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%.