I had to sell stocks in my registered accounts to ensure that I have enough money there to cover this year’s withdrawal and withdrawals for the next few years. The market is relatively high and so it is not a bad time to sell. I basically look for stocks with the lowest dividend yield and sell them.
This year I sold Canadian Tire (TSX-CTC.A) and Saputo (TSX-SAP). According to the Globe and Mail, the dividend yield on Canadian Tire is 1.657% and on Saputo is 1.576%. I am putting what money I do not need this year from my registered accounts in 1 year GIC.
I used to have the balance in an MMF, but TD’s Fixed Income Desk told me that TD has a TD Investment Savings Account (TDB8150) with an interest rate of 1.2%. This rate is, of course, better than the MMF of around 0.32%.
I have 3 to 5 years of withdrawals required from my registered account in cash or near cash. Bear markets can last up to 3 years, so it is wise to have at least 3 years of cash in an RRSP account you will be withdrawing funds from. To have 4 or 5 years of cash gives you a margin of safety.
On my other blog I am today writing about Northland Power Inc. (TSX-NPI, OTC-NPIFF) ... continue...
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