Stock Purchases

I put more money into my TFSA in January 2016. I am putting the maximum I can into this account. I put in an extra $4500 because the Tories increased the maximum for TSFAs in 2015 to $10,000. The Liberals have now lowered the maximum to $5500 in 2016. Therefore I put in $10,000 recently into this account. Also, when I move money from my RRSP and RIF accounts in December, there is some money to buy more shares in stocks and therefore increase my dividend income from my trading account.

For my TFSA account, I purchased Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF). I had $11,148 in my TFSA to buy stock. GS is relatively below the median and it gives out special dividends all the time. I also wanted to try out a high yield, low capital gain stock.

I have recently reviewed Metro Inc. I bought Metro in 2004. I have earned 19.92% per year on this stock. Of this 18.17% per year is capital gain and 1.75% per year in dividends. When I bought this stock, I was earning 1.87% in dividend yield. Today, I am earning 7.92% on my original stock price.

However, of the money I earned, 92.6% is in capital gain and 7.4% is in dividends. This means unless I sell stock, I only get some 7.4% of the return to spend.

When I looked at GS in October 2015, the 5 and 10 year total return was 9.84% and 8.36% per year with capital gains at 1.83% and 2.09% per year and with dividends at 8.02% and 6.26% per year. On this stock you would get to keep a lot more of the return in dividends to spend.

Of course the market has gone down since I have made my purchase of GS. GS was at $19.73 when I bought it and I noticed it was $16.55 today. When I last looked at Metro, the stock price was $39.37. Today its price is $39.70. The stock market has been treading down recently. Metro has done better than the TSX and GS has done worse.

For my trading account, I will be purchasing more Manulife Financial Corp. (TSX-MFC, NYSE-MFC) stock. This is a stock I already have in this account. The dividend is decent at just over 3%. The stock is considered cheap using dividend yield testing and the historical median dividend yield. I already own this stock in this account.

I had a bit more money in my Trading Account so I bought another 100 shares of Barrack Gold Corp (TSX-ABX, NYSE-ABX). Resources will not stay down forever.

On my other blog I wrote yesterday about Bank of Nova Scotia (TSX-BNS, NYSE-BNS)...learn more. Tomorrow, I will write about National Bank of Canada (TSX-NA, OTC-NTIOF)... learn more.

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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