Finally!! I was waiting for an 8000$ CAN transfer to buy stocks. It took forever but it’s finally been credited today in my brokerage account.
There’s a lot of volatility in the market right now and hence a lot of opportunities too. I’ve got many stocks on my mind but they did not react equally to the recent volatility.
Anyway I was craving to make a purchase and I couldn’t resist adding to my recent EMR purchase. They recently announced the spinoff of a lagging business they own to turn themselves to better growth opportunities. Uncertainty always brings opportunities to the believers.
I’m one of them. I believe Emerson is a strong company and I’ve decided to add 16 shares to my actual position, adding 30$ US to my dividend income along the way.
This brings my forward dividend income to 1503,73$ CAN per year (it fluctuates due to US/CAN exchange rate that I have decided to take into account recently). I’ve reached 10% of my goal in less than 2 years, not bad!
I still have 7000$ CAN to invest in US dividend stocks and I’ll probably save another 2-5k from now till the end of 2015 but I’ll probably invest most of my future savings in the Canadian economy for a while as I see a lot more value there with current market conditions and with the prohibitive exchange rate, plus I also want to take advantage of my TFSA account who can compound tax free forever. Unfortunately I can’t hold any US equity in that account as IRS doesn’t recognize it in the tax treaty we have with them and it would be stupid to hold US dividend growth stocks in it because or that.
What do you think about the Network Power spinoff? Do you see value in Emerson at such a price?
Stephen Hodgson
Hi Allan –
It really hurts to buy US stocks with our dollar right now. I’m trying to avoid it also, but the dividends are coming in nicely once the exchange happen so that is a bonus. I suspect you are using the RRSP for your US holdings (since they get taxed pretty hard, right?). I’m with you on the TFSA – I’m trying to use it more for any UK domiciled stocks and of course Canadian stocks but the allure of the RRSP kickback and US stocks is so hard to avoid. But given our dollar being so beat up, it’s probably best to start avoiding US stocks a little bit.. but with that said I picked up Apple last week around $120. Can’t resist!!
Allan
Hi Stephen, I hear you my friend but I had 8000$ waiting in my RRSP and I’ve carefully chosen stocks near their 52 weeks low and who had already dipped by more than 10-15%. Yesterday I bought WPC and OHI, two reits down more than 15% and who yield 6,1 % and 6,4%. For the rest of the year I’ll probably invest in Canada but then again… we’re investing for the long run and an exchange rate of 1,3 is still not that compared to what we’ve seen in the past. We’ve been stuck with a lot higher rates for a long time in the nineties and at the beginning of the years 2000. I think that 1,25-1,30 is still acceptable but it definitely add some risk. But then again, not investing in the US is taking some risk too… the risk of not benefiting of the greatest companies in the world! I don’t think I’ll care much 20 years down the road to have paid 1,14 or 1,29 for great stocks paying growing dividends and compounding tax free in my RRSP for decades. š
Did you say that you were holding UK stocks in your TFSA? Can we get our dividend tax free in that account like with Canadian stock? If it’s the case it’ll open me new opportunities I haven’t though of.
Cheers,
Stephen Hodgson
No, I haven’t yet but planning to for my wifes TFSA. As far as I can tell, UK domiciled stocks don’t have withholding taxes (not sure if that’s the case for all?) One I really want is UL, since it fits that description. And by the same token, DEO should also. So those are two beauties that should be able to sit in your TFSA with no withholding. Same with GSK, BP, RDS.B. I saw a list from another Canadian blogger that was keeping track of companies suitable for this. Gives the TFSA a bit of a diversification edge! With that said, I could be wrong, which if I am, is very disappointing!!
http://www.dividendmantra.com/2014/11/considering-foreign-domiciled-dividend-growth-stocks/
Allan
I’ll have to check that out… that would be great and add a new dimension to all of this. I’d love to receive dividends in pounds! š
Get Rich Brothers
Allan,
Glad to see your money finally settled in your account! The volatility has been interesting lately and the one stock that seems to really be facing headwinds is PJC.A. Their share price has been decimated through the first half of this year. I’m interested to know what you think of it at this point in time.
– Ryan from GRB
Get Rich Brothers recently posted…2015 Mid-Year Review: Part I
Allan
Hi Ryan, PJC has been hit pretty hard indeed. I already told you that I was expecting some uncertainty due to recent governmental decisions. I guess that’s where we are now. To be honest I haven’t taken the time yet to study the potential impact on the company. Other new regulations are to be expected soon too, some that might help the industry and others that might not. Here in Quebec they are talking about giving extended power to pharmacists who could diagnosize and prescribe some type of drugs in some specific situations… currently we need a doctor to do that. This is potential future income for them since they have been cut by 134$ millions or something recently. But they are also discussing about forcing doctors to prescribe generic drugs if they exist. This could be great too as Jean-Coutu owns a generic drug brand and manufacture but… I think that in Ontario or another province, they recently forbid pharmacists to also be owners of drug manufactures… So time will tell but I expect a lot of volatility with that title for a while. What’s your point of view?
Allan
Humm what I wanted to say in fact is that I don’t think it’s a one time event like giving the wrong pill to 10 persons who would have died. This wouldn’t have changed the bottom line of the company. It’s something more deep that’s going to touch the whole industry… it’s new governement regulation. So I guess the uncertainty is greater…
DivHut
Nice pick up of EMR. The industrial names have been quite popular in the last month. We have seen great value, price and yield from many solid companies like EMR, DOV and CAT to name a few. Thanks for sharing.
DivHut recently posted…Recent Stock Purchase October 2015
Allan
Hi Keith,
Yep, I bought a lot of EMR recently and would buy even more if I could but I have no capital left for now.
I bought some other stocks recently too but I have not updated my blog in a while since I have decided to focus on the french version of this blog which is FaisCommeLesRiches.com. It’s too time consuming to update the two versions…
EMR seems to be a good stock for the long run even though it is facing some difficulties right now.
Keep investing my friend!