Finally, I made my income and growth portfolio public (on the Seeking Alpha website). To do this in an easy to understand manner for myself, I decided to label my holdings as core, non-core, and speculative. I thought my core holdings would make up a big part of my portfolio, but instead, it was only 63%. To add to that, currently, 13% is in the Canadian banks (Royal Bank, and Scotiabank), and 11% is in Canadian telecoms (Bell, Telus, and Rogers).
Other than identifying the core holdings in my portfolio, I also decided to label them for income, for growth, or for both. This helps me in determining whether I’m buying a stock for capital gain or income. If it’s one for income, then, I shouldn’t be selling the stock as long as the income keeps coming, better yet, to keep growing by way of annual dividend increases of course. If a holding is for growth, then, my intention was to sell for a capital gain eventually. These growth holdings may also pay a dividend while I wait. However, I hope to continue holding my core holdings for as long as fundamentals stay strong. I just need to focus on buying at the right valuation.
I hope in identifying my cores and non-cores that I will trade less. I notice in Q4 2013, I traded 29 times. That is $290. And that eats into my returns.
The commentary that followed in my article was very informative for me as a Canadian indeed. Some suggested Canadian stocks I could look at (other than the common big 5 banks and the 3 big telecoms). Suggestions include some Canadian REITs. To my surprise, I also learned that some Canadians are holding US REITs in their RRSP account and there’s NO WITHHOLDING TAX on the distributions. Those US REITs include MPW, OHI, ARCP, and O. Further, Kinder Morgan (NYSE:KMI), if held in the RRSP is also mentioned to have no withholding tax on the distribution.
Someone pointed out that I maybe over-diversifying by holding the 3 telecoms. With possible competition entering the Canadian telecom market, I might as well be holding 3 Canadian banks instead of 3 telecoms. I think what I’ll do is to see how much the dividend is raised in Q1 2014 for Rogers, and decide from there, as Rogers is my biggest holding out of the 3 telecoms. I might just switch out of (at least some) Rogers for more Telus shares. I was just looking at the 3 telecoms’ dividend policies, and Telus seems to be the most dividend-friendly. It already has is dividend dates laid out for 2014 and it expects to have the semi-annual dividend increases until 2016, with intended 10% annual increases. (The above given the board approves at the time.)
In my opinion, the most intelligent comment I made in the whole comment stream, was
“I wish I were more defensive from day 1 [of investing]. Preservation of capital is the utmost important. And then, comes to maintaining purchasing power. Third would be thinking about income and growth.”
Check out my full Seeking Alpha article and the commentary that followed at: Identifying Core Holdings in my Whistler Income and Growth Portfolio.
Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.
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