Future Portfolio & New Strategy

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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

23 thoughts on “Future Portfolio & New Strategy

  1. 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.

    Liked by 1 person

  2. 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.

    Liked by 1 person

    1. 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.

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  3. 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.

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  4. 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.

    Liked by 1 person

  5. 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.

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  6. 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).

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  7. 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!

    Liked by 1 person

    1. 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!

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  8. […] 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 […]

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