Last year, in my 2009 TFSA, I held my $5000 in a principal protected HSBC mutual fund account, it is up about 6% to date so far.
For 2010, I decided to use the TFSA to shield the taxes from income trust distributions. I opened up a Questrade Tax Free Savings account (or Tax Free Trading Account, as they like to call it).
Since Investing In Canada had a great summary of what he ended up buying for his 2009 TFSA, I thought I would share what I ended up picking too.
100 shares of EIF (Exchange Industrial Income Fund). EIF is an aviation (provides airline services to people in the communities of Manitoba and Nunavut) and manufacturing (produces specialized tanks, pressure equipment, and precision metal parts in Western Canada and the US) fund pays $0.13 cents monthly so far, and it has a healthy balance sheet. For a fund that’s been around since August 2009 only, I’d say this is pretty good. It has already incorporated itself, so it’s free from all the Income Trust taxation drama. It pays about 11.6% dividends.I bought (all trading on the TSX):
- 100 shares of LIQ.UN (Liquor Stores Income Fund) owns or has significant investment in liquor stores in British Columbia and Alberta including five small pubs in British Columbia. They pay a $0.14 monthly distribution (10.7% per year) People like to get their drink on. Even in times of recession
- 100 shares of CFX.UN (Canfor Pulp Income Fund) This industry took a real good beating, but things are looking up. They recently increased their dividend from $0.01 per share to $0.05, then $0.08 per share.
- 25 shares of REF.UN (Canadian REIT) Some people say to put only 5% of your portfolio in REITs because they can be risky. I was going to choose the RIOCAN REIT, but rumours are that RIOCAN REIT may cut back on its distributions soon. RIOCAN is primarily based on commerical/ shopping area real estate, and the Canadian REIT is more diversified and has a little bit of real estate involvement in everything.
- 99 shares of YLO.UN (Yellow Pages Income Fund) (I only bought 99 shares because I was getting close to the $5000 mark lol) They are very innovative- branching from the traditional phone books, to online, and recently they announced that they’re partnering with Toshiba to have the Yellow Pages search icon embedded in the Toshiba desktop for easy searching. The distribution is about hefty 15% right now.
Because each trade only cost $4.95 I was able to buy five different things to put into my TFSA basket. Yes, Questrade is awesome that way. Otherwise, I could have spent $145 alone in commission costs with another online brokerage.
I can’t wait to see the monthly distributions flow in. Untaxed. If the TFSA were a thing, I’d kiss it right now.
This is what I ended up buying folks, don’t be a lemming and follow me off the cliff (if there is one, hopefully there’s not), do your own research.