Initial Value $41,000.00
December 18, 2016
Update Value $54,028.74
May 31, 2018
Our Income Portfolio was launched in May 2015 with a goal of generating cash flow in the 5% range for TFSA accounts. This makes it especially useful for older people who want to receive tax-free income. You can withdraw the dividends/distributions earned each year without paying any tax, while leaving the principle intact.
Comments: The value of the portfolio (market price plus retained earnings) declined by $455.54, or 0.8%, during the latest six-month period. It could have been much worse considering the overall downtrend in interest-sensitive stocks, but gains in Firm Capital, and especially Dream Global REIT, plus strong distributions helped to stem the loss.
Despite the recent loss, since the portfolio was launched three years ago, it has posted a gain of 31.5%. On an annualized basis, that works out to 9.63%, which is still very respectable for a portfolio of this type.
Cash flow during the latest period was $1,401.80, for a six-month yield of 2.57% based on the portfolio value last November. In terms of the original $41,000 investment, the six-month yield was 3.42%, so we are well ahead of our 5% annual cash flow target.
Changes: We will replace Inter Pipeline with shares of Pembina Pipeline (TSX: PPL). Yes, we?re still in the pipeline business, which means the stock is interest-sensitive, but it has held up much better in the current climate than Inter.
tii1810 | tii1722 | TII1710 | TII1624
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