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Thursday, September 1, 2016

Saying goodbye to JFT Strategies Fund (JFS.UN)

Good news, I suspect my net worth to be at $170 000! Finally!! This weekend will be a good time to update my portfolio to officially find out if its the case or not. Surprise, surprise! We'll see if my flair is right or not.

Its hard to believe that we are now in September. Susan Brunner post a few days ago her review of the super uper Andrew Peller Ltd. Check it out! Susan also review recently another great stock that I hold in my portfolio, Savaria Corporation (SIS). My recent investment switch from ADW.B to ADW.A grow of 1.47%. There's a lot to be excited about when it come to Andrew Peller Ltd, espepcially when it come to their 3-for-1 stock split announcement. I LOVE stock split. I ADORE stock split. Usually, stocks who split gain in term of value and this time shouldn't be of an exception. So be ready for real hot capital gain and a lot of real cold fresh CASH. This is what I was made for.

With a dividend income of now $6 894 and... 18 cents, every penny count - I am only searching for ways to see that amount increase. Options are limited. Targeting stocks that pay a high dividend yield is not a good option. I am always amaze to see garbage articles coming from so call financial writer like Gordon Pape or even worst Rob Carrick actively promoting the hungriest for big juicy dividend yield. DANGER. You can be sure that the minute that a company announced a cut in dividend distribution - usually - stock value go all down. Its something I had experienced too many times. With Just Energy Group Inc. (JE) for example. It lead to very difficult situation. First - capital lost, and secondly, it leave the tiny small investor to a major decision: to sell the investment and declare a capital loss. Or keep things the way they are and hoping for a recovery in the value.Its the problem I am facing with Just Energy right now. I love JE too much to get rid of it ta this time.

I may have done a very wild move while buying penny stock Stornoway Diamond (SWY), the "Dividend Girl magic" didn't work out well  this time! SWY value is quite boring and it doesn't move that much, at the exception of the stock market opening. SWY went down as soon as I get in the game. I am mostly a very conservative investor. SWY investment was made to satisfy my taste of excitement which I have now enough for the rest of the year 2016. Oh yeah!

An easy way to earn more dividend is to get rid of investment that don't pay any dividend distribution. I hold some JFT Strategies Fund (JFS.UN) units in my TFSA. JFS.UN doesn't pay any dividend. And it cost me 1.5% in management fee. Currently, JFS.UN is down of $216 in my portfolio. And its been like this for a long time now. For way too long. And its annoy me. I am paying management fee for nothing at all. And the fund is not giving me anything in returning. It seem like Jean-François Tardif magic is no longer working. Maybe he should start using Stockopedia!!!! I am very upset that Jean-François Tardif is not able to deliver more than that. Its a shame.

Big name like that, and even Eric Sprott use to be hot, and make their investors collect gold. That was before 2008. Since 2008, a lot of stars are stars no more. Small investors like myself are more able to generate income and capital gain than any of those fresh stars. Its because the game had changed and what use to work before doesn't work that well anymore. Their little gamics are not working anymore. In volatile market, nothing pay more than following the good old investing rules, rules that were never followed by those big names who are completely lost and are only there to make us lose time and money.

I am not stupid enough to continue holding to JFT Strategies Fund (JFS.UN) like a complete jerk when the fund doesn't generate any capital gain and, even less, any dividend distribution. So its over. I am selling all of my JFT Strategies Fund (JFS.UN).

2 comments:

Jonathan Somerville said...
This comment has been removed by the author.
Anonymous said...

I thought to share some info on JFT Strategies as I noticed many of your comments are uninformed and wrong. I hope this is helpful and not read as being rude.

It's not that the JFT units don't pay a dividend it's that they don't pay a distribution. Most funds have fixed distributions (5%/year for example), however if they don't earn it from within their investments then they are simply giving you your money back and lowering the NAV of the units. With that said the structure of the JFT is such that there is no distribution. Within the portfolio there are many different bonds and preferred shares which generate interest income as well as holding dividend-paying stocks. All of the interest and dividends earned stays in the fund and increases the NAV by the exact amount.
If you’re in need of the income from your investments then it is not a suitable one for you. However if you don't need the income then I couldn’t think of a better structure as all the interest and dividends are left invested and you don't have to pay a commission to buy more units.

To state that the JFT fund has not generated any capital gains is also wrong. In 2012 when the fund started in June it earned 3.51% (7 months). In 2013 the fund earned 18.07%. In 2014 it earned 10.13%. In 2015 it earned 9.42%. Thus far in 2016 it has earned 3.23%.
Finally, you may or may not be aware that since the JFT Strategies is a closed-end fund its value is based on what investors are willing to pay for it. In other words its price deviates from the actual NAV. Note that in prior years it had been trading at significant premiums to its NAV, and presently it is close to trading at its actual NAV. You may have purchased it at a time when it was trading at a significant premium and the price compression likely contributed to you losing $216.

The performance of the fund in 2016 does look poor compared to the broader markets, however, note that this is a long/short fund which aims at trying to minimize volatility. This structure means it will underperform in bull markets (like 2016), but outperform in bear markets.

Lastly, I also noticed that you had owned JFT when it first IPO’d but then sold it soon after as it “wasn’t doing anything for you”. As it turns out the period in the middle when you didn’t own it was the best performing times. I’m not trying to rub any metaphorical salt but I mention this to highlight that the pitfall for most investors is basing their decisions on emotional reasoning.

I hope this helps you and your readers. Unfortunately your comments are uninformed but well intentioned. Perhaps the best thing for you to do is utilize a roboadvisor who ensures you rebalance your investments according to your risk profile.

 

Thank you

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