January 7, 2008

Porfoilio Performance Update

So far my performance has been, predictably, bad.

Most of my funds are invested in Canadian fixed income as result of the sale of my previous business in 2006. I have been waiting to invest them in good businesses but did not find any until lately. So far I have picked up LOW and BAC and looking to add additional positions that provide good value.

Bank of America is down 10% from where I bought it and Lowe's Home Improvement is down another 5%. Banking and home retail are under pressure and will continue to be under pressure due to several economic factors. I will be adding to these two positions around earning announcement as I expect them to decline further and I expect to buy more in the next quarter as well.

I have reviewed RioCan REIT in an older post and deemed it as a value idea, read it here
With the market faltering RioCan came close to my entry price of $20, so I purchased an entry position @ $20.10. I have not committed any significant money to the position but I will add to it in the weeks to come as it goes lower.

My target is to have 80% allocation to equity and 20% in fixed income by the end of the year, currently my allocation is the opposite. Some areas I am looking for buys are banking, real estate (office, industrial and retail), and Canadian gas industry. I will keep you updated with new ideas as I finish my analysis.


MG said...

I like BAC and LOW very much.

I think those are both great long term holds.

Sami said...

Hi MG,

I agree: good management and sustainable business model and selling at a great price right now, what not to like.

John said...

I am headed in the opposite direction. After many years of trading stocks I have decided to be a bit more “hands off” in the future.

The portfolio I have today is complex with many different positions. On the up side it creates a lot of tax advantaged dividends since most of it is outside the RRSP and I am still in the work force at the highest marginal rate.

The “hands off” portfolio I want to evolve towards in the next few years will be

Canadian Bonds
XBB - 20%
TDB909 - 20%

Canadian Stocks
XIC - 10%
TDB900 - 10%

US Stocks
XSP - 10%
TD902 -10%

International Stocks
XIN -10%
TDB911 - 10%

Sami said...

Hi John,
I like your selection. I truly believe in ETF for hands off investing or if you do not enjoy the investment process, which I do enjoy.

I actually will include 2-3 ETF in my equity portion to cover international and emerging markets, since I do not have enough info about them to make intelligent decision making.

For the TD mutual funds did you make sure that they are not deducting high fees. some of their funds can reach up to 2-3%?

John said...

You are right about fund fees.

The TD funds I recommended above are a special version of e fund available only to self administered investors. They are a great deal with MERs of only .48%

The XIN (MER of.49%) is currency hedged and the TDB911 (MER of .48%) is not hedged.

There is no fee to trade the e fund so you can re balance often using them

By mixing TD e Funds and i Share EFTs I get the best of both worlds.