
Hi everyone and welcome back! Today I wanted to share with you what my future portfolio & strategy will hopefully look like in the years ahead. At the beginning of April I was reviewing my portfolio and seeing all the stocks I held when I made a decision that I should change things up.
Before getting into what I want to do let’s take a current look at my portfolio.
TFSA
Currently consists of 21 Canadian dividend paying stocks and 1 Exchange Traded Fund.
RRSP (RBC Direct Investing)
My RRSP with RBC currently consists of 10 Canadian Dividend stocks and 11 US dividend paying stocks.
RRSP (Wealthsimple Trade)
This is a relatively new account this year and it only has 1 Exchange Traded Fund in it.
LIRA
Currently has 2 Canadian dividend paying stocks in it.
New Investing Strategy & Portfolio
For my new ideal portfolio I have no set amount of stocks that I want to hold. I do however want to only hold US stocks in my RRSP accounts and to have all of my Canadian stocks in my TFSA account.
TFSA
My future TFSA account would probably consist of around 30 Canadian stock all dividend payers. I’m currently at 21, the stocks in my RRSP that I want to have in my TFSA are BCE, Telus, Fortis, Enbridge, TC Energy, Bank of Montreal, Royal Bank of Canada and Power Corp.
These eight stocks currently have a value of $59,200 as of April 22nd. With that valuation it will take me years to complete all of this. How do I plan on doing this? Well I currently have just over $2,000 left in contribution room left in the account and $4,300 in cash I plan on making small purchases throughout the year on the stocks mentioned above and using the $6,000 in new contribution given on Jan 1st of every year to continue this process. Also I will be using the dividends from my current stocks in the account to invest in these as well.
RRSP (RBC Direct Investing)
While I’m making the purchases in my TFSA account at some point I am going to be selling the shares of the Canadian stocks in my RRSP account. I have yet to decide on when I will sell these shares, I could wait until I have all the shares of a stock (for example I have 212 shares of Telus I might wait until I have all those shares in my TFSA then sell or I might do it in 50 share allotments). In this current environment I won’t be selling anything anytime soon.
What do I plan on doing with the money once I sell? Well I plan on reinvesting the money into the current stocks I hold in the account Johnson & Johnson, Lockheed Martin, Texas Instruments, Walgreen’s Boots Alliance, AbbVie, Altria Group, Microsoft, Bank of America, Home Depot and 3M.
RRSP (Wealthsimple Trade)
For this account for this year I will continue making small contributions bi-weekly and use the money to continue purchasing the iShares Core MSCI All Country World ex Canada Index ETF (ticker: XAW).
Once I max out my TFSA account hopefully this year, I will switch those contributions to this account and purchase US stocks. Some stocks that are on my radar are Visa, Raytheon, General Dynamics, Union Pacific, Walmart, Cisco, Intel, Proctor & Gamble etc….
LIRA
Not really planning on changing things with this account. I will continue to hold Enbridge and Diversified Royalty stocks and will add to them when the money accumulates from their dividends.
Why Am I Doing This?
I am going this route because I believe I can become better diversified and have the ability to buy more US dividend & growth stocks. At this moment I feel as though with the Canadian stocks in my RRSP they are hindering me in buying more US stocks.
Also I do realize that by adding those stocks to my TFSA I’m not going to get huge capital appreciation with them, but they will bring some stability to that account and over time I will be able to use the dividends received to help grow the account at a nice clip. Also by doing this I should hopefully be able to turn my attention to the US market, as I don’t think I really need to buy anymore Canadian stocks as I have all of the important sectors covered in my portfolio. Although these days it’s making me think I should add a major grocery stock and possibly Alimentation Couche-Tard a huge convenience store chain.
So folks what do you think of my plan? I would love to get your feedback positive or negative that is how we all grow as humans by listening to each other and learning.
Thanks
Matthew
This sounds like a good plan. If you are with Questrade for your RRSP, and the Canadian stocks you hold are interested, then get them journaled over to the NYSE equivalent. This means that your dividends will be paid in USD and when you sell, you will sell in USD. I keep TD.to in my TFSA and TD in my RRSP. It also means I don’t have any currency exchange costs. Most other brokers likely support journaling, but it may be for a small fee. Questrade is free and just requires you to send an email to their support mailbox.
LikeLiked by 1 person
Hi thanks for this suggestion I never even thought of doing that. My RRSP is currently with RBC Direct Investing.
LikeLike
Maybe call in and ask about ‘journaling’. Usually takes a few days…but it can be well worth it.
LikeLiked by 1 person
Ok thanks I will definitely look into this.
LikeLike
This may sound like an easy question but why not keep the US stocks I your TFSA and the Canadian ones I your RRSP? From what I know the US market usually grows faster than the Canadian one and all your growth would occur tax free.
As I’m not really a dividend investing investor I’m just wondering your thoughts on this.
LikeLiked by 1 person
Hi that is a good question. I hadn’t considered that really because if I owned dividend paying stocks in my TFSA account I would have to pay taxes on them. Looking at that now when you mention growth I could possibly end up paying more in taxes when I get older and have to withdraw the money. You have definitely given me something to think about.
LikeLike
It makes a lot of sense to focus on US stocks in your RRSP. Also like the idea of buying XAW. 🙂
LikeLiked by 1 person
I am hoping to finish restructuring my accounts in the next 2 years. Good luck with your new strategy!
LikeLiked by 1 person
Thank you! All the best to you in your restructuring!
LikeLiked by 1 person
I think your strategy is good. If you were to hold US stocks in your TFSA every time your dividends would get converted to CDN$. then there is the exchange rate and fees to deal with. And you don’t pay taxes on dividends in a TFSA. Everything is tax free.
So I believe the best strategy for a TFSA is staying with Canadian stocks. In the RRSP you can journal your stocks over to the US side and then not worry about currency exchange.
LikeLiked by 2 people
Thanks for this I appreciate it!
LikeLike
This isn’t necessarily true, scotia itrade allows you to have a US currency portion in your TFSA So your dividends are paid out in USD and stay in usd
LikeLiked by 1 person
It’s always interesting to see what other countries do when it comes to investing and retirement investing.
Thanks for sharing.
LikeLiked by 1 person
The most important thing is having a plan and sticking with it!
XAW is my largest holding. I have a similar strategy – My TFSA is all Canadian Equity, RRSP is XAW, and some Canadian funds/stocks.
Cheers.
LikeLike
Sounds like a good diversified strategy. As long as you’re picking up high quality stocks, you will do fine. Grocery stores seem to be defensive because we always need to eat, however, it’s easy to control grocery spending so the stores might have revenue declines in the future. For example, we usually spend about $600 on groceries but if we need to tighten the budget, we could easily survive on $300/mo grocery budget. That’s a 50% cut in store revenues. Can’t say the same about utility bills or rent. That stays the same regardless of the situation.
LikeLiked by 1 person
Matthew,
Not a bad strategy if you can keep your commission cost low. I prefer to keep my transactions to >/= $2K. A suggestion to add some global diversity to your TFSA: Unilever (UL). There are no withholding taxes on UK stocks.
LikeLiked by 1 person
Thanks Bernie I will look into Unilever
LikeLike
Matthew,
The suggestion, made by thoughtshandful, of keeping your US stocks in your TFSA is a good idea but only if they are non-dividend or ultra low dividend payers. BRK.B comes to mind. I wouldn’t suggest keeping US dividend payers there because your dividends will be eaten alive by non-recoverable withholding taxes. IMO US payers should be kept in: (1) RRSP/RRIFs (no taxes until withdrawal) or (2) non-registered account (withholding taxes which can be recovered on your tax return and capital gains tax).
LikeLiked by 1 person
I would not recommend keeping all us stocks in RSP account just to save on 15%foreign dividend tax. The growth on us names in your portfolio like msft, HD, Lockheed Martin etc is much much more than the tiny dividend tax you save. If it’s in your Tfsa you can capitalize gain complete tax free. Personally for myself This market correction has made me change my strategy from 8% technology growth to 30% technology growth rather than just focusing on dividend alone which I used to be doing. My. Focus is now on blue chip technology/growth names with dividend if all possible. Large tech stocks are infact present day utility/defensive names for E.g. Say google we use 4-5 google product every day like YouTube/gmail/android/google map etc . This is why tech names has recovered much faster during this down market. I bought Apple and Microsoft in late 2018 and I m still over 70% up plus dividend in these names whereas I bought cnq, hr reit, Enbridge, Bns, Manulife bce in 2014/2015 and I am 35-70% paper loss in cnq/hr reit/Enbridge and close to break even with bns/Manulife/bce. So moving forward I will keep focusing on growth apart from dividend. I personally have followed your blog from past 3-4 years I used to see you had heavy exposure in pipeline, reits and small cap names But lately it has diversified much, mostly with us names like Microsoft/ HD/Lockheed Martin and that is great. Keep up the good work. Best wishes!
LikeLiked by 1 person
Thanks so much for the comment. I agree with you about tech becoming the present day utility you’re example of Google is a perfect one. I’m trying to get away from the small caps and go with blue chip companies both Cdn and US. I do like the idea of having some growth stocks in my TFSA such as Visa and others. Thanks again!
LikeLike
[…] Hello and welcome to the end of April everyone. Last week I shared with everyone about my Future Portfolio & New Strategy. […]
LikeLike
[…] If the price drops I will add more shares but for the moment I will probably look to see if there are other opportunities out there as I continue to implement my Future Portfolio & New Strategy […]
LikeLike
[…] If you were to look at the income you would see it is down however as I mentioned above about the special dividend, it was this account in which I received it. It was paid by European Residential Reit. Some of the stocks I bought in March paid me their first dividends so I was very happy to see this. Over the course of time you will likely see my TFSA be the busier of the accounts as I implement my Future Portfolio & New Strategy […]
LikeLike