At this point, you can probably get out and still make some money (it traded earlier in the low 16’s) and then turn around and purchase a dividend producing equity that is in the same industry – or at least not in the financials because of your over weight position already.

Samuel Manu-Tech is classified as being in the same industry, very thinly traded, has a yield of around 9.5%. It is losing money but would be a proxy on a NA-Mexico economic rebound – kind of what Teck would be.

It is near a 15 year low. Somewhat speculative one might say. Might be worth keeping on a periodic check list to see if what happens to its losses/profits and whether it can maintain the dividend.

I hope you didn’t get rid of Teck. It is up another 25%+ since my post! It is easily the best performer in my SM portfolio (although at one time it was my worst).

Keep up the great work on your posts!

It’s up to you when you want to pay down your mortgage. The reason why I do it is b/c I have a readvanceable mortgage and my credit limit goes up with every dollar I pay down on the mortgage.

Hope this helps!

Do I to pay down mortgage first before deposting in to investment account?

BTW: I am ware of the superficial loss rules (through your and CC posts)

sorry for multiple questions.

Thanks.

You can either wait until your stock return to the value you feel comfortable with before selling, or sell for a capital loss.

Personally, if you are dead set on putting your portfolio against your mortgage now, I would sell the portfolio, use the cash to pay down the mortgage, THEN use an investment loan to buy more stock.

One thing to note though, if you sell for a loss, and would like to buy back the same stock in the near future, be careful of superficial loss rules.

Great! site with wealth of information. Keep up the good work.
Please give your thoughts on the following scenario.
I have setup a HELOC (not readvanceble as my mortgage is up for renewal end of 2010 and don’t want to pay penalty for readvancing)
My current fixed mortgage interest rate is 4.04%.

I have a non-registered brokerage account setup soem time ago and have stocks and cash balance worth of 20K. As my portpolio value is less than what I have invested I may have to wait for bit of a market recovery to sell anything.

Here is what I am thiking of doing please let me know is this a good idea.

1. want to use my HELOC (Prime +1) and to withdraw 20K and deposit in to my investment account
2. Withdraw within days 20K from my investment account and pay 20k against my mortgage.

Will this be allowed? If not what are the options available for me to use borrowed money for my non-registered account and repay the mortage by the same portfolio worth of my no-registered account.

Thanks in advance.

I don’t use Questrade but I do use IB. I can only transfer money out of IB manually and it can only go to the account that funded it (within 60 business days or something like that) or any account if after the holding period.

I haven’t actually done this yet – I’ve only transferred in.

When you buy dividend stock within a Canadian Discount Brokerage, the dividends will automatically be added to your brokerage account on their payout date.

Here’s a primer on how to buy and sell shares on the stock market.

Can you help as I am new to stocks which yield dividends. For me to receive the dividends do I simply have to purchase the stock? do I have to register so they know where to send me the dividend payments? how does that work? can you help me out please or send me a link to your previous articles.

Keep up the great work, all of your content and discussions are very helpful

For a very lengthly discussion on tracking error and leveraged ETFs, here is an article I found:

http://seekingalpha.com/article/126765-leveraged-etfs-is-tracking-error-really-so-troublesome

Now, take a few minutes and go here:

http://www.google.ca/finance?q=TSE%3AHxu

Play around with various short term timeframes (because you really shouldn’t use the leveraged ETF’s for long term investing). What you will notice is that if you wanted to be long the TSX composite, you could invest in Beta Proshares ETFs such as HXU (Bull – 2x the TSX) or you could short HXD (Bear – 2x the inverse of the TSX).

Because of friction of fees, use of derivatives and the imperfect action of having traders determine the price of these ETFs there is a drag on the performance. The HXU doesn’t quite hit 2x the underlying ETF it tracks – over time this can become significant, especially in a volatile market. And, if you guessed wrong and bought a bear like HXD when the market is going up, up and up, the drag will make you lose MORE than 2x the underlying ETF fall.

But, that is where the advantage is. If you wanted to be long the TSX, you would then short the bear thus giving you more than 2x the movement!

I just heard this thought earlier this week on BNN and I think I’m going to adopt this approach as a hedge against a market retracement.

Thus, since I believe we are headed perhaps 10% lower in the next 30 days, I would short the bull (as opposed to go long the bear) version of the indices I want to track.

With regards to your mortgage vs the market question, it’s a personal decision. With your mortgage rate being 5%, paying it down gives you a guaranteed after tax return of 5%. If you think the market can do better, and not afraid of volatility, then go with the market.

That is providing that the $3k is adding to your portfolio and not starting out. I’m not sure that $3k is enough to give you a diversified portfolio.

I think it would be more illustrative for you to post the yield of your portfolio based on your purchase price rather than the current one. I’d like to see how much up (or likely down) each position is and what the initial yield was.

I’d keep Teck – it was seeing it on your blog that encouraged me to buy it. Although I purchased it at quite a discount from your price I still bought it way above its 52 week low. Now it is my best performing stock in my SM portfolio.

“Patience, Luke… Patience!”
If only I had heeded the words of my master…

Get rid of PCA, too and take your profits while waiting for a drawback within the next 30 days (when the earnings releases will be almost complete).

I’ve actually taken some of my dividends and bought hedges – the beta proshares bears. When I think we are truly over the worst, I will then sell them short. Apparently, if you want to be in a position using EFT’s that go 2x the direction of the market, you actually are better of selling the opposite position short rather than go long in that position. The constant readjusting and error in tracking are to your benefit by doing it this way.

Questions:
What’s the hesitation on ENB?
Are you DRIPing with all your investments?
Curious…

Question for all:
Which is better in this market?
1) Pay down the mortgage (currently at a fixed rate, year 1 of 5, unfortunately, @ 5%) or
2) buy stocks?

I currently have $3,000 to invest.
Thinking about more ENB or BMO.

Thanks everyone!
Mark in Nepean