Dividend Portfolio Update - January 2016

Hello everybody. Another month passed by and it’s time for my dividend portfolio value update. January was a very volatile month due to oil prices jumping up and down. There a lot of rumours that oil production will be cut and what not, but until it happens, it’s just noise. Oil prices will remain volatile until we see a concrete production cuts from OPEC and non-OPEC countries. We will see some consolidation in the oil and gas industry. Many small caps will go bankrupt and many will be scooped up.

Dividend Portfolio Value

By the end of January 31, 2016, my dividend portfolio balance was at 24,315.17. This is probably the highest level since the beginning of the year. As you can see in the chart below, TSX Composite was in a free fall for the first three weeks and then rebounded sharply.

Dividends

Dividend income is a passive income for which I don’t have to work for. In January, I received a total of $172.34 in dividends vs $107.61 for the same period a year ago. That's an increase of $64.73 or 60% on year-over-year basis. My total Year-to-Date dividend income for 2016 is $172.34. Based on my forecast I should get around $2,000 in dividends in 2016. It doesn't sound like a big amount but it’s growing every year.

Contributions

In January, I added $800 of fresh capital to my TFSA account. As many of you have heard, the TFSA contribution limit for 2016 was rolled back to $5,500 per year. But since I still have contribution room from previous years, I will continue to contribute $800 per month until I reach my maximum contribution limit.

My Investment Account (Tax Free Savings Account)

My portfolio consists of 25 Canadian dividend paying stocks. Most of my stocks pay dividends on monthly basis. This allows me to collect dividends and reinvest them into dividend paying stocks more rapidly.

Transactions

For the past 3 months I was investing new capital into energy related stocks such as PSK, FRU, IPL and PPL. Those companies are doing well and rebounding rather quickly. Since energy stocks rallied to short-term overbought levels, I decided to buy something else and return to energy sector once they test the support level.

So the first purchase of the year was in the REIT sector, specifically in property rental business. I have a lot of exposure in retail and office REITs, but I don’t have any apartment REITs, and generally apartment rentals are supposed to be the safest REITs.

Milestone Garden-style properties

So in January, I bought 60 shares of Milestone Apartments MST.UN.TO for $14.29 per share. The company owns garden-style communities in the US. A lot of it in Texas and Florida. Trading at about 20% discount to their peers and the dividend yield is around 4.5%, paid monthly. I plan to buy more companies in apartment rental business.

Dividend Portfolio Update - December 2015

Dividend Portfolio Value

By the end of December 31, 2015, my dividend portfolio balance was at 24,434.40. If it wasn't for the tax loss season that swept away 600 points from the TSX Composite Index, my portfolio balance would have been well above the 25K mark. In a whole, Canadian market was a very difficult place to be invested in. The market peaked in mid-April, reversed, and then dropped like a rock. At this moment, it continues to be in a down-trend with no sign of support. However, I have a feeling that we are near the bottom.

In 2015, from the beginning up until September, I was focusing on non-resource stocks. I was patiently waiting for the energy sector to hit the bottom before investing fresh capital in oil stocks. Luckily, I sold some oil stocks in June of 2014, just a few months before the collapse of oil prices. Back then VSN was trading at around $18 per share, now $9; PPL was trading at around $44 per share, now $30; and CPG was trading at around $47 per share, now $16.

So, the New Year is ahead of us. The direction of market is unpredictable. If the oil moves higher during the cold winter season, it will give a great boost to energy stocks which I started to invest again as of October of 2015.

Dividends

Dividend income is a passive income for which I don’t have to work for. In December, I received a total of $151.97 in dividends vs $115.11 for the same period a year ago. That's an increase of $36.86 or 32% on year-over-year basis. My total Year-to-Date dividend income for 2015 is $1,516.81. I was forecasting to receive $1,400 in dividend income for the whole year. Next year my dividend income should surpass $2,000 milestone if everything stays status quo. It doesn't sound like a big amount, but again, I don’t have to work for that money.

Contributions

In December, I added $1,200 of fresh capital to my account. My regular monthly contribution rate was $800 during the year. However, I had to increase that in December in order to reach my contribution limit for the year which was $10,000. The TFSA contribution room will be rolled back to $5,500 as of 2016. I plan to keep my monthly contributions the same because I still have some contribution room from prior years.

My Investment Account (Tax Free Savings Account)

My TFSA consists of 24 Canadian dividend paying stocks. Most of my stocks pay dividends on monthly basis. This allows me to collect dividends and reinvest them into dividend paying stocks more rapidly.

Transactions

In December, I initiated two new positions in the energy sector. This time I chose the pipelines. I bought 30 shares of INTER PIPELINE (IPL.TO) for $21.12 per share and 20 shares of PEMBINA PIPELINE (PPL.TO) for $29.07 per share. At the current low valuations, these names look very attractive and it’s a safer way to increase exposure in energy sector than buying an actual producer. For instance, IPL had a record quarter and increase their dividend despite low oil prices.