Monday, November 5, 2012

Interview with Crystal

I follow Crystal on Twitter and thought my readers might enjoy and interview with her.


I am Crystal, a Canadian income focused investor. I work shift work. My hourly wage is high, yet I only work part-time hours that are in a gradual decline. I have been with my current employer for the past seven years; I enjoy my career and have no immediate plans to quit; however, I am in a position where I am less dependent on my employer, as the income generated through my investments is a sufficient amount to replace my current wages.

What prompted you to start investing? Did anything inspire you?

I began investing to compensate for a lack of job security. I continue to invest because I really enjoy it!!!

If someone was just starting out, what would you advise as a first move?

Prior to investing, I would advise a person to spend a large amount of time on research. Learn who you are as an investor and find companies that correspond with your investment style. If you are too busy or do not enjoy doing your own research, just buy the index, as there is a greater degree of risk in owning individual stocks. A hot stock tip may sound great in theory, but in practice it is very important to understand that wealth is accumulated slowly over time and there are no shortcuts.

Do have any favourite investing books?

Although I have done extensive reading on this subject matter, I cannot identify any particular book or author as my favorite. I learn something from everybody.

What sort of account are you using for stock trading? Are you using a trading account, RRSP, TFSA? Why?

I have a Canadian margin account, U.S. margin account, RRSP, and TFSA with TD Waterhouse. I contribute the maximum amounts to my TFSA and RRSP (I have a very low RRSP contribution limit available due to my employment RRSP and pension plan). I choose TD because it offers the Dividend Reinvestment Program (DRIP) for my Canadian and U.S. stocks, and my option writing limit is based on available margin rather than percentage of holdings.

How do you determine what to invest in? Does any particular site or business news program influence you?

I invest in well-established, profitable, relatively conservative Canadian or U.S. based companies. I prefer corporations having over 2 billion in market capitalization and with a history of paying regularly scheduled dividends that increase over time. Before investing I find out the dividend yield, history of dividend increases, dividend payout ratio, the amount of debt, earnings growth, and potential option premiums.

I listen to business news and search the internet for current information. I obtain a great deal of data from advisors, researchers, traders, analysts, etc. however, the information I acquire does not play an important role in my valuation of an individual stock nor do I make my investment decisions based on the views of professionals.

Where do you generally get your info on stocks you invest in? Do you use any investment tools or specific sites?

I research my stocks through perusing their websites; by listening to their conference calls and by reading their annual reports and other shareholder information

Do you use any system or program to track you stocks and options?

I set up a spreadsheet to enter the purchase and sale prices of my stocks to calculate cost. I also have an additional spreadsheet designed to estimate my projected annual dividends to keep me focused on income rather than stock appreciation. For instance, when I have X amount of dividends coming in, short-term volatility is irrelevant to achieving my objectives.

I follow my stocks through streaming quotes on my iPhone and desktop; however, I do not track my options as I am an option writer, not an option trader.

How did you get into option trading?

I began selling options to add an additional source of income to my account.

How would you categorize the type of stock you invest in? Do you invest in different stocks for stock trading compared to stock options?

I categorize the type of stocks I invest in as easy to understand, quality, conservative, dividend paying stocks. The share price of a company with strong earnings and a good balance sheet will increase over time; however I tend to focus on creating and assessing my wealth through income rather than stock appreciation.

When I invest in a company, I like to sell the put options, however, I sell options of companies that I have held in the past and have sold because they are overvalued or pay very little dividends.

Do you have any plans for the next 5, 10 years?

No, I'm not a goal setter. I don't even make plans for the next 5 or 10 minutes

Did the 2008/2009 crash affect you? Did you change anything about how you were investing because of it?

I began investing on my own in mid 2008; therefore, the crash had more of an impact on my attitude towards investing than it did to the balance of my accounts. I had experienced previous losses during good markets as the result of costly mistakes from financial planners.

Rather than changing how I invest, I decided to change my attitude towards investing. I began to focus more on patient long-term growth and short-term dividend income and ignore the volatility of the market.

Do you mind saying what stocks you are invested in? A lot I see on your tweets are dividend paying stock. Are all your stocks dividend payers?

I only invest in dividend paying companies.

My present holdings are:

Canadian Companies:

Baytex Energy (BTE); Canadian National Railway (CNR); Crescent Point Energy (CPG); Cenovus Energy (CVE); Enbridge (ENB); Keyera Corp (KEY); Pembina Pipeline (PPL); Toronto Dominion Bank (TD); and Tim Hortons (THI).

US Companies:

Colgate-Palmolive (CL); General Mills (GIS); Johnson & Johnson (JNJ); McDonald's (MCD); Pepsico (PEP); and Exxon Mobil (XOM).


Thank you for taking the time to interview me as I enjoy exchanging ideas with other investors.

You may follow me on Twitter@nachoswithsalsa. I discuss my investments, post my trades, and disclose my income received from dividends and option premiums.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.

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