

Mistakes? Which mistakes?

The problem being there's too many morons reading this blog.

Ruth said...

Sunny, i don't know what it is but everytime i read your blog, it makes me laugh, perhaps you have missed your calling and should write a bit of comedy. l like it that you put all comments in. you are sooooo young that the silver will be up by the time your 65. i wish you would hold more pembina and enbridge though. keep up the blogs..i like them.

Anonymous said...

You are not getting 6% dividend. A lot of your stocks pay less than 6% and some have none. Its more like 3% you are getting and you have to pay interest on loan.

Anonymous said...

Sunny, no one averages 12% per year in the long run, so you should get that dream out of your head. The Toronto Stock Exchange has returned about 8%/year (dividends and capital gains both included) over the past hundred years or so, but by picking stocks instead of following the index you should expect to do worse than that.

Anonymous said...

Actually too many morons writing this blog!

Anonymous said...

mistakes, plenty of them...

silver, leverage etf, sprott, tim, the majority of your stocks, your debt level is way too high, investments all over the place...

Anonymous said...

high interest rate, high leverage ratio and market crash (i.e. 30-40% decline) then you will learn your lesson...

Anonymous said...

Hi Sunny,

Just wanted to wish you all the best with your investments. Hope you achive your financial freedom that we all look for in life.

Anonymous said...

you are the moron not listening to people's advice carefully. you are stubborn. only way to learn your lesson is high interest rate, lots of margin calls and a major market crash

Anonymous said...

If you're going to call your readers morons, you might as well shut this site down...

Anonymous said...

Sunny, do you provoke your readers to be mean to you (by calling them losers, moron, etc.) so you can have more readers and make more money.

I found your site when I was researching dividend, but I don't follow it for investments purposes but more like reading a gossip magazine.

On the bright side, most financial site, I only visit once, but this site has me coming back. I sure hope you make lots of money off advertisement for all the abuse you take although you do dish some also.

Anonymous said...

Sunny it seems to me you do not fully understand investing... There are many different ways to get from A to B. That said in investing the path one must take to get there in the same length of time changes. things that worked in the past will not always work in the future. Take care and refocus on your fundamentals - your goal was financial independance, No? Time to revist how to best attain that goal?

Anonymous said...

@ the anon. coca cola buyer. a split doesn't make a stock cheaper (or even better), just more of it on the market. it doesn't change the fundamentals.You're gambling/guessing that its more attractive. @ the anon. who doesn't want sunny to cash drips as per Derek Foster. Cash flow is paramount. If sunny can't meet her bills, its better to cash the drip then incur more debt.It still doesn't touch the capital if she leaves it alone. @ the anon. who said the whole market averages 8% return. Even thats optimistic, unless you're already 100 years old. Entry, exit, time in market make a big difference. I agree, the purpose of stock picking IS beating the index. Don't expect sunny to calculate a ROI. @ sunny. I think you're now learning a new lesson about having a safety net of cash on hand in the form of cash or cash equivalents. Your TFSA could/should have been your safety net. IMHO convert it as best your can to cash, take your lumps when necessary. Put it into a TFSA high interest savings/certificate. You certainly don't want to be in the position of being forced to sell off to meet personal expenses. Cheers!! Anony-macaroni-n-cheese

Anonymous said...

"No one averages 12% per year in the long run, so you should get that dream out of your head..."
Wrong,
Anthony Bolton
James Simons
...
(ok, the list is not very long :D)

 

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