Because I am taking money out of my RRSP and RRIF accounts, I like to have cash equal to 3 to 5 years of withdrawals in my account. Since I am taking money from these accounts each year I have to sell some stock to raise more money. I generally do this in April or May, but this year I have just sold stock to raise the cash in these accounts. It is currently hard to tell what the market is going to do so I rather be safe than sorry.
Once these transactions go through, I will buy some GICs with the money. Interest rates are currently very low and I no longer like to put my money into MMF Funds. To provide enough money for withdrawals over the next 3 to 5 years I have cash or near cash of 12% to 13% in these accounts. The near cash are short term GICs and Investment Savings accounts.
How I decide what stocks to sell is my dividend yield. I am selling off stocks with the lowest dividend yield. This year I am selling Saputo Inc. (TSX-SAP) and Richelieu Hardware (TSX-RCH) because of their low dividend yields. Saputo currently has a dividend yield of 1.45% and Richelieu currently has a dividend yield of 1.04%. I also sold off a small amount Manitoba Telecom Services Inc. (TSX-MBT) as this is a stock I no longer wish to hold.
On my other blog I am today writing about Bombardier Inc. (TSX-BBD.B, OTC- BDRAF) ... continue...
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