I updated my portfolio yesterday, something I didn't do in a really long time. Actually, I didn't publish any portfolio update since August! And that's because the TSX had been such a rough place to be this year. I usually update my portfolio only to flatter my ego, when my portfolio registered great gains. With this recent update, I just wanted a more precise idea of where I was standing. I had been thinking about paying down my margin for also a really long time, its been an idea that stayed on, but I never took action. And my margin debt even was real massive shit, a $100 000, and sometimes, it exceed the 100k mark. I had a margin account for quite a long time. But when I first open my brokerage account, I didn't have back then a margin account - I had a margin opened only several years later. At the time, the idea was to open a margin to pay off some debts. And at the time, it was quite a good idea. The stock market was on a good path, interest rates were low. I had everything for myself. And during those good years I collected good assets. And I occasionally used my margin to pay some living expenses, and I sometimes use my margin money to invest. I was that kind of girl. I was a margin kind of sexy girl, tun of money at my feet, and the power of my young thirties.
I never had any problems managing my margin account, mostly because it was living under great stocks that I was holding inside my non-registered portfolio, and because I always try to keep a $13 000 of unused margin money. 13k being the minimum of the minimum. $15 000 was better, and $20 000 even better. But no matter how much I had left of unused margin money, whenever I was leaving for my annual vacation in Cuba - or even while leaving Montreal for a few days in New Brunswick, I always had to use extra precautions. So what I used to do whenever I was leaving Montreal behind, I was making sure to transfer between 10k to 15k from my credit lines to my margin in order to keep it safe while I was away. The stock market being what it is, I couldn't take the risk of not doing anything to keep my margin safe.
There's nothing safe about having a margin account inside a non-registered portfolio. No matter how much cash you put in, a margin situation is never safe. But it kept me satisfy and I had a peace of mind knowing that I had extra cash on my margin while being away. This little scenario kept happening each time I went to Cuba - once a year - and every time I went to New Brunswick - many many times a year! Just keeping my margin "safe" cost me money. Not that much, but still, it was money flying away.
I had my fun with my margin account, I had paid my other debts. And back at the times, the interest rate was low on my margin account - the good old days - but it's not the case anymore. Interest rates are skyrocketing and it's not going to stop anytime soon, especially in Canada. It's been announced that the prime rate will get increased again sometime soon. I appreciate the fun margin account, but now, I am somewhere else. I felt more and more the need and necessity to pay off my margin.
I decided to sell my Premium Brands Holdings Corporation (PBH) shares, it was a personal decision that relies exclusively on my shoulders, like the rest of all of my investment decisions. And like all of my decisions, they are all mine to take. And it makes me kind of laugh to read the comment of readers. I only post them to entertain. It's easy to say that I should sell my PBH shares when the investment was rocking at $122 a share... It's easy to talk, but its something else to be an investor on the everyday life. And I would like to know how much money those soft talkers actually have for themselves...
I always wrote about absolutely everything that concerns my investment life and I go into the deep bottom of it. Popular bloggers don't even give half of what I give to my readers. I made great money by selling my PBH shares, but of course, I could have made even more if while selling when PBH was on top. But my intention has never been to sell my PBH shares. I decided to sell because I didn't want to see PBH go lower and I just couldn't be there and do nothing about it. I could have only partly sold, but I was released to see my margin usage going down. Since the amount on the margin was exceeding the $100 000, my only option to reduce it was to sell some assets. The stock market is a place of opportunity. The buy and sell are orders, and the "if I would sell", or the "if I would have bought" always remain. I could have made better, or worst, but I stand on my decisions. Talkers can talk, but cane the same talkers can do better? I doubt.
The stock market is not a soft place to be, the TSX is rocky, but interest rates are going up. It's not the best cocktail. In other words, what I mean is that we just don't know what this is going to lead us to. The financial places worldwide could get all upside downs again soon that it wouldn't surprise me at all. Usually, the TSX is easier and I get more of a natural feel of it. Even following the 2008 stock crash, it was writing in the stars that the TSX was going to jump over it. I knew that. It was what I believe in. But now, it's all different. I love investing in stocks and I think that I will always be investing in stocks, but not while having a margin. On the date of November 16, my margin account is now at $66 373.29. I just don't remember the last time my margin usage was so low.
Selling stocks at profit inside a non-registered account mean tax to be paid. If you would like to learn more on the matter, this article by Tina Orem is really great.
2018 year was the year I sold PBH, and 2019 could be the year when I sell my oil stocks. You understand of course that the idea is not to sell everything on the same year, in order to pay a bit of tax this year, and a bit next year. I could invest a bit in my RRSP by March 2019 - its an idea I have in mind.
Posts
