Feb 062018
 

Investments for the New Year

It has not been a great start for Canadian investors. The TSX Composite was down about 2% in January. Cryptos saw their worst month yet. And bond prices have fallen due to soaring yields. But on the bright side, the economy is improving as the labour market grows stronger and inflation is picking up. The U.S. stock market (S&P 500 index) was higher by 5.6%, making it the best performing January since 1997. Yay! 🙂

The TFSA contribution room is another $5,500 this year. So in January I sold a few thousand dollars worth of cryptocurrencies to fund my TFSA and added the following investments.

  • Parkland Fuel Corp (PKI.TO)
  • Automotive Properties REIT (APR.UN)
  • BMO Long Corp Bond ETF (ZLC.TO)

Parkland Fuel delivers lubricants and other petroleum products to motorists, businesses, consumers and wholesale customers. It supports a network of over 1,070 retail gas stations in Canada. It’s not a cheap company, but it should have good growth over the next few years.

Automotive Properties is a real estate investment trusts that focuses on buying and managing automotive dealerships, which is a good business to be in. It recently bought a Mazda facility. The REIT pays a fantastic yield equal to roughly 7.5%/year at a payout ratio lower than 60%. So even with no capital appreciation investors can still earn some decent income. 🙂 As long as auto sales remain stable, this investment will deliver.

BMO’s corp bond ETF is good for long term bond exposure. I explained why I like this particular ETF in my post last month on bond funds.

I also deposited some money into my Lending Loop account. Overall January has been a surprisingly fruitful month.

 

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $800
  • Freelance = $900
  • Dividends = $700
  • Interest = $1,000
  • Trading income = $3,000
*Discretionary Spending:
  • Fun = $600
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,171,900 total (+13,000)
  • Cash = $2,900 (-7,600)
  • Canadian stocks = $170,500 (+2300)
  • U.S. stocks = $112,700 (+5700)
  • U.K. stocks = $22,200 (+800)
  • Retirement = $89,900 (-1400)
  • Mortgage Funds = $32,200
  • P2P Lending = $30,400 (+8200)
  • Home = $275,000 (+5000) Updating this value once a year to keep up with inflation.
  • Farms = $436,000
  • Debts: = $457,800 total (-4,500)
  • Mortgage = $180,200 (-400)
  • Farm Loans = $185,300 (-500)
  • Margin Loans = $56,500 (-1000)
  • TD Line of Credit = $4,500  (-1000)
  • CIBC Line of Credit = $16,500 (-1500)
  • HELOC = $14,800 (-100)

*Total Net Worth = $714,100 (+$17,500 / +2.5%)
All numbers above are in $CDN. 

$17,500 net worth increase is not a bad start to the year. 😀

Higher interest rates cost borrowers more, but they’re also very beneficial for investors who do the lending. 😉 As rates have increased over the last year I’ve noticed my passive income from debt investments rise. In January I earned about $1,000 from interest income alone; a new record for me. $230 came from my Lending Loop portfolio, $370 from mortgage investment corporations, and $400 from two individual high yield bonds in the energy sector. As long as we have a balanced portfolio there’s nothing to worry about.

 

 

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Random Useless Fact

Jan 092018
 

Summary of Financial Market Returns

2017 was a great year for investors, particular for those with long exposure to emerging markets overseas. 🙂 Nearly every asset class experienced positive returns. The best performing one was cryptocurrencies. It grew from a market capitalization of $20 billion to $800 billion in the last 12 months. To put that into perspective that’s about 1% of the global stock market which is valued at roughly $80 trillion.

North American Markets in 2017

  • Canadian dollar stronger by 7.0%
    (This means more purchasing power and cheaper imports, such as produce from California. Yay!)
  • U.S. dollar weaker by 6.6%
    (U.S. investments are on sale.)
  • The average CAD/USD exchange rate was 0.77
    (This may be important for tax filing purposes if you traded U.S. securities.)
  • Canadian S&P/TSX stock index total return = 9.1%
    (6% from price appreciation + 3.1% from dividends.)
  • S&P 500 U.S. stock index total return = 21.8%
    (Amazing! But the Nasdaq index which contains technology stocks was up 30%.)
  • Canadian Aggregate bond index ETF (ZAG) total return = 3.0%
    (Interest rates are still very low.)

Foreign Markets in 2017

The MSCI group contains thousands of stocks from 24 developed markets around the world. Data below courtesy of Yardeni Research.

  • Average change across all MSCI countries in 2017 = 17.5%. Up from 8.2% in 2016.
  • EMU refers to the European markets specifically.

In December I sold some Bitcoin and Litecoin to pay down some of my debt. I’ve saved up a cash cushion of $10,000 because I intend to pick up some new stocks over the next few weeks.

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $1100
  • Freelance = $1200
  • Dividends = $900
  • Interest = $300
  • Trading income = $2,500
*Discretionary Spending:
  • Fun = $500
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,158,900 total (+8,200)
  • Cash = $10,500 (+2000)
  • Canadian stocks = $168,200 (+4000)
  • U.S. stocks = $107,000 (+1200)
  • U.K. stocks = $21,400 (+400)
  • Retirement = $91,300 (+200)
  • Mortgage Funds = $32,200 (+200)
  • P2P Lending = $22,200 (+200)
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $462,300 total (-6,400)
  • Mortgage = $180,600 (-300)
  • Farm Loans = $185,800 (-500)
  • Margin Loans = $57,500 (-1400)
  • TD Line of Credit = $5,500  (-1200)
  • CIBC Line of Credit = $18,000 (-3000)
  • HELOC = $14,900

*Total Net Worth = $696,600 (+$14,600 / +2.1%)
All numbers above are in $CDN. 

My net worth has increased $126K year over year. Not too shabby. 🙂 This gain was mostly thanks to the Canadian and U.S. stock markets reaching record highs.

Many experts suggest to rebalance one’s portfolio once a year to ensure it still matches up with long term goals. Stocks outperformed bonds last year. So here is what my asset allocation currently looks like.

My liquid investment portfolio contains 82% equities, and 18% fixed income, while a year ago it was at 90% and 10% respectively. I have increased my fixed income exposure because I’m closer to retiring. Yay.

As we head into 2018 I plan to reduce my debt while continuing to max out my tax advantaged investment accounts. By the end of the year I aim to be collecting $18,000 in forward dividend and interest income. 🙂 My liquid asset allocation goal is to be somewhere between 75% to 80% equities, and the rest in fixed income.

My 2018 watchlist includes the corporate bond ETF (TSE:ZCM), Parkland Fuel Corp (TSE:PKI), North American Preferred Shares ETF (TSE:XPF), and more Lending Loop loans. 😀

 

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Random Useless Fact

Jan 022018
 

Hello friends. It’s a new year. 😀 My investment strategy for 2017 was simple; to buy dividend growth stocks and alternative investments. Dividend stocks and alternative assets tend to grow in bull markets but also hold up well in recessions. The plan is to earn respectable returns while reducing risk to the downside. Here are my 2017 results.

Average return on investable assets = 18.9%

Overall I am quite thrilled with this outcome. 🙂 The broad Canadian stock market index (S&P/TSX Composite) returned about 9% in 2017. I remain convinced that a dividend based investment strategy works better than index funds.

Another variable that worked to my advantage is geographical diversification. Most equity markets in foreign countries performed extremely well. For example, the S&P 500 index in the U.S. gained 20%. Holding U.S. and European stocks helped me a lot this year.

The Best of 2017

Liquid’s Top 10 Best performing stocks of the year:

  1. Canopy Growth Corp (WEED) +213%
  2. Match Group Inc (MTCH) +82%
  3. Caterpillar (CAT) +64%
  4. Avigilon Corp (AVO) +63%
  5. Dollarama (DOL) +59%
  6. Amazon.com (AMZN) +58%
  7. Premium Brands Holdings (PBH) +55%
  8. Deere and Co (DE) +55%
  9. Blackberry (BB) +54%
  10. Netflix (NFLX) +53%

The Worst of 2017

Liquid’s Top 10 Worst performing stocks of the year:

  1. Crescent Point Energy (CPG) -45%
  2. High Liner Foods (HLF) -23%
  3. Cineplex (CGX) -22%
  4. Cameco Corp (CCO) -14%
  5. Viacom (VIAB) -10%
  6. Halliburton (HAL) -8%
  7. Keyera Corp (KEY) -7%
  8. Boardwalk REIT (BEI.UN) -7%
  9. Target Corp (TGT) -6%
  10. Goldcorp (G) -5%

We can’t win them all. But as long as we get it right most of the time then everything will work out eventually. 🙂

 

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2017 Investment Breakdown

All returns mentioned below are internal rate of returns (IRR) unless otherwise stated.

TD Portfolio 
Annual return = 16.3%
Net Asset Value = $190K

This includes my entire RRSP portfolio, most of my TFSA and a small cash account all held within TD Direct Investing. The combined return over the last 12 months was 16.28%.

I hold about 15 individual securities in my TD TFSA, and another 30 in my RRSP account. If you are interested to see exactly what they are I’ve listed all the stocks on my portfolio page. 😀

Note: Past performance doesn’t guarantee future results and readers should not take any stocks I buy as recommendations.

 

Interactive Brokers – Non Registered Portfolio
Annual return = 25.3%
Net Asset Value = $158K

This is where I have my margin account. I hold Canadian, U.S. and U.K. securities in here – mostly preferred stocks and dividend stocks due to the preferential tax treatment of their returns. One reason the return is so high in this portfolio is because I am using leverage (borrowing money to invest.)

Continue reading »

Dec 052017
 

Yet another month of record highs in the financial markets. I hope everyone had a great November. 🙂  In terms of changes to my balance sheet I’ve added 100 shares of Enbridge stock to my portfolio, creating more passive income for future months. Part of this purchase was financed from a margin loan at 2.3% with IB. Borrowing money at low interest rates to invest in long term appreciating assets was how many people became millionaires in the past.

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $700
  • Freelance = $800
  • Dividends = $700
  • Interest = $400
*Discretionary Spending:
  • Fun = $400
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,150,700 total (+14,300)
  • Cash = $8,500 (+700)
  • Canadian stocks = $164,200 (+7300)
  • U.S. stocks = $105,800 (+4000)
  • U.K. stocks = $21,100 (unch)
  • RRSP = $91,100 (+1900)
  • Mortgage Funds = $32,000 (+100)
  • P2P Lending = $22,000 (+300)
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $468,700 total (-2,100)
  • Mortgage = $180,900 (-400)
  • Farm Loans = $186,300 (-500)
  • Margin Loans = $58,900 (+1200)
  • TD Line of Credit = $6,700  (-1300)
  • CIBC Line of Credit = $21,000 (-1000)
  • HELOC = $14,900 (-100)

*Total Net Worth = $682,000 (+$16,400 / +2.2%)
All numbers above are in $CDN. 

I’ve been trying to save enough money over the last few months to invest another $8,000 into my Lending Loop account by the end of the year. I’m also currently looking for a new job to increase my cash flow. We’ll see how that goes. 🙂

 

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Random Useless Fact

At any given time, about 174 quadrillion watts of the sun’s energy is hitting the earth.

 

Nov 012017
 

This was one of the best months of the year in terms of investment gains. The stronger U.S. dollar and farmland rent income were very helpful for me. Furthermore, Amazon.com reported its financials last week and the results were stronger than expected. AMZN stock shot up 13% that day. Hurray! 😀

Check out the stock market performance since August below. The gains are incredible for just 3 months. 🙂 Dow Jones is up 6.79%, S&P/TSX Composite is up 5.82%, and Nasdaq is up 5.98%. It’s a good time to be long in stocks. 🙂

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $700
  • Freelance = $1000
  • Dividends = $900
  • Interest = $800
  • Rent = $4700
*Discretionary Spending:
  • Fun = $400
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,136,400 total (+14,700)
  • Cash = $7,800 (+4200)
  • Canadian stocks = $156,900 (+5200)
  • U.S. stocks = $101,800 (+7900)
  • U.K. stocks = $21,100 (+900)
  • RRSP = $89,200 (+5300)
  • Mortgage Funds = $31,900 (+600)
  • Peer-to-Peer Lending = $21,700 (+200)
  • SolarShare Bonds = $0 (-9600)
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $470,800 total (-3,900)
  • Mortgage = $181,300 (-400)
  • Farm Loans = $186,800 (-500)
  • Margin Loans = $57,700 (+100)
  • TD Line of Credit = $8,000  (-1400)
  • CIBC Line of Credit = $22,000 (-1000)
  • HELOC = $15,000 (-700)

*Total Net Worth = $665,600 (+$18,600 / +2.9%)
All numbers above are in $CDN. 

Last month I mentioned my year end goal was to have a net worth of $675,000. There are two more months to go. I think I can do it. 🙂 I have decided to remove my Solarshare bonds from my asset list to simplify my net worth calculation. Similar to my Ethereum holdings, Solarshare bonds will no longer be in my monthly update going forward.

 

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Random Useless Fact