This is the last of the four part series in which I disclose in a sneaky and mysterious manner what I’m holding in my Tax Free Trading Portfolio for 2011.  In the first part of the series, I talked about Exchange Income Corporation (the aviation/manufacturing company), the second part I mentioned Just Energy, and last week, I talked about Sun Life. This week, the last stock I bought for my 2011 portfolio is very different from the above manufacturing/ utility/ and financial industries.

I had thought about owning this stock for a bit of time, ever since I did a post on it recently.  However, I was again hesitant due to the nature of the sector and the state of the economy.  How can a company that is considered a “non-essential” part of life possibly do well?

My mind changed, however, when I paid a visit last year (whereby the economy was still wobbly and the markets were schizophrenic).  The place was absolutely packed and people were having a good time.  Money was being spent like you would not believe (not too much by me, of course… it was just an observation on my part by looking around the room).  I thought…recession, what recession?

This company did not incorporate and instead stayed on as an income trust (and I am glad I’m holding it in my TFSA of course, otherwise I would be taxed to the nines).  Because of the taxation on the company thanks to the new Specified Investment Flow-Through Trust Tax “The SIFT Tax”, the distributions have decreased from $0.11 a month per share (about 9.9% annual yield) to $0.08 a month per share (about 7.2% annual yield at recent price point).  This is the only holding in my portfolio that has actually stayed on as an income trust.  All the other ones converted to dividend paying corporations.

Recent Year end Results have been good and better than expected.  Their financial information looks solid too.

• P/E of 10.79
• Price to Book Ratio of 1.29
• Huge Gross Margins of 93 when the sector average is a measly 8.76  (I guess they get their product from Alberta on the cheap!)
• It is near the 52 week high though (hmm what isn’t?   )
• Annual yield from distributions of 7.2% paid monthly
• The main company office is based right here in Vancouver (well, actually Richmond, but same thing, right?)
• First started in North Vancouver in 1971 and now has over 100 locations all across North America
• Their commercials are very alluring and seem to stimulate your senses
• Since 2003, holds the title of One of Canada’s Top 50 Employers compiled by Aon Hewitt every year.

Alright enough beating around the bush… did you guess it?  I was very vague about it because it’s very easy to guess.

One major hint- I talked about it in the Cheap and Good Eats Section (it’s a Good Eat, and not a Cheap Eat).

If you guessed The Keg- You’re the winner!  I might treat you out to the Keg if you guessed it right (sorry, got your hopes up!).

Next time I go to the Keg, I’ll feel better ordering that glass of wine and a steak, knowing that I own a small portion of that company and am getting paid monthly for good earnings and profit.  It’s a seemingly win win situation, I tell you.  And you know I’m a fan of those.

I don’t think I would hold on to it for long term though, nor do I think I will be adding to my current position to KEG.UN.TO.  I’ll wait and see how it performs.

Readers, would you buy equity in the restaurant industry or does buying in the restaurant sector seem too risky?

Comment on this post »

As you know, I sold off my Tax Free Trading Account portfolio (remember, it’s a “souped up” TFSA) and took the money out for the house down payment.  My portfolio was up about 20% Return on investment, but 2010 was such a great year for making gains on the stock market, I’m sure most people had similar returns (20% beats the 1.5% in a regular ol’ TFSA any day- though of course there is risk involved) .  I then transferred $5000 of my non-registered money (I sold a few loser stocks there as well) into the Tax Free Trading Account.  I will have $10,000 remaining that I can put in, and I plan to put my tax refund into my TFSA and RRSP this year too.

The reason why I sold off a lot of my TFSA portfolio was also because of the changes in terms of taxation on the income trusts I was holding- they had to convert to corporations and a lot of their distributions (read= 9-11% per year given back to you) were going to be slashed big time.

I thought I would share my picks for this year and give the reason why I chose the particular investment.  This year, it was more difficult to find bargains in terms of more bang for your buck because lots of stocks were trending at their 52 week highs.  Ideally, I would like for the stocks I pick to perform well (duh, who doesn’t?) but I would be happy if it stayed “status quo” too because they will pay me some juicy dividends anyway.

(more…)

Comment on this post »

In the previous post I blabbered on about how amazing dividends are.  They really are amazing- once you start investing in them you can’t stop!  They’re like Pringles Chips.  You can’t have just one.

I didn’t realize their potential until recently, and since then, my portfolio has been lookin’ pretty fine.  I’ve recouped all of my losses since I started investing in the first place about 5 years ago (the losses are thanks to the dreaded “other investments” )(NB: the best way to learn how to invest is to do it and learn from your own experience!), and am well in the glorious green.

A few months ago, I calculated the dividend yields of all the dividend producing stocks I own.  Doing this reinforces me  NOT SELL prematurely because of the dividend yield I will get per year.  It switches my mentality from: “sell this thing and take profit” to “if it dips, then I’m picking up more”.  My goal is to be able to increase my positions on dividend yielding stock, so that I can not only reinvest it to build my portfolio further, but hopefully one day it can replace my income (or a large portion of it) and I can retire early at 35.

Wishful thinking, huh?

I wrote the % return per annum and the resultant amount in $ that I would get per year with the number of stocks I own.

Without further delay, here’s a list of my annual yield from dividends (and income trust distributions):

(more…)

Comment on this post »

In my monthly net worth updates, I categorize my assets into stocks, cash, RRSPs, TFSA,  and other, to name a few.  In this month’s net worth update,  Investing Newbie wanted to know what my “Other” investments are.

Well to answer that question, I’m going to tell you a story of how NOT to invest.  So don’t try this at home, kids.  The Other investments basically consist me flashback 4 years ago tagging along with my mom and having her introduce me to her financial advisers.  Note the plural form of financial adviser.

(more…)

Comment on this post »

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.

(more…)

Comment on this post »