Buying and Selling in January 2021

Hi everyone, I hope you are all well and doing lots of great things with your investments. I thought I would write this post a little earlier than usual, normally over the last several months I have written a monthly investment activities post that would cover the entire month. However January has been very busy for me and I thought I would write it sooner, and who knows I might not be done this month and may have to write another post at the end of the month.

Back on December 30th I published a post Latest Portfolio Decision, Moves in which I shared with everyone that I made the decision to “journal” all but one of my Canadian stocks that were in the Canadian side of my RRSP and move them over to the US side of my RRSP. I was able to do this because those stocks are listed on the US stock market. The stocks that were moved were:

  • Bank of Montreal
  • Royal Bank of Canada
  • Fortis
  • Enbridge
  • TC Energy
  • Telus
  • BCE

The stock that wasn’t moved was Power Corp of Canada and since they aren’t listed on the US markets I could not “journal” it. When that post published I received a lot of comments from fellow bloggers, some questioned my strategy and said I wasn’t really diversifying my portfolio by doing this. I had people say I should maybe sell all my stocks and just go with a couch portfolio strategy for a bit. With all the comments, which in my opinion were all positive and coming from good places, I decided to spend the following couple weeks really and I mean truly thinking about what my investing should be going forward.

By journalling those stocks I was giving myself an opportunity to truly diversify my portfolio like I have wanted to do for several years now. I had two bloggers mention to me that I should do the Norbert’s Gambit which I partially did by moving the stocks and now I should sell them and buy US stocks. During the week of December 30th I was hesitant to do this because I was only focused on all the dividend income I would lose. Over the past couple weeks I came to the conclusion that going forward I need to look at total returns, and not just dividend income for my portfolio. I can always get the income back over time.

Stocks Sold

With all that said I made the decision to complete the Norbert’s Gambit and sold all the Canadian stocks in my RRSP including Power Corp. I believe I need to diversify my portfolio away from Canada and this is a quicker way to do it. The way I was going to do it would take too long.

  • Telus I ended up making a profit of 23% when I sold
  • TC Energy I made 5.8% when I sold
  • Royal Bank I made 33% profit when I sold
  • Fortis I made 47% profit when I sold
  • Bank of Montreal I made 20% profit on the stock
  • BCE I made 9.14% profit when I sold
  • Power Corp I made a 5% profit when I sold
  • Enbridge I lost 18% when I sold

I should note that the numbers above don’t include the dividends received over the years it only reflects the share price. By selling these stocks my forward dividend income drops from $8,479.67 to $5,177.09, quite a lot of income to lose but I’m confident I will get it back over time plus get more total returns

With all the money I received from selling the above stocks I am putting it into the US market. I did decide also to expand my portfolio a little bit. Here is what I bought. Also I did make one purchase for my TFSA and 3 purchases in my second RRSP account, I will share them below all the purchases in my main RRSP account.

Stock Purchases

January 12th

  • Apple (ticker: AAPL) 30 shares @ $128.79
  • General Dynamics (ticker: GD) 20 shares @ $153.58
  • AT&T (ticker: T) 50 shares @ $28.81

When I started researching stocks I wanted to try and focus on technology, industrials and healthcare as my portfolio was a little weak in those areas. Two of my first three purchases were in those sectors. With Apple I have wanted to buy it for quite awhile and never got around to it, here I added a small amount of shares and will look to buy more in the future. My second buy with General Dynamics, they are another defence contractor and are a solid company. With GD I believe shareholders will see both good capital appreciation and dividend growth in the future. With the AT&T buy, I admit it is more for the dividend in pays as it has a yield of just over 7%. I do however believe it might be a pretty good year for them as they continue to grow its subscriber base for their streaming service HBO Max.

January 13th

  • Bank of America (ticker: BAC) 28 shares @ $33.34
  • General Dynamics (ticker: GD) 20 shares @ $152.16
  • Lockheed Martin (ticker: LMT) 6 shares @ $340.75
  • Pfizer (ticker: PFE) 50 shares @ $36.76

With these purchases I mostly focused on adding to existing positions. I did add Pfizer to the portfolio and it’s in the healthcare sector which I’m sure everyone knows due to their Covid vaccine being distributed worldwide. With Bank of America I had held 72 shares before this purchase, I thought it was a good time to add to the stock and get the share count to an even 100. For the second day in a row I bought General Dynamics, after I bought it the first time I noticed the ex dividend date was January 15th so I thought I would buy and so I could receive more dividends. I added more shares of Lockheed martin to my portfolio I thought it was a good time to add and will look to do so in the future.

January 15th

  • Merck & Co Inc (ticker: MRK) 20 shares @ $82.24
  • 3M Company (ticker: MMM) 10 shares @ $164.26
  • Johnson & Johnson (ticker: JNJ) 10 shares @ $159.59
  • Verizon Communications (ticker: VZ) 50 shares @ $57.31
  • Pinnacle West Capital Corp (ticker: PNW) 25 shares @ $78.66

Added three new positions to the portfolio and these were for healthcare, telecom and the utility sectors. Merck Co & Inc becomes my fourth and final healthcare stock, I will now look to grow my positions in Merck, Pfizer, AbbVie and Johnson & Johnson. Speaking of JNJ I decided to buy more shares, even though the price was higher than I last paid for it I thought it was still a good buy. I added to my industrial stock of 3M I’ve been looking to add more shares now for over a year and I finally had the cash to do it with. I decided to buy a US utility in Pinnacle West Capital Corp it’s business and focus is in the state of Arizona. I decided to add Verizon to the portfolio so now I hold two of the main telecoms in the United States both of which should do well with 5G starting to roll out.

January 13th

TFSA Account

On January 13th I added a new stock to my TFSA when I purchased 40 shares of Alimentation Couche-Tard @ $37.19 per share. The day before the company took investors and the business community by surprise when they confirmed they were in talks to buy Carrefour France’s largest private employer for a potential $20 billion. The stock market reacted negatively to this news and on January 13th the stock price fell by 10%, when I bought the shares it was down 8%. Later in the week it was confirmed that the French government would block the merger and so both sides have called it off but will continue to talk and explore different business opportunities. I don’t plan on selling this stock like I did before I believe the company has a bright future and they will continue to expand through acquisitions.

My Second RRSP Account

In this account I only hold one investment and that is the ETF iShares Core MSCI All Country ex Canada Index ETF (ticker: XAW). So far in January I have been able to buy shares on three occasions.

  • January 6th 6 shares @ $31.17
  • January 7th 1 share @ $31.27
  • January 19th 6 shares @ $31.54

I usually buy shares of XAW on a bi-weekly basis, this month however I received the distribution they paid and with the small amount of cash I had I was able to buy an additional share on January 7th.

With all of these purchases I have added $739.58 in forward dividend income. After all of these moves my portfolio diversification is:

  • Canada 39%
  • US/World 61%

Also I should mention I still have about $23,500US sitting in cash I will look for opportunities to spend this money.

Thanks for reading!

Matthew

16 thoughts on “Buying and Selling in January 2021

  1. Nice Matt

    Think this was a good move. Lots of nice purchases – 3m, gd and lmt are all at good prices currently and I’ll try buy some b4 tax time.

    Gotta love that portfolio diversification now!

    keep it up, heres hoping you get a nice dip for that cash.

    cheers

    Liked by 1 person

    1. Thanks Rob I think it was the right move to make as well. At first I wasn’t going to sell the CDN stocks but it didn’t make sense to keep them and collect the dividends.

      Like

    1. Hi Barry I’m with RBC Direct Investing and with them there is a transfer funds section, I just click on it and I enter my account. I’m sure your brokerage has something similar.

      Like

  2. I spent December doing this same thing. I sold all of my Canadian holdings in my RRSP (leaving only US holdings) and then moved everything over to the USD side. So now my RRSP is all US stocks in USD. With only a few exceptions, I hold Canadian stocks in $CDN in my taxable and TFSA accounts.

    Liked by 1 person

  3. This is Great! just the timing for BCE, Fortis and Enbridge sale might not have been great, but overall great move. I also had the similar realization in 2018 , using Norbit Gambit method i used the proceed from partial sale of overexposed canadian names to growth plus dividend US stocks like Apple, Home Depot, Starbucks, Disney, Abbv, Microsoft . Thus far overall performance has been great. i did most of mine in my wife’s TFSA . The benefit of tax free growth in TFSA far exceed the dividend tax credit we get in RSP . I am currently 60% US and 40% canadian exposed.

    Thank you for sharing . Best wishes and I hope you continue to focus on Total return and not just dividend income, just like you mentioned in this Blog. The opportunity cost for tying up all the hard earned money only in dividend focused assets for mere 4-5% dividend is Huge, especially in our age where we still have enough time to retirement and especially if you live in Canada where alternate investments like housing have exploded while Broader Canadian stock market have done nothing. Just imagine the opportunity in housing market we may have missed while only focusing in dividend. Net worth could have exploded, well same applies to me. Anyways past is past, Best wishes and Cheers to Diversification and New dividend plus growth strategy.

    Liked by 1 person

  4. Good job Matthew ! Impressive ! I can’t believe it, you are now Canada 39% & US/World 61%, good job! I’m actually the opposite ! I think I should do the same and rebalance this year, more US into my RRSP & leave my canadian stocks/ETF into my TFSA + taxable !

    Liked by 2 people

  5. hi Matthew,
    great blog, i came here from cutthecrap investing.
    i understand that this blog is about investing & not about saving,but can you please highlight how you were abe to build such a good portfolio, your job profile is different from most other financial bloggers who are from high paying jobs, thanks in advance.

    Liked by 2 people

    1. Hi Sam, thanks for reading the blog and great question. I am currently 37 (38 in June) and I started investing when I was either 19 or 20. I started in mutual funds and I was automatically depositing between $100 – $200 per month. Sometimes I would add a bigger lump sum deposit on top of the auto deposits. In 2014 I noticed my portfolio hadn’t been growing that much for some time so I took my money and went to RBC Direct Investing and started investing in individual stocks. I did this because at the time like a lot more people now, I didn’t have a work pension and wanted to create one for myself. So over time I took the dividends I received and re-invested them into the stocks I held or bought different ones. Since I don’t make a lot of money on occasion I have borrowed money and that has really helped boost the portfolio. For example last year I was able to max out the contribution room in my Tax Free Savings Account, it is a goal of mine to max out this account every year ($6,000 per year). I currently work as a custodian. Thanks for the question hope this helps!

      Liked by 1 person

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