Hi:
Been a splendid year. Was a year of harvest, after 2 years of sowing. All years are splendid really, because if you lost money any particular year, you also likely bought something lowish to set up future gains.
In 2016 I said goodbye to BCE, EMP.A, JNJ, LRE, and TRP. LRE went private in the end and managed to escape with all my fingers. The other 4 priced at the time I thought highish were mostly sold to raise funds for redeployment elsewhere where I figured I had a decent shot at buying lowish. The recent decline in the Canadian dollar also factored in the JNJ sale.
No new companies were added to the portfolio. The year end holdings comprise 17 Canadian and 1 USA company, plus the mutual funds that came with my wife in her RRSP.
ACO.X, BMO, and GE holdings were static.
TECK.B had a net reduction, though multiple additions and sales.
The following had net additions: BNS, BTE, BBD.B, CM, CWL, ECA, HSE, MFC, MX, OSB, POW. ECA had multiple sales too.
Largest 6 holdings were 54% of portfolio year end 2016 for average weighting of 9%, 45% (7.5%) year end 2015.
Debt was 23% net worth YE 2016, vs 29% YE 2015.
Year end total indicated annual dividends 2016 $60,182, 2015 $38,405.
Holdings in a loss position year end 2016, 1 at -5%; 2015, 9 ranging up to -48%. Reduced the ACB on 8 of the 9 holdings in a YE 2015 loss position.
Goals going forward:
Work the debt down in absolute dollars and as a percentage of net worth. My long term target has been 25%, but after a period of things going swimmingly, a lower number will leave me better prepared for whatever hits the fan next time. The good times don't last forever. Plus my wife will soon retire, so the ballast of an employment income will be gone (albeit replaced with a pension income).
Reduce the big six holdings: BTE, MX, OSB, ECA, TECK.B, BBD.B. I like all these companies. I like them a lot. They are all in a transitory phase to some extent, but as and if good things happens with any of them, they will be sold down. Already started on TECK.B and ECA in 2016.
As I reduce the big 6, I need to get back some balance in the rest of the portfolio, mostly in the utilities space, though I am reluctant to pay PE 18-20 for any of the usual suspects.
Grow the portfolio yield in dollars and percentage terms. I like to aim for 3%, but well under that now due to extensive work of late in the no and low paying materials space. Some additional dividends may show up from TECK.B and OSB this year, but payments from the other 4 of the big 6 will likely be static.
Get the TFSA fully funded, currently $25K of room. We don't really generate an employment surplus any more on one salary (actually 0.76 FTE now) and ever creeping up spending. So I must either take funds out of the RRSP; or contribute in kind, but the candidates both need to be free and clear of leverage for interest deductability reasons, and in a gain situation so I don't throw away a capital loss. Always been running a bit behind here, but this year I think I can close the gap.
hboy54