Time again for the monthly Smith Manoeuvre Portfolio update, June 2008 edition.
For those of you just joining us, The Smith Manoeuvre is a Canadian wealth strategy that utilizes a home equity loan to invest in income producing assets. The result is a tax deductible loan and portfolio that increases as you pay down your mortgage.
The markets are currently in correction mode which means it may be a good time to add to my positions. All the financial yields are up. It seems that some economists are predicting a global market crash, however, don’t let that phase you. If the markets do correct, see it as a good time to jump in!
Onto the business at hand, the portfolio. In terms of trading, the Bank of Nova Scotia position was doubled in addition to a small new position in the fundamental index ETF for U.S small-mid caps. Along with that, we initiated small new positions in BMO and a mutual fund management company that I was eyeing last month, AGF Management.
|Stock||Symbol||Shares||Avg Buy Price||Total||Div/Share||Yield|
|FTSE RAFI US 1500 Small-Mid ETF||PRFZ.US||20||$51.50||$1,029.99||$0.42||0.82%|
|AGF Management Limited||AGF.B.T||50||$22.71||$1,135.49||$1.00||4.4%|
|Bank of Montreal||BMO.T||25||$44.17||$1,104.24||$2.80||6.34%|
Total Portfolio Cost Base: $20,042.46
Total Dividends / Year: $796.75
Portfolio Dividend Yield: 3.98%
As you can see, the portfolio is still heavily weighted in financials, but it’s starting to get diversified into utilities like TRP and FTS, along with a small position in the U.S small-mid cap index. I’m looking into more ways to diversify the portfolio, and still meet the CRA tax rules for a leveraged investment loan. One goal of the portfolio is to have a larger growth portion. Any ideas?
Stay tuned, the June net worth update will be posted later today.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).