Portfolio Value Update - November 2014

Market overview

 

 

 

 

 

 

 

 

 

 

November was a tough month for the markets, especially for the energy sector. Last month, I was speculating that TSX would rebound and it did advance by 600 point by mid-November, but then it pulled back by about 400 points mainly due to the oil sector. The past couple of weeks, the price of crude dropped by another $10 to close at around $65 per barrel.

I don’t want to talk about oil too much, but in my opinion, the recent drop in oil prices is just fundamentally unjustifiable. Yes, ok… the OPEC people decided to keep the current production rate at 30 m barrels of oil per day. So I decided to do a little research about how much oil we produce and consume globally. Here’s what I found out. The global oil production in 2014 is average at 91.95 mbpd vs global oil consumption of 91.38 mbpd. I do not see an oversupply of oil here. Where is the oil glut that most analyst refering to? To me those numbers are at par. What OPEC is doing is a price war. They want the small players out of the market and then the prices will go up again.

I see oil prices rebounding like a "V" shape for a few good reasons. First of all, oil is not natural gas. When natural gas prices collapsed, there was an abundance of supply and very low demand. For oil, the demand is still strong and it’s growing, maybe not at the rate as everybody was anticipating. And second, were are approaching winter season and the temperatures are going down no matter what. When temperature goes down, the energy consumption goes up. And last but not least, the job growth in the States is increasing by 200,000 per month, thus, more people are driving to work.

 

Dividend Portfolio Value

As of November 30, 2014 my dividend portfolio balance is at $18,964.35, up by $444 from a previous month.

 

Dividends

For the month of November, I received a total of $110.32 in dividends vs $97.64 for the same period a year ago. My dividend income increased by 13 % on year over year basis. My total Year-to-Date dividend income for 2014 is $1,018.75.

I reached my dividend goal of a $1,000. Additional dividends in December will be considered as a surplus.

 

 

Dividend increases

So far, no dividend increases were announced and I don't expect any increases in the 4th quarter due to the correction that we had in October and November.

 

Contributions

During the month of November, I was able to contribute a total of $1,000 to my TFSA. My objective for 2014 was to contribute $5,000 inside TFSA and I reached my goal this month.

 

The total contribution room for TFSA in 2014 is 5,500. I already invested $5,000 and the rest $500 I plan to contribute next year. If in 2015 the contribution room for TFSA stays the same, at $5,500, then I will contribute a total of $6,000 for 2015.

 

In December, I will take a break from investing and will just collect my dividends.

 

 

Transactions

RioCan Real Estate (REI.UN.TO)
I added 20 shares to my existing position at $27.00 per share. RioCan has a 5.2% dividend yield and this purchase will bring additional $2.35 per month in dividend income.

 

CT Real Estate (CRT.UN.TO)
This is a brand new position for me. I bought 45 shares at $12.19 per share. CT Reit has a 5.2% dividend yield and this purchase will bring additional $2.40 per month in dividend income.

Milestones
On November 26, my dividend portfolio surpassed $19,000 mark for the first time, closing at $19,366.20. The following day it dropped by $597.60 when oil prices collapsed. This was the worst day for me. Very soon, my portfolio should rebound and stay above $19,000 for good.

 

Market outlook

As the weather cools down for the next couple of weeks, the oil demand should pick up and drive the prices up. However, we are entering the tax loss season and there will be additional selling pressure on bear stocks.