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RRSP And TFSA Portfolio Update

I wrote about my short term goals yesterday, which didn’t include any specific investing goals for 2011.  However part of my medium term goals is to double my total investment portfolio and increase my dividend income to $5,000 anually within five years.  This past year was a good one for my RRSP and TFSA portfolios (although not as good as 2009), with decent capital gains and a few dividend increases.

RRSP Portfolio

I changed careers in late 2009 and went from the private sector to the public sector, and since I now contribute to a defined benefit plan I no longer contribute annually to my RRSP.  That doesn’t mean this portfolio will be forgotten about, in fact I made quite a few transactions this year.

I opened new positions with Fortis (FTS), Shaw Communications (SJR.B), Great West Life (GWO), and TransCanada Corp (TRP).  I also added to existing positions with Telus (T) and Bank of Montreal (BMO).

I also completely sold off my shares in Reitman’s (RET), TransAlta (TA), and Groupe Aeroplan (AER) as I didn’t feel they fit with my dividend growth investing strategy for the long term.  I gained 16%, 9%, and 42% respectively with those transactions.  Of course shortly after I sold, Reitman’s raised their dividend by 11%.

Here’s a look at my RRSP portfolio:

Symbol Shares Book Price Market Value Yield
BMO 60 $52.21 $3,492.60 5.36%
BNS 45 $42.64 $2,588.40 4.60%
BCE 80 $24.52 $2,878.40 8.03%
CM 32 $60.29 $2,521.92 5.77%
FTS 100 $29.28 $3,391.00 3.96%
GWO 100 $28.89 $2,636.00 4.26%
LIQ.UN 160 $12.14 $2,438.40 8.90%
REI.UN 130 $14.75 $2,931.50 9.35%
SJR.B 100 $20.38 $2,145.00 4.32%
T 85 $31.74 $3,864.95 6.62%
TRP 60 $37.91 $2,293.20 4.22%
CASH $7,213.14
TOTAL $38,394.51 5.94%

I do have a fair bit of cash sitting in this account and am considering opening new positions with Husky Energy (HSE) and Sun Life Financial (SLF), or possibly a few others.  I’ll keep you posted.

TFSA Portfolio

I treat my Tax Free Savings Account as an important part of my 3-income stream retirement plan, and use the dividend growth investing strategy in this account.  Back in 2009 when I first opened up my TFSA, I purchased high yield income trusts.  This year I made some transactions to get this portfolio to where I want it to be.

I sold all of my shares in Yellow Pages (YLO.UN), Penn West Energy (PWT.UN), Macquarie Power (MPT.UN), and Davis & Henderson (DHF.UN), gaining 14%, 13%, 16%, and 4% respectively.  Then I purchased new positions in Emera (EMA), Enbridge (ENB), and Cominar REIT (CUF.UN), maxing out my TFSA contribution room – plus the gains in the previous sales.

Here’s a look at my TFSA portfolio:

Symbol Shares Book Price Market Value Yield
CUF.UN 70 $19.72 $1,457.40 7.30%
EMA 200 $24.84 $6,332.00 5.23%
ENB 100 $49.56 $5,651.00 3.95%
CASH $419.07
TOTAL $13,859.47 5.50%

I’m not quite sure what the plan is for my TFSA this year, since we will be putting a considerable downpayment on our new house and would also like to hold a cash reserve as a contingency fund in case of extra costs associated with the building process.

Related: 4 Hidden Costs When Buying And Selling A House

I’m hoping that 2011 is the year of the dividend increase, since I may not be adding any new money to either portfolio this year.  I’ll let the cash build up from dividend payments though, and wait for an attractive purchase price for any new opportunities.

For those of you who updated their portfolios at the end of the year, how did you do?  Are you bullish or bearish on the markets for 2011?

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16 Comments

  1. Sustainable PF on January 4, 2011 at 7:30 am

    Why do you think TA won’t grow it’s yield?

    • Echo on January 4, 2011 at 8:09 am

      @SPF
      At the time when I sold TA, their dividend payout ratio was over 100% (I believe it still is). I just thought it was too risky to have in my portfolio.

      • Jake on February 10, 2011 at 4:50 pm

        What about CUF.UN?

        • Echo on February 10, 2011 at 5:18 pm

          Hi Jake, I do own CUF.UN in my TFSA. The yield is great, but it’s trading a bit high right now. There are a few good REIT’s to choose from, RioCan and Primaris are other decent options. Put a few on your watch list and wait for a price drop.

  2. The Passive Income Earner on January 4, 2011 at 10:06 am

    You have a nice portfolio. Are you re-investing shares or just accumulating the dividends?

    TA is probably not a bad investment but I agree with Echo that there are better choices at the moment. When others will start increasing their dividends, TA will probably be slower.

    • Echo on January 4, 2011 at 10:58 am

      Thanks! I am just accumulating the dividends in my cash account and then when I have a worthwhile amount I’ll purchase something that is value priced.

  3. BeatingTheIndex on January 4, 2011 at 4:29 pm

    I am wondering why you sold PWT? How much was your cost per share?

    PWT are the biggest holders of Cardium land and they have barely begun exploiting their package.

    • Echo on January 4, 2011 at 4:49 pm

      @BTI
      I like PWT but it didn’t fit with my strategy of dividend growth stocks. They had cut their dividend from $0.34 down to $0.15 and then with the conversion they would be going down to $0.09/share.

      Not that I don’t like their future prospects, but I couldn’t classify it as a dividend growth stock to keep in my portfolio. I bought it at $19.25 and sold it around $22.

      Of course I still own LIQ.UN which essentially did the same thing…but that’s another story 🙂

  4. Stephen on January 4, 2011 at 9:43 pm

    Will LIQ.UN be losing its income trust status soon? Does that affect your strategy at all?

    • Echo on January 4, 2011 at 9:49 pm

      @Stephen
      They converted to a corporation on Jan 1st and reduced their dividend to $1.08/share (paid $0.09/share every month).

      I’m still bullish on the company and will continue to hold on to this one long term.

  5. The Passive Income Earner on January 4, 2011 at 10:49 pm

    From a tax perspective, LIQ will be paying a true dividend now as opposed to a cash distribution. Outside a RRSP or TFSA, there is a tax advantage now. I still like their dividend yield considering the business.

  6. Money Rabbit on January 5, 2011 at 12:00 pm

    Great portfolios!!! Very impressive.

    I’m hoping that the market will be bullish, because I do think consumer confidence is returning, albeit slowly and cautiously. But I’m also an optimist, so I suppose that I’ve just got my fingers crossed.

  7. My Own Advisor on January 8, 2011 at 9:55 am

    Great companies! Impressed!

    Question though Echo – why all the Canadian dividend-paying stocks in your RRSP? You’re not taking advantage of the dividend tax credit.

    In most provinces you can earn about $40,000 in dividend income, pretty much tax-free.

    • Echo on January 9, 2011 at 12:19 am

      Hi Mark, I’m not really interested in setting up a non-registered account to take advantage of the dividend tax credit. I plan on using my RRSP to fund my early retirement, and I’ll also withdraw from my TFSA, which is completely tax free.

      I also have a defined benefit pension, so I can’t afford to contribute to 4 different accounts 🙂

  8. Jake on February 10, 2011 at 1:27 pm

    Great stuff.

    I’m also looking to set up a high-yield TFSA account. However, as I’m new to the work force and a maxed out TFSA represents a large percentage of my total assets, I’m trying to keep to as few stocks as possible to minimize crazy trade fees and commissions. I was looking to have 5 to keep things as balanced as possible. Is it dangerous that they are all energy/green companies?

    What’s your take on Superior Plus Corp.? (SPB) It’s been doing well in 2011 and has a 13.2% yield.

    • Echo on February 10, 2011 at 5:06 pm

      Hi Jake, the TFSA stock portfolio is a tough one because you do want some diversification but the small contribution limits don’t help. Ideally you want to keep your trading fees at or below 1% of the transaction (so if you had a $29 fee, you should buy at least $3k of each stock). It’s a good strategy to start building up a high yield TFSA portfolio, and there’s nothing wrong with the energy sector. But don’t limit yourself to just looking at the highest yield.

      SPB would certainly give you a high yield – but how long can they keep payouts that high? I would wait until they report 4th quarter earnings (Feb 18th) and see what the market does from there.

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