2013 Portfolio Update – May 6, 2014

updated 6 May, 2014

updated 6 May, 2014

For the sake of complete transparency, and in order to make my point that it is entirely possible to beat, on average, the performance of most products issued by the mutual fund industry, I strive to provide portfolio updates, and will continue to do so. In good years and in bad. The last 5 years have been good, in fact excellent as I have shown here.

May is the anniversary month of my original DOGS portfolio, and this year is the 12-year anniversary. It is in the first week of May that I go through the process of reviewing the TSX60 constituents, updating their dividend payout and then sorting by yield. As I’ve mentioned elsewhere, I discard income trust conversions, miners and paradoxically the first top yielding stock, then selecting the top-5 stocks based on yield.

Most years, the process goes smoothly, leaving me with a portfolio for the coming year and dividends to re-invest. These past two years I have struggled with TransAlta (TA). TransAlta has itself been struggling and has been the top-yielding issue for a number of years. Last year, throwing caution – and the rules – to the wind I re-balanced some dividends into TransAlta; this year, TransAlta is down further, has cut dividends and is now a major loser in the portfolio. So, again, this year I am choosing to roll the dice. While TransAlta is evenly balanced across the portfolio on a Cost Basis percentage, it presently only makes up 14% on a Market Value basis; my decision is to continue to hold but invest no further.

As for the rest of the portfolio, based on strengths in financials I sold off CIBC (CM) for a 28% gain, and Sun Life (SLF) for a 47% gain (cumulative, including dividends). Taking their place are Shaw Communications (SJR.B) and Rogers Communications (RCI.B). Both are paying slightly north of 4%.

And of course, in the interest of full disclosure, I offer this chart; the trajectory is in the right direction, but it certainly did not get there without some bumps along the way. Some years were down by as much as almost 10%.

updated 6 May, 2014

updated 6 May, 2014

Good luck!

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18 thoughts on “2013 Portfolio Update – May 6, 2014

  1. Pingback: Investing from within the Echo Chamber | Day Early, Dollar Short

  2. Would you mind sharing the details of your portfolio, like stock symbols, their trailing dividend yield, and annual return rate, at least for 2007-2009? I am trying to repeat your calculations using historical data from blackrock and yahoo, but getting much bigger drawdowns and smaller gains, for a CAGR of 2.68% for 2007-2014. It would be good if I could identify my error… Thanks in advance!

    • Are you applying my methodology to the 5 top-yielding issues of the TSX60, excluding income trust conversions and gold miners, for a May 2007 start point (anniversary date)?

      • I have tried with 5 and 7 issues, with approximately the same results for the CAGR. I am removing issues with symbols ending in “.UN”, or with titles containing “Gold”, “Mining”, “Mines”. The anniversary is the last business day of the previous year, e.g. 31-Dec-2006. I did not expect significant sensitivity of the CAGR to the anniversary date though, certainly not ~5 times.

    • Thanks for reading @vi; a couple of notes: 1. CAGR are generated by Quicken; the numbers are a bit more accurate than what I might generate 2. dividend yields are yield-on-cost 3. the anniversary date may not appear important in terms if returns for issues already in the portfolio, but what will make a big difference is the issue that are added/removed on a particular anniversary day. That may change on a day-to-day basis, depending on world events, etc. I’ll outline portfolio composition based on the day of rebalancing:

    • June 30, 2008
      Sold TransAlta – 14.18% CAGR
      Sold TransCanada – 12.25% CAGR
      Added to Bank of Montreal
      Bank of Montreal – 5.6%
      BCE – 5.5%
      CIBC – 6.2%
      National Bank – 3.8%
      Royal Bank – 4.4%

    • April 22, 2009
      Sold BCE – 3.17% CAGR (a twisted tale of greed and timing gone wrong)
      Bank of Montreal – 6.6%
      CIBC – 6.2%
      National Bank – 4.9%
      Royal Bank – 4.4%
      Telus – 6.4%

    • October 6, 2009
      Sold Royal Bank – 25.2% total return
      Sold National Bank – -1.07 CAGR
      Bank of Montreal – 6.6%
      BCE – 6.1%
      CIBC – 6.2%
      Telus – 6.4%
      TransAlta – 5.3%

    • May 11, 2010
      Sold Bank of Montreal – 9.15% CAGR
      Sold CIBC – 18.28% CAGR
      BCE – 6.1%
      Canadian Oil Sands – 6.9%
      Sun Life Financial – 4.7%
      Telus – 6.4%
      TransAlta – 5.3%

    • May 2, 2011
      Sold Telus – 32.39% CAGR
      Sold Canadian Oil Sands – 19.28% total return
      Added to TransAlta
      Bank of Montreal – 4.5%
      BCE – 7.8%
      Shaw Communications – 4.5%
      Sun Life Financial – 4.7%
      TransAlta – 5.4%

    • May 9, 2012
      Added to Sun Life Financial
      Bank of Montreal – 4.5%
      BCE – 8.1%
      Shaw Communications – 4.6%
      Sun Life Financial – 6.6%
      TransAlta – 5.5%

    • May 7, 2013
      Sold Shaw Communications – 10.29% CAGR
      Added to TransAlta
      Bank of Montreal – 4.7%
      BCE – 8.7%
      CIBC – 4.7%
      Sun Life Financial – 6.6%
      TransAlta – 5.8%

    • May 6, 2014
      Sold Sun Life Financial – 12.43 CAGR
      Sold CIBC – 22.38% CAGR
      Added to BCE
      Bank of Montreal – 4.8%
      BCE – 8.2%
      Rogers Communications – 4.2%
      Shaw Communications – 4.1%
      TransAlta – 3.6%

  3. Pingback: 2014 Portfolio Update – May 13, 2015 | Day Early, Dollar Short

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