Sticking with My Core Portfolio in Tough Times

Just a short post on what I have been doing with my portfolio during the latest carnage in the markets. I've made lots of changes.

Everyone has an opinion on what you should have or own in your portfolio. I'm no different and I'm no investing guru.

What I am is retired now so trying to protect money invested is at the core of my investment thesis. Also with that comes income generating investments. I firmly believe as a retiree you need to be invested in income producing stocks.

This has to be the goal. The core of our retirement portfolio is invested in dividend growth stocks that produce this income. 

I did a lot of buying and selling during the October pullback only to see markets retreat a further 1000 points on Monday and Tuesday this week. Here we are on American Thanksgiving and wondering if all that buying and selling is actually going to turn into a Santa Claus rally.

I'm out of cash and shot my load last week adding to existing positions.,s I'm done for the year.

What I Sold to Buy Stocks

My Wife's LIRA

I dumped her MAW104. When I heard the news it was looking for a buyer, I decided to sell all units. This mutual fund was being held in my wife's LIRA. I decided to turn those MF units into holdings of CP, CNR, TD, BNS, RY, FTS, CU, EMA, TRP and ENB.

As you can see her core is now banks, utilities, pipelines and rail stocks. Her Mawer fund was costing 1% so we are now free of that monthly cost. It was not performing that well during these daily pullbacks as the bond funds were of no protection. Bonds are not safe, it's all jargon and bullshit. You don't need them. They lose value in a rising interest rate environment and the monthly distributions will never keep up with capital erosion. How is that safe? It's just spin to get you to buy into the balanced, diversified portfolio theory. Build your own portfolio and let it work it's long term magic.

Her RRSP

We still had a small position in XAW so I sold it and divided it up the cash and bought Royal Bank and BNS. We are in the process of moving her LIRA (in kind) to her RRSP. We'll see how and at what cost that works out to. Fortunately her LIRA is small enough that she has the RRSP room to make this tax efficient. She also owns all the same stocks in both accounts so this should super charge those existing stocks.

My RRSP

I sold my VFV which is a low cost S&P 500 ETF. I used the money to buy FTS and BNS. Yes boring stocks but dividend payers to supplement my dividend income.

All of these accounts now have a very safe and respectable 4% yield.

Growth Stocks

Now for the sexy stuff. FB, AMZN, BRK.B all down significantly since purchase. I would never sell them because I believe in their long term future to provide a little torque to our dividend stocks.

Our holdings in MTY and COST are still in the green even after triple digit losses on Monday and Tuesday of this week. I like food stocks and Costco is just one of the best food/retailers on the planet. I hear it all the time, "I love shopping at Costco but it's too expensive an investment". I just don't look at it like a trader. You pay up and then hold. It becomes cheaper the longer you hold this company.They just generate tons of free cash and make money.

The only tech stock I hold is CSU. Another great Canadian success story in the tech space. I'm basically flat since purchasing this stock a few months ago. Growth stocks have been hammered in the last month. I believe if you have any cash at all there are a lot of great companies now on sale. Some are 25% cheaper than they were at the beginning of October. This is a Black Friday stock sale going on right now.

Final Thoughts

The core of all portfolios is very concentrated in the 5 sectors of banks, utilities, pipelines, rails and telecomms. I own no bonds, preferred shares, mutual funds or ETFs. We are 100% stocks. Not recommended for everyone it's just what I do and doing what I do means being different.

You have to swim upstream and rid your cluttered mind of all modern portfolio theory. Fuck diversification, buy quality companies. Bonds are and have been a shitty investment. Funds cost money and you save a lot doing it yourself. Take a look at any chart on pref share funds/etfs. They have fallen of a cliff and barely grow your money at all. Why do people buy this shit?

Advisors just come at you with jargon and BS financial terms to justify taking your money while they rub your balls. If you don't know what to do go sit in the library and study. This will save your wealth over time and in retirement.

Investing within the confines of modern portfolio theory just means you love the comfort of what the industry is selling. I question every expert and everything investing. To make your own money grow you have to invest in quality companies. Individual stocks are safer than the whole fucken industry with their complex products.

I buy stocks for their future cash flow because if you buy quality stocks that cash flow only increases over time. Is TD bank going to lose money or go under? No I highly doubt it and think of the increasing dividend payments you'll receive over the next 10 years. That should be why you invest in stocks.

The goal is to have a growing income in retirement and NOT turn into a coupon clipping, penny pinching pensioner.

NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT!

Looking for Saving Ideas So You Can Invest? 

If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

New Book and Recommended Reading

This is the second edition of Robin Speziale's book 'Capital Compounders'. I have just received a review e-book version that I am currently reading and will have a review posted here and on Amazon in the coming weeks.

Robin invests in growth stocks and is the best selling author of 'Market Masters'

Robin has been saving, investing, and building his portfolio since the age of 18. Now, 10 years later, at the age of 28, he’s amassed a $225,000 stock portfolio. He lives in Toronto.

Besides following his blog he has a Capital Compounders Facebook Page well worth joining for learning where to better invest your capital.