RRSP Portfolio Update 2012
It’s been a while since I’ve given an update on my RRSP portfolio. I made RRSP contributions for 10 years when I worked in the private sector (taking advantage of employer matching contributions), but I changed careers in late 2009 and moved to the public sector. Now that a significant portion of my salary goes toward my defined benefit plan, RRSP contributions are no longer a priority.
This doesn’t mean that my RRSP portfolio will be neglected. I’ve thought about what to do with my RRSP for the last few years and decided that I will make small contributions each year, while continuing to reinvest my dividends.
There hasn’t been much buying and selling going on in my RRSP portfolio. I added to my position in Great West Life (GWO) in late September. GWO is the dog of my portfolio, as the insurance sector has been beaten up lately, but I thought it was too cheap to ignore at $20 per share.
I made a $2,500 RRSP contribution in early December and then opened a new position in Canadian Oil Sands (COS) later that month.
2011 was a good year for dividend increases. Scotiabank, BCE, CIBC, Fortis, Shaw Communications, Telus, and TransCanada Corp all raised their dividends last year.
Here’s a look at my RRSP portfolio as of March 2nd, 2012:
| Symbol | Shares | Book Price | Market Value | Yield |
| BMO | 60 | $52.21 | $3,469.80 | 5.36% |
| BNS | 45 | $42.64 | $2,414.25 | 4.88% |
| BCE | 80 | $24.52 | $3,249.60 | 8.85% |
| CM | 32 | $60.29 | $2,461.44 | 5.97% |
| FTS | 100 | $29.28 | $3,278.00 | 4.10% |
| GWO | 150 | $26.32 | $3,475.50 | 4.67% |
| LIQ.UN | 160 | $12.14 | $2,752.00 | 8.90% |
| REI.UN | 130 | $14.75 | $3,572.40 | 9.35% |
| SJR.B | 100 | $20.38 | $2,038.00 | 4.76% |
| T | 85 | $31.74 | $4,863.70 | 7.69% |
| TRP | 60 | $37.91 | $2,604.00 | 4.64% |
| COS | 140 | $20.71 | $3,283.00 | 5.80% |
| CASH | – | – | $8,098.48 | – |
| TOTAL | – | – | $45,560.17 | 5.26% |
This portfolio generates about $1,800 in annual dividends. I haven’t set up a DRIP with any of these stocks – instead, I prefer to let the dividends accumulate in a cash account until the right buying opportunity comes along. From there, I will either add to my current positions, or open a new position with another dividend growth stock.
There is a fair bit of cash sitting in this account that I need to put to better use. I have a few dividend stocks on my watch list, so hopefully I can find some good buys in the next few months.
What are you buying this year?
You seem to have calculated the dividend yields based on orignal cost rather than current price (at least for the first entry). Is this deliberate? This way of looking at yield feels good, but it is misleading.
@Michael James – it was deliberate and it makes me feel good 🙂
@Michael James: I don’t see why this would be misleading. Your personal yield should be based on what you originally paid for the investment.
@Echo
What is the original yield of the stocks?
I would love to find an Excel sheet that can monitor my portfolio like this but show the actual returns (breaking out dividends on another column).
Any idea what you will get with your cash investment?
@Steve – the yield in the chart is the yield on cost. Some stocks have increased their dividends and the YoC adjusted accordingly.
The Excel sheet that I use tracks the actual returns and breaks out the dividends, but it was too big to fit into this post.
Not sure what I’ll do with the cash . Maybe Husky Energy (HSE) or more Canadian Oil Sands (COS).
@Boomer: Calculating yield based on what you paid ignores the time that has passed. If I bought MSFT in mid-1986 for a split-adjusted price of 11 cents per share, my yield would now be over 700%. This has little meaning. It’s just a feel-good number that has no bearing on whether MSFT is a good investment or a good dividend-payer. To make decisions on where to deploy new capital, one has to look at the yield on the current stock price (along with other factors, of course).
@Michael James: OK! OK! I get you. I agree that just calculating your personal yield has no bearing on whether a stock is a good investment now and whether it makes sense to invest more new cash. However, a 700% return does look like you made a nice original investment, don’t you agree?
@Boomer: Yes, I agree that a 700% return every year, even spread over the 26 years since the original investment, indicates that the original investment was a very good one. But, every time I feel really good about my investments (like I did just before the tech bust a decade or so ago), something bad happens 🙂
Good job on the RRSP growth! Both in contributions and gains. When it comes to investing, I deposit the money into the account and my husband does all the investment research and buying – for both of us. Needless to say… I can’t answer your question on what we’re buying – because I really don’t know! However, I will admit to maintaining a few different spreadsheets tracking our portfolio growth, total savings, net worth etc.
Oh no, not the yield on cost argument again. 🙂
http://canadiancouchpotato.com/2011/02/02/debnking-dividend-myths-part-6/
Even if the stocks’ yields were current, the 6.25% figure is not accurate. You have simply taken an average, without accounting for the fact that you don’t hold equal amounts of each stock. You’ve also ignored the cash position. The weighted average yield is actually 5.26% if you include the cash portion and 6.40% if you don’t.
I don’t mean to pile on, but investment performance has to be measured accurately or you really have no idea whether your strategy is working. Advisors figured this out a long time ago. 😉
@Dan – thanks for stopping by. I appreciate the feedback.
Aside from the typo (5.26, not 6.25), I’m not really sure why you and Michael James are fixed on the yield on cost. It’s just a fun metric for dividend investors to track (like an indexer finding an ETF with a 0.01% lower MER 😉 ).
I never said anything about beating the market with yield on cost (which is the argument in your post), I simply stated the yield on cost for each of the stocks I own. I included it in my chart because I think people are interested (see Steve’s comment above).
@Echo: The 5.26% v. 6.25% wasn’t a typo. I think you took the simple average yield of all the stocks in the portfolio. But to be accurate, you would need to take a weighted average, so larger positions have more influence.
I just point this out because I see this a lot when people calculate portfolio MERs and performance. The forget that a 10% position has only half the influence of a 20% position, so simple averages are not accurate.
Not trying to be a prick, honest. 🙂
@Dan – I assure you that I understand the concept of weighted average, but I appreciate what you are trying to do (honest).
@Echo: If you put something in a post, you have to expect that people might comment on it. You may see it as a fun measure with no important meaning, but some dividend investors think that it actually means something.
@Michael James – I have no problem with the comments (all comments are welcome), I just don’t agree with you that the chart is misleading.
I understand what you’re saying about yield on cost, but it’s more interesting to see the original yield than to list the current yield that changes daily and can easily be looked up online.
Since this is my portfolio update, I think people are more interested in when I bought the stocks and what the original yield was. Does that make sense?
If anything, I hope that anyone reading this post realizes that these stocks were purchased a long time ago, and that yields and valuations change over time.
All of these comments circle around Canadian energy and resource plundering. Sure it’s great to invest and get high returns on resources, but how much do any investors like this really know about the ethics, sustainability and moral authority of these resource companies? I would say Canada lags way behind other nations when it comes to ethical, sustainable and morally-sound investment opportunities. Not to mention what Canadian corporations do to people working in their 3rd world, overseas operations!
I get what you’re saying Echo,and I agree that it is kinda fun to see the yield on cost!
If you want to have more fun, why not yield on net cost? Just subtract all the dividends you’ve already received from the price you paid before calculating the yield.