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Wednesday, September 21, 2016

Saying goodbye to Kinross Gold Corp (K) and EnCana Corporation (ECA)

Spectacular news: Brad Pitt and Angelina Jolie are getting divorce. You can have all the money of the world, have 6 children in good health, be good looking, it doesn't stop people from getting divorce for whatever reason just like if they were just f nobody. Even with the millions of dollars, I wouldn't like to change of place. Its just going to be a very nasty divorce and life will become very complicated for those poor kids.

This being said, I had sold my Kinross Gold Corp (K) stocks, it result in a capital loss. I also sell off the EnCana Corporation (ECA) stocks that I was holding in my non-registered account. Both K and ECA were just going no where, it was time to sell, say goodbye and move on. Some money went down on the margin and some money was reinvested in Savaria Corporation (SIS). Excluding RRSP, my dividend income is probably of $7 100 now, which is good, but I am now only dreaming of a 8k dividend income. Its so so hard to get there, unbelievable.

As for my RRSP, I am thinking about seeling the stocks of EnCana Corporation (ECA) that I have in there and reinvest the money in Canadian Imperial Bank Of Commerce (CM). I was quite impressed by CM announcement today. I am curious to find out what their new partnerships with the National Australia Bank (NAB) will lead to.

After rough calculations, I think my net worth is now at $175 300. These days, I have all eyes on US stock. Facebook (for its research center announcement), Microsoft (for its dividend increase) and Johnson & Johnson (recent new acquisition) caught my attention. They could make good investments for the long term. I am not in a hurry to invest in those companies, as I am trying really hard to pay down my credit line debt. 

For now, the Fed didn't touch to the interest rate, but its being that in December, we could see an increase. And when it will happen, the markets worldwide could go down. There's a couple of things that the markets just hate and its bad news regarding Greece and the Euro, bad news regarding China or US economy. Its pretty much it. Markets don't like changes. When corrections happen, it help to be debt free and have a bit of money aside.


Ronni said...

Hi Sunny,
You call yourself The Dividend Girl but many of your stocks aren't really "dividend" stocks. They pay so little. How about getting back to putting good yielding stocks in to your portfolio? I want to see you get rich faster. Why are you ok with stocks that pay such low yields? Time to reevaluate.

Anonymous said...

"Microsoft (for its dividend increase"

This has already been factored in the price, it's now a little pricey. There was also a share buyback that moved the ticker up.

If you were thinking of investing in Microsoft for the dividends, make sure you understand the difference in taxation between US and Canadian stocks, so you don't compare the div dividend rates of a US stock to a Canadian one. if the stock isn't in your RRSP, you'll get the US dividend minus 15% US tax. If it's the unregistered account, you can get a foreign tax credit (if you know to ask for it), but the result profit will then be full amount before tax is taxed at the high marginal rate. In the TFSA, the 15% tax amount is lost and unrecoverable, because the US recongnizes RRSP but not TFSA accounts.

Sunny said...

Hi Ronni,

Its not because a stock pay a yield that may appear little at first that the stock doesn't worth to be hold in a portfolio. Focus need to be made on quality. Quality stock increase dividend overtime. And overtime, quality stocks only grow in value.

I try to avoid high dividend yield. Its a sign of bad management. Giving away too much to investors is not good. High yield are most likely to be cut and when a dividend cut is being announced, generally, stock will lost in value. I went to that before.

Right now, the best way to invest is to only focus on quality and focus for the long term. After that, stock market can go to whatever crash or correction, you'll be able to get over it because you only hold the top of the top.

Anonymous said...

Hi Sunny,

Ronnie has it all wrong. While dividends help compound growth, they are at odds with your objectives which is to find companies that are leaders in their industries and that are growing at a rate of 20% per year. If a company consistently grows its' earnings and reinvests those earnings in their business in effect increasing their earnings at a greater clip then 10,000 dollars will turn into a million dollars in 20 years. Again this process takes less time if it's one of those fast growth companies such as Microsoft was in the 80s/90s. For 26 cents you put in Microsoft in 1987 you would have 26 bucks. That's a compound rate of return of 39,000%. And note during that time Microsoft didn't pay a dividend. Do not be afraid to add some small cap stocks to your stable of horses.



Unknown said...

Mark, I don't understand your comment about Ronnie's reply. We're both replying to the blog post and the stock mentioned in it, in 2016 not 1987, and the reasons stated in that post. These are all blue chips and not growth stocks. Ronnie's post reads a bit harsh, but he's correct. Microsoft, which I used to be employed at, is in slow growth, dividend paying, and has downside risks and little upside.
If you're going to be doing that kind of stock picking with such a small capital, i think you should just buy etf like QQQ and follow the growth of the market more generally. And sleep better.

Sunny said...

I guess we all have our views on what is a good stock or not. I invest strictly in my opinion, in what I believe will be a good fit for my portfolio, but comments can be made.

Anonymous said...

Hi unknown,

The point of my post was to help Sunny understand that dividends while helpful do not compensate for the growth of a company which uses its' earnings to. Help make it more profitable(which is what Microsoft did from when it IPOed in 1987 to 2004). Instead of paying a dividend Microsoft reinvested its' net earnings right back into its' business, instead of paying a dividend.(hence the slow growth/no growth in Microsoft sine 2004) look at high growth stocks like Cisco, or Dell, Nike, Apple and CAE. While those companies had fantastic growth they didn't pay a dividend until they matured which took 10 to 20 years.

Sunny said...

Its just look to me like there's a lot of moron out there trying to "help".

Anonymous said...

charts don't lie:)


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