The Frugal Canadian

A frugal spender seeks to find new ways to save money and increase her net worth.

Thursday, April 06, 2006

1st Quarter 2006 Report Card

My portfolio had a return of $1,039 in the first quarter of 2006 or an annualized return of 7.48%. This is a combination of price appreciation of $811 and dividends of $227.

Holdings in natural gas dropped nearly $500 this quarter. It still has a good dividend yield 3.7% and the drop in market value is largely a reversal of prior period gains. I continue to reinvest the dividends and I am sitting on a sizeable capital gain since I bought the stock. I believe it is still a good long term hold but will monitor it closely.

My telecom holding remains largely unchanged, however a record dividend has been announced and I will receive the annual distribution in Q2. The dividend yield of 4.75% was the primary reason I originally purchased the stock. The stock is sitting at a loss but the dividend will bring it back up to it's original cost base(essentially I'll have a 0% return on the year for this one)

The real estate trust unit continues to perform well. I receive one additional unit per month from reinvesting distributions and while I had expected the price to remain stable since I bought it, the trust has also had some decent price appreciation.

I have a high allocation to cash and equivalents which is sacrificing my overall return. Unfortunately this is a necessity to meet some liquidity needs over the next year. I will continue to keep it invested in a 3% interest savings account.

I'm looking to make a small investment($3,000) into international equity. In most of the funds I've seen so far, Japan seems to have a heavier weight than I would like. I'd specifically like to find a ETF or index fund investing a high percentage in China.


At 8:33 PM, Blogger Perpetual Trader said...

Do you know of a canadian broker that allows dividends to be re-invested with no fee? Your post says that your trust unit pays one additional unit per month which is reinvested. Does your brokage account automatically re-invest or the unit itself?


BTW: I enjoy your blog, keep it up; it is always nice to see some Canadian content :)

At 7:03 PM, Blogger The Frugal Canadian said...

I use TDWaterhouse Discount Brokerage and for eligible stocks they will reinvest distributions for no fee. I know that BMO will do the same, and assume the other big banks will also have the DRIPS available.

There are a few limitations
- You can't get fractional shares.
- Not all stocks qualify. Waterhouse has a list of all stocks/units that partake in DRIPS
- You can't sign up for DRIPs online. You have to phone them to sign up
- You must do it for each stock that is eligible. You can't simply tell them to sign you up for each stock that is eligible in trading account. Each time you make a purchase you have to notify them that you want to re-invest the distributions. This is annoying since if you place a trade online, you still have to pick up the phone and call them to sign up for the DRIP. It definitely takes away the convenience of making an online trade in the first place


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