It turned out to be a pretty good week on the markets, especially for natural gas, but the key theme seemed to be volatility. Even though I use the graphs to decide when to buy and sell, in general, I seem to be taking profits more quickly these days than I normally do. For example, when Encana announced they were going ahead with plans to split into two companies - estimated to be worth $65 separately - I sold when the stock jumped to $63. I reasoned that the jump was more than I had planned to make in that short time, and that either natural gas or Encana itself could easily weaken next week.
Today, to close the week, I sold ECA, RUS, BTE.un, and ENF.un. The one of these that I regretted the most was Baytex (BTE.UN) but the drop in the price of oil of over $2.60 per barrel made me think that weakness could be on the way for oil stocks.
I still own a few equities - RCI.B (Rogers Communications), HFU (Financial ETF), MBT (Manitoba Telecom), COS.UN (Canadian Oilsands), and YLO.UN (Yellow Pages Income Fund). With the volatile markets, I like the idea of collecting distributions from trusts but the loss that I could easily incur in the unit price could easily outpace the distributions that I would be paid. I don't want to let the potential distributions sidetrack me from my strategy.
I am up a collective 51.5% YTD on all my accounts, so I am certainly happy with that. Also, I have not had a negative month since October 2008 (although it was a HUGE down month), so I have a good string of positive months going. The summer was slow, but things seem to be picking up a bit now that traders are back from summer vacation.
I am still expecting a 5 - 15% correction in the markets, to consolidate support, in the next couple of months.
On a separate note, I opened a TSFA last month at TD, so I want to choose an equity to invest in there. I want to grow that as much as possible, since it is tax free. With $29 buy and sell fees, though, and only a $5,000 initial balance, I want to choose the equity carefully.
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This week was definitely good for my portfolio as well! Like you, I own units of Yellow Pages Income Fund. I guess you trade with TD Waterhouse, since your talking about a 29$ commission fee. I begin to trade with TD Waterhouse after reading Derek Foster books lol. I am looking into a cheaper alternative: Scotia iTRADE, 19.99$ per trade instead of 29$.. Why should investors should pay as much as 29$ per trade? lol... Like your blog. A message from myfirst50000.com
ReplyDeleteThanks for the kind words. I do most of my trading with CIBC ($6.95 trades), but I opened my TFSA at TD since CIBC didn't allow online TFSA trading at the time (they do now, apparently). I will likely move my TFSA to CIBC soon, since I can get $6.95 trades there for the TFSA as well, and the commissions are very important when you are only working with $5K to start with.
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