Wednesday, September 2, 2015

Starting Out Investing

What I want to point out is one possible method of funding a portfolio. This is the method I have used recently. When I first started to invest I paid monthly for a Canadian Savings Bond, cash it in when it was due in November of the following year and used that money to buy stocks. I repeated this process a number of times. It was a way of saving to buy stocks.

After I stopped working in 1999, I did not reinvest any money; I just lived on my dividends. However, in 2003 I decided to start reinvesting some of my dividend income. The way I did it was to use my $10,000 line of credit. When I had enough money in my line of credit to purchase something I did so. I made a payment to my line of credit above the interest due each month.

The amount I paid each month varied from $200 to my current monthly payments of $400 a month. The following table shows by year the amount I paid in interest, the payments I made to my line of credit and the average monthly payment I made each year. The last line for 2015 shows what I have done to date.

Year Interest Payments Av Mthly
2003 $410.35 $2,735.54 $227.96
2004 $265.42 $3,024.00 $252.00
2005 $325.05 $2,979.00 $248.25
2006 $573.95 $3,600.00 $300.00
2007 $487.89 $3,502.00 $291.83
2008 $220.62 $3,600.00 $300.00
2009 $174.27 $2,400.00 $200.00
2010 $322.37 $5,479.46 $456.62
2011 $394.65 $4,000.00 $333.33
2012 $387.04 $4,800.00 $400.00
2013 $376.80 $4,800.00 $400.00
2014 $372.51 $4,800.00 $400.00
2015 $207.42 $3,200.00 $400.00

What I bought is shown below. Note that this is not a balance portfolio. I was adding to an existing portfolio. In 2006 I sold Summit REIT because the company was being brought out. I did not want the new company's stock. I also sold Ensign Energy in 2014 because I liked Mullen Group better.

When I did not buy board lots (100 shares) under a stock it is because only part of my purchase was funded from my Line of Credit. Funding could come from money from my RRSP account, extra money in my emergency fund, extra dividends or sales of other stock.

Name Symbol Date Ln of Cr Fr Sales Shares
Summit REIT SMU.UN 5-Feb-03 $9,095.00 600
Enbridge Inc. ENB 12-Jul-05 $7,183.00 200
Leon' Furniture LNF 19-Jun-06 $3,000.00 68
Summit REIT SMU.UN 26-Sep-06 600
CDN Real Estate REF.UN 26-Sep-06 $17,931.90 680
Atlas Gas ALA 22-May-09 $4,806.99 300
Atlas Gas ALA 5-Nov-09 $5,000.00 274
Manulife Financial Corp MFC 8-Oct-10 $1,900.00 151
Canadian Tire Corp CTC.A 29-Dec-10 $3,359.98 50
TECSYS TCS 23-Feb-11 $950.00 492
AG Growth Intl. Inc. AFN 23-Dec-11 $2,500.00 67
SNC-Lavalin SNC 25-May-12 $2,180.99 55
CDN Natural Resources CNQ 10-May-13 $3,260.99 100
Ensign Energy ESI 6-Jun-13 $1,500.00 91
Leon' Furniture LNF 10-Dec-13 $2,243.00 166
RioCan REIT REI.UN 2-Oct-14 $2,569.99 100
Ensign Energy ESI 22-Dec-14 91
Mullen Group Ltd. MTL 22-Dec-14 $939.73 47
Mullen Group Ltd. MTL 22-Dec-14 $1,321.00 66
Saputo Inc SAP 17-Jul-15 $2,979.99 100

See the full spreadsheet here. Again, please note that this mini portfolio is not a balanced one. I was buying more stocks for my trading account and I often, but not always, bought more stock of what I already owned.

In a second post I will talk about how this portfolio did.

On my other blog I am today writing about Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) ... continue...

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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