# How to "invest" $1 million now?



## jargey3000 (Jan 25, 2011)

Here's a topic I'd like to throw out to readers in the hope of getting some consensus agreement:
Where would you suggest investing $1 million today -in a maximum of 3 "sleep-at-night" investments- to be reasonably assured of generating a minimum annual income of $50,000?


----------



## Moneytoo (Mar 26, 2014)

*BCE, BNS, TRP *(but would need to wait for a pullback or till they raise the dividends to get to 50K; *or buy NPI instead of TRP* - we own all 4, plus some more)

Are you playing lottery again?  I bought a few tickets myself, so might ask "How to invest 5 million?" tomorrow... lol


----------



## AltaRed (Jun 8, 2009)

jargey3000 said:


> Here's a topic I'd like to throw out to readers in the hope of getting some consensus agreement:
> Where would you suggest investing $1 million today -in a maximum of 3 "sleep-at-night" investments- to be reasonably assured of generating a minimum annual income of $50,000?


Reaching for 5% yield in 3 stocks is a bit of a mug's game of a potential Black Swan. I would pick equal amounts of XDV @ circa 4.6% (or an equivalent) and ZRE (or equivalent) @ circa 5.7%. If no other income, that might also be virtually tax free depending on province.


----------



## jargey3000 (Jan 25, 2011)

1.yes...this is for the lottery i plan to win  
2. note i said max. 3 "investments" - does not HAVE to be stocks...but could be...
thanks.


----------



## 319905 (Mar 7, 2016)

Well, if I handed my wife $994,983.03 and she ambled up to RBC, according to their online annuity calculator, a single life annuity would give her a sleep-at-night $50K/year for 24 years ... just saying


----------



## jargey3000 (Jan 25, 2011)

rikk2 said:


> Well, if I handed my wife $994,983.03 and she ambled up to RBC, according to their online annuity calculator, a single life annuity would give her a sleep-at-night $50K/year for 24 years ... just saying


....hmmmmm....


----------



## Chris L (Nov 16, 2011)

jargey3000 said:


> ....hmmmmm....


So you put in 1 mil and get out 1.2 mil over 24 years. That sounds like a bad deal.


----------



## Oldroe (Sep 18, 2009)

I would go to the 2 finical institutes we deal with and I would play absolute hard ball with them to get my money at there house. I would definitely get TD's best people working for us. I would grind them on every fee and the price.

Likely not for a million put 5. That's the amount I would have to create income for my self.


----------



## 319905 (Mar 7, 2016)

Chris L said:


> So you put in 1 mil and get out 1.2 mil over 24 years. That sounds like a bad deal.


Sure, but that was the output of 3 seconds thinking and a 2 second Google search, $200K for 5 seconds effort, that's $144,000,000/hour :hopelessness:

Just to add, looking back, the older I got, the more important the sleep-at-night factor became ... retired, financially independent, and sleeping very well at night ... the annuity idea is something that I would include looking into. I'm sure there's more than one thread here on annuities ... not my intention to pursue the pros and cons in this $1M brain-storming thread.


----------



## humble_pie (Jun 7, 2009)

Chris L said:


> So you put in 1 mil and get out 1.2 mil over 24 years. That sounds like a bad deal.



very bad deal. So far there are zero 5% sleep-at-night suggestions in this thread.

speaking of roy bank, jargey you have mentioned in the past that your funds are mostly locked, tied, trapped & bound hand & foot into royal bank wealth advisory services. Might you be able to indicate how that is so?


----------



## cainvest (May 1, 2013)

jargey3000 said:


> Where would you suggest investing $1 million today -in a maximum of 3 "sleep-at-night" investments- to be reasonably assured of generating a minimum annual income of $50,000?


You didn't mention a time frame so .... right off you're guaranteed $50k/yr for 20 years with no real investment risk, sleep like a baby! 
If you're looking to extend farther than that I'd just do a split between a GIC ladder, CDN Index and S&P500 index with percentages that'll allow you to sleep well, maybe 80/10/10?


----------



## jargey3000 (Jan 25, 2011)

humble_pie said:


> very bad deal. So far there are zero 5% sleep-at-night suggestions in this thread.
> 
> speaking of roy bank, jargey you have mentioned in the past that your funds are mostly locked, tied, trapped & bound hand & foot into royal bank wealth advisory services. Might you be able to indicate how that is so?


If i did mentioned that... it was misleading. Most of my investments are thru RBC Direct & Banking... gotta deal with SOMEBODY.
But I also deal with TD & CIBC. I guess it'd be easier to stick with RBC, because I've been with them so long, and , you know, the older one gets , the harder it is to deal with change. But no, I can walk out the RBC door anytime I want to...


----------



## jargey3000 (Jan 25, 2011)

cainvest said:


> You didn't mention a time frame so .... right off you're guaranteed $50k/yr for 20 years with no real investment risk, sleep like a baby!
> If you're looking to extend farther than that I'd just do a split between a GIC ladder, CDN Index and S&P500 index with percentages that'll allow you to sleep well, maybe 80/10/10?


....hmmmmmm....


----------



## tygrus (Mar 13, 2012)

I can do even better. Buy a section (640ac) of farmland and rent it out and have the renter custom farm a portion of it for you.

$50/ac average rent x 480 acres + $200/ac profit x 160 ac = $56,000

or 

$50/ac average rent x 320 acres + $200/ac profit x 320 ac = $80,000

Sleep like a baby...


----------



## humble_pie (Jun 7, 2009)

jargey3000 said:


> If i did mentioned that... it was misleading. Most of my investments are thru RBC Direct & Banking... gotta deal with SOMEBODY.
> But I also deal with TD & CIBC. I guess it'd be easier to stick with RBC, because I've been with them so long, and , you know, the older one gets , the harder it is to deal with change. But no, I can walk out the RBC door anytime I want to...



what you'd posted is that you could not buy Mawer balanced fund because royal bank advisories don't offer it & your funds were tied up hands & feet at roybank ...


----------



## jargey3000 (Jan 25, 2011)

humble_pie said:


> what you'd posted is that you could not buy Mawer balanced fund because royal bank advisories don't offer it & your funds were tied up hands & feet at roybank ...


well, that was misinformation...on my part


----------



## humble_pie (Jun 7, 2009)

jargey3000 said:


> well, that was misinformation...on my part



:wink:


----------



## jargey3000 (Jan 25, 2011)

anyone else care to chime in on the OP subject?.....


----------



## Moneytoo (Mar 26, 2014)

rikk2 said:


> Sure, but that was the output of 3 seconds thinking and a 2 second Google search, $200K for 5 seconds effort, that's $144,000,000/hour :hopelessness:


Well I got this as a top link of "how to invest 1 million dollars" Google search with zero thinking lol:

Alternative Investments - Invest in Shipping Containers

_Fixed 8% Return On Investment
Get Paid Monthly · Get Tax Free Income · Containers Fully Insured · Earn Fixed Returns Of 8%
Destinations: Chile, Saudi Arabia, UAE

Secure, Safe & Low Risk
Containers are trackable and fully insured. Most importantly, they belong to you.

Fixed Return On Investment
We offer a conservative 8% lease for fixed returns but you can also choose a higher income lease which last year generated returns of 26.07%

Exit At Any Time
Our exit strategy preserves your capital so you can sell your containers at any time

Earn Monthly Rental Income
Purchase 4 or more containers and you will be paid monthly_

Sounds like a great way to invest an imaginary million without losing one's sleep :biggrin:


----------



## tygrus (Mar 13, 2012)

Corporate bond? you should be able to get 5% on those and your principle wouldn't move. Maybe some of that new Transcanada isssue.


----------



## humble_pie (Jun 7, 2009)

tygrus said:


> Corporate bond? you should be able to get 5% on those and your principle wouldn't move. Maybe some of that new Transcanada isssue.



trp is too risky, anyhow the new issue is not a bond, it's receipts that will be convertible into common shares

"principal" in this context is spelled principal not principle


----------



## NextLevelInvesting (Mar 14, 2016)

*Options Addition*



jargey3000 said:


> Here's a topic I'd like to throw out to readers in the hope of getting some consensus agreement:
> Where would you suggest investing $1 million today -in a maximum of 3 "sleep-at-night" investments- to be reasonably assured of generating a minimum annual income of $50,000?



Here's a fun little hypothetical trade you could do... if you don't think oil will decrease by much this year (even if it does, same return, minus stock price appreciation)

We could buy 31,918 shares of BP stock at the current price of $31.33. ( i know i know just stick with me...)

That stock is currently paying around a 7.1% dividend (which would net out $71,000 if held for the year) (around $59,000 for 10 month period).
Now, if you sold some call options contracts for Jan 2017 at a strike price of $33 you could get $170 for every contract sold. 

you could sell 319 contracts (31,918/100)
that would give you instantly $54,230

Outcomes possibilities:
if the stock trades above that price by Jan 20, 2017 (fairly likely) you sell the stock and gain an additional $53,294. 
+ $59,000 for dividends
+$54,230 for option trade
=$166,524. ROIC or 16.6% return.

If stock trades below $33 by Jan 20, (also fairly likely)
$59,000 in dividends
+$54,230 for option trade
= $113,230 ROIC or 11.3% return.
This second possibility could also see the stock decrease below our original investment price, which would decrease our investment value.
But, if we consider our dividends and our option trade as decreasing our break-even on the stock, which means, we would now have a stock price basis of $27.78. 
Then we'd rinse and repeat for the next year.

That of course is a random example, but you could do the same with 3 stocks with high dividend yields and end up with slightly lower, but similar returns.

let me know what you think and if my math checks out.

thanks! that was kinda fun.

~Ryan~


----------



## jargey3000 (Jan 25, 2011)

Ryan - I said "sleep at night" investments..... not "nightmares"!


----------



## Moneytoo (Mar 26, 2014)

How 'bout ZPR and sleeping pills then? lol


----------



## gibor365 (Apr 1, 2011)

DFN.PR.A , more than 5% yield and relatively safe...
Pref of 15 top Canadaisn companies in different sectors


> (i) to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends in the amount of $0.04375 per Preferred Share to yield 5.25% per annum on the original issue price; and
> (ii) on or about December 1, 2019 (termination date), to pay the holders of the Preferred Shares the original issue price of those shares.


ZPR down 40% in last 3 years, DFN.PR.A practically unchangable


----------



## jargey3000 (Jan 25, 2011)

gibor said:


> DFN.PR.A , more than 5% yield and relatively safe...
> Pref of 15 top Canadaisn companies in different sectors
> 
> 
> ZPR down 40% in last 3 years, DFN.PR.A practically unchangable


...hhmmmmmmm.......


----------



## humble_pie (Jun 7, 2009)

jargey what's going on? this is at least the 3rd thread you have launched during the past year, all asking how to invest amounts ranging from $1-3 million.

you are not really floundering around with 3 million dollars on your hands, are you? so what's up in newfoundland?


----------



## birdman (Feb 12, 2013)

I personally don't believe there is a direct answer to your question as in my opinion there is none. My reasoning for this is because investing, saving, and spending are all dynamic in that they change regularly. If interest rates are high and declining you may want to emphasize longer dated bonds or GIC's, if they are low you may wish to consider shorter dd deposits. Asset allocation in regards to stocks, foreign investments, GiC's, precious metals, property, etc can change regularly. The same applies to property purchases (eg Do you think buying a knock down house in Vancouver for $2.8 million would be prudent? With all these dynamic factors I do not think it practical to marry yourself to one strategy and diversification weighted to what is happening in the marketplace is the best strategy. For example, if you purchased a life annuity and inflation came back with a vengeance the annuity would have been a very poor choice. Personally, I just try to keep my investments as simple as possible and it has worked well for me. I have always been conservative and have always invested only in Cdn blue chip dividend paying stocks, GIC's (with maturities based on rates and my rate expectations), some gold, and some sundry investments. To myself, making a bet on one investment for $1 million is full or risk, whether it be stock market risk, interest rate risk, or inflation.


----------



## james4beach (Nov 15, 2012)

jargey3000 said:


> Where would you suggest investing $1 million today -in a maximum of 3 "sleep-at-night" investments- to be reasonably assured of generating a minimum annual income of $50,000?


It's shockingly simple: put 500K in *ZCN* (TSX Composite) and 500K in *XBB*. That would automatically generate 30K of cashflow. To get the remaining 20K you want, sell some shares once a year.

For a 50/50 allocation, this gives you the best total return while giving you the income you wanted. Any approach to your problem must involve drawing down capital. At least my way, you're holding the time tested & true benchmark funds, at low cost, without dabbling in any weird exposures.

All the other methods people are posting amount to the same thing -- they're drawing down capital. High dividends for instance deprive a stock of capital appreciation. *You must focus on total return*. The problem with chasing high dividend stocks or anything else "weird" is that by chasing for yield, you can end up with worse, or riskier, core investments.

humble_pie: see this is what motivated my earlier thread. Every 4 days or so, someone asks: I've got this much $, how do I generate this much income?


----------



## Moneytoo (Mar 26, 2014)

james4beach said:


> Every 4 days or so, someone asks: I've got this much $, how do I generate this much income?


The only difference is - jargey doesn't have a million dollars. Nor does he have the time to save and properly invest to get to a million dollars before he retires. But he has time to chat, so he likes starting these threads - what looks like for entertainment purposes (or maybe it's just me who sees it this way ) 

Won a free play... sigh


----------



## humble_pie (Jun 7, 2009)

actually i think jargey does have a million dollars. This is not quite the real story imho, but a fictionalized version could go like this:

they gave him a million dollars but he lost it all on First Quantum minerals. So they gave him another million. Now he's back for more pointers.


----------



## jargey3000 (Jan 25, 2011)

Some good info. here. Thanks folks.
Posts #5(rikk2), #11(cainvest), #25(gibor), & #29(james4beach) are appealing in that they seem to fit the parameters of my OP. I'd appreciate any comments others might have on these ideas, or other suggestions / input anyone might want to share.


----------



## tygrus (Mar 13, 2012)

Take $350,000 of it and put it into REITs most yielding 7%, then margin up by 1.5 times and buy more REITS. Put remaining $650k in HISA.

$350,000 x 0.07 = $24,500
+ $175,000 (margin) x 0.05 = $8500
+ 650,000 x .02 (HISA) = $13,000


----------



## humble_pie (Jun 7, 2009)

jargey3000 said:


> Posts #5(rikk2), #11(cainvest), #25(gibor), & #29(james4beach) are appealing in that they seem to fit the parameters of my OP. I'd appreciate any comments others might have on these ideas, or other suggestions / input anyone might want to share.



for reasons mentioned upthread, suggestions from posts Nos. 5, 25 & 29 do not look to be appropriate for you. Post No. 11 is a good candidate, but it's probably not too far from what your roybank advisor is already recommending.

jargey you've been dithering on here over your $1-3 million for more than a year. What's up, advisor won't return calls or messages any more?


----------



## jargey3000 (Jan 25, 2011)

tygrus said:


> Take $350,000 of it and put it into REITs most yielding 7%, then margin up by 1.5 times and buy more REITS. Put remaining $650k in HISA.
> 
> $350,000 x 0.07 = $24,500
> + $175,000 (margin) x 0.05 = $8500
> + 650,000 x .02 (HISA) = $13,000


Hey thanks tygrus . yeah, I'm considering REITS (matter of fact, i have another thread going on this  )
Do you hold any paying around 7%? Do you sleep well? ( and don't say "like a baby")


----------



## gibor365 (Apr 1, 2011)

> You must focus on total return.


 It depends . If OP has 1 mil and he gonna have comfortable life with 50K/year, he cares much for total return. DFN.PR.A hold preferred of: Bank of Montreal
Bank of Nova Scotia
BCE Inc.
CI Financial Corp.
CIBC
Enbridge Inc.
Manulife Financial
National Bank of Canada
Royal Bank
Sun Life Financial
TELUS Corporation
Thomson Reuters Corporation
Toronto-Dominion Bank
TransAlta Corporation
TransCanada Corporation

imho, it will me much more save to invest there that in 3 individual dividend stocks or index ETFs (as james suggested). At the end of term you get your money back $10/share , so if even interest rates go sharply up and DFN.PR.A price will decline, you still get back your principal + more than 5% in distributions along the road.
Or did I miss something?


----------



## gibor365 (Apr 1, 2011)

> eah, I'm considering REITS (matter of fact, i have another thread going on this )
> Do you hold any paying around 7%? Do you sleep well?Now compare ( and don't say "like a baby")


 than better to consider REIT ETF like ZRE.... On the other hand , ZRE yield is about 5.6% and DFN.PR.A 5.2% .... Now compare "safety" of preferred listed above and ZRE holdings... 

You can also think about such "hybrid": 500K - DFN.PR.A, 250K - ZRE, 250K - ZRE
Your annual income will be close to 50K



> Do you hold any paying around 7%?


 I personally hold bunch of REIT that yield 7+%: CUF, AX, HR, DRG ... but all my REITS combined less than 10% of total portfolio


----------



## jargey3000 (Jan 25, 2011)

thanks gibor


----------



## gibor365 (Apr 1, 2011)

> suggestions from posts Nos. ... 25 ... do not look to be appropriate for you


 and why is it?!:biggrin:


----------



## tygrus (Mar 13, 2012)

I own a small amount of XRE. I already have a 1000 acre REIT from my farm.

XRE itself yeilds mid 5% but the top 4 or 5 holdings in it are in the 7+% range. They are really the only stocks you can margin and still get a return. I pay 2.5% on margin I believe. 

I believe if you put 30% of your wealth in something like this and the market fills its pants like it did last fall, you would maybe see a $50-75k decline in your equity holdings. If you put all million in there, that could be as high as $200k. I can sleep at night being down $50k, but not being down $200k


----------



## gibor365 (Apr 1, 2011)

> f you put all million in there, that could be as high as $200k. I can sleep at night being down $50, but not being down $200k


 This is what I meant, looking at 3% chart ZRE was down 20%, DFN.PR.A just 3.5%... and no one guarantee that with any REIT you gonna get your principal back


----------



## Video_Frank (Aug 2, 2013)

Moneytoo said:


> The only difference is - jargey doesn't have a million dollars. Nor does he have the time to save and properly invest to get to a million dollars before he retires. But he has time to chat, so he likes starting these threads - what looks like for entertainment purposes (or maybe it's just me who sees it this way )
> 
> Won a free play... sigh


He's a troll. Don't feed trolls.


----------



## humble_pie (Jun 7, 2009)

lol it's the blind leading the blind around here

jargey if you want to own the dividends from the 15 blue chips in DFN preferred, you should take your million dollars & go buy those blue chip stocks outright. 

you should avoid the DFN structure like the plague, since it is contingent upon an option trading infrastructure that neither you nor naiive DFN pumpster gibor can understand, even though the risks have been patiently explained on cmf forum many times, across a span of at least 2 years.

at the very least, by owning the actual stocks, the portf would have no risk of coming to an end in 3 short years.


----------



## gibor365 (Apr 1, 2011)

DFN.PR.A is much less risky than DFN...


> at the very least, by owning the actual stocks, the portf would have no risk of coming to an end in 3 short years.





> Both are non-callable and will not be called before December 1, 2019. Both funds are subject to further five year extensions beyond December 1, 2019. However should the termination dates be extended, shareholders would be offered a special retraction option using the same formula as windup.


Yes, OP can buy 15 pref directly, but he want up to 3 holdings


----------



## AltaRed (Jun 8, 2009)

tygrus said:


> I believe if you put 30% of your wealth in something like this and the market fills its pants like it did last fall, you would maybe see a $50-75k decline in your equity holdings. If you put all million in there, that could be as high as $200k. I can sleep at night being down $50k, but not being down $200k


I don't see the difference. A percentage is a percentage...seriously. As my portfolio grew, I could afford to take more volatility and I have over the past 20 years, i.e. I took less percentage volatility on $200k than I did on $1 miliion.


----------



## humble_pie (Jun 7, 2009)

but DFN preferred shares are *not* simple aggregates of 15 hi quality blue chip dividend-paying stocks.

DFN preferreds are part of a complex split share structure that involves heavy option trading. Recently the mandate was amended so the fund managers could trade in options other than those belonging to the 15 named stocks.

the purpose of this move was to hopefully beef up the return for the common dividends; however part of the preferred dividend is also contingent upon successful option trading.

some cmffers including gibor have continued to post a naiive enthusiasm for the preferred side of the split structure. This is due to their ignorance about options.


----------



## gibor365 (Apr 1, 2011)

just simple question, what should happen that investors at Dec 1, 2019 termination date, won't get back $10 per share? (if they don't want to extent)


----------



## tygrus (Mar 13, 2012)

AltaRed said:


> I don't see the difference. A percentage is a percentage...seriously. As my portfolio grew, I could afford to take more volatility and I have over the past 20 years, i.e. I took less percentage volatility on $200k than I did on $1 miliion.


Its psychological mostly. Something like $50k seems recoverable, something like $200k seems not so much.


----------



## jargey3000 (Jan 25, 2011)

gibor said:


> imho, it will me much more save to invest there that in 3 individual dividend stocks or index ETFs (as james suggested). At the end of term you get your money back $10/share , so if even interest rates go sharply up and DFN.PR.A price will decline, you still get back your principal + more than 5% in distributions along the road.
> Or did I miss something?


Is gibor correct? or not? I'd like to know...


----------



## tygrus (Mar 13, 2012)

jargey for what its worth and mostly sleep ok at night here is what I hold;

XRE at around 15% of my portfolio
XIU TSX index
XDV Dividend achievers

But I am not totally satisfied with the yields on these especially the index so I also hold FIE which is covered calls on the banks and holds the preferreds ETF as well and for a little extra yield and some US exposure I hold Canoe EIT income fund. 

I dont hold individual energy because everything in canada is already linked to oil.

I also hold no gold because it has no utility and I hold no bonds either because that just gives the govt sanction to raise taxes. How else will they pay the yield. I choose to starve that beast.


----------



## gibor365 (Apr 1, 2011)

jargey3000 said:


> Is gibor correct? or not? I'd like to know...


I also would like to know 

As per prospectus


> The Company’s investment objectives with respect to the Preferred Shares are (a) to provide
> holders of the Preferred Shares with fixed cumulative preferential monthly cash dividends in the amount
> of $0.04375 per Preferred Share; and (b) on or about the Termination Date, to pay holders of the Preferred
> Shares $10.00 per Preferred Share, which was the issue price thereof on the initial public offering of the
> Company, through the redemption of each Preferred Share held on the Termination Date.





> dividends received on the stocks held in a Split Share Fund’s portfolio are
> used to fund the fixed, cumulative monthly payments made to the Preferred
> shares. Any excess dividend income plus option premium received from
> covered call writing is used to fund the targeted monthly payments to the Class A
> shares.


The risk


> permit the Company to be terminated in the discretion of Quadravest prior to any
> scheduled Termination Date if the Preferred Shares or the Class A Shares are delisted on
> the TSX or if the net asset value of the Company declines to less than $5,000,000


Now Total Net Assets: $506,362,205 and I don't think any of 15 gonna be delisted on the TSX


----------



## jargey3000 (Jan 25, 2011)

Re DFN ... here's an article from Rob Carrick (I generally like what he has to say in his columns) .... from 2010 (6 years ago):
http://www.theglobeandmail.com/glob...nt-yield-comes-with-questions/article1462085/


----------



## andrewf (Mar 1, 2010)

The preferred only aspires to return $10 at the redemption, there is no guarantee. If the shares of the underlying fall by 50%, it begins to eat into the value of the preferred shares. Look at what happened in 2008/'09.


----------



## gibor365 (Apr 1, 2011)

jargey3000 said:


> Re DFN ... here's an article from Rob Carrick (I generally like what he has to say in his columns) .... from 2010 (6 years ago):
> http://www.theglobeandmail.com/glob...nt-yield-comes-with-questions/article1462085/


He talks about DS that is analogue of DFN , I was talking about DFN.PR.A , it's yield ranges from 5 to 5.3% that probably even less that average yield of those 15 pref stocks


----------



## Numbersman61 (Jan 26, 2015)

I like the recent rate reset Preferreds issued by the major banks (not second tier) -pay 5.5% until reset time in 2021. If interest rates are high at reset time, you know the shares will be redeemed at par.


----------



## jargey3000 (Jan 25, 2011)

gibor said:


> He talks about DS that is analogue of DFN , I was talking about DFN.PR.A , it's yield ranges from 5 to 5.3% that probably even less that average yield of those 15 pref stocks


Yes... fair enough... are they both managed by the same manager?


----------



## gibor365 (Apr 1, 2011)

andrewf said:


> The preferred only aspires to return $10 at the redemption, there is no guarantee. If the shares of the underlying fall by 50%, it begins to eat into the value of the preferred shares. Look at what happened in 2008/'09.


Even though DFN.PR.A declined about 20% , they continue paying same distributions
DFN dropped about 60% and also still paid same distributions, I assume that NAV still was above $15 (or they would stop paying)

Interesting to see what would happen if termination date for both would be in fall 2008.... would they pay $10/share or not...

This is why I'm asking what should happen that they wouldn't be able to pay back $10/share and what are the chances


----------



## gibor365 (Apr 1, 2011)

jargey3000 said:


> Yes... fair enough... are they both managed by the same manager?


Yes, bot isssued by quadravest...
You may find several old articles about DFN/DFN.PR.A from James Hymes


----------



## humble_pie (Jun 7, 2009)

jargey3000 said:


> Is gibor correct? or not? I'd like to know...



the quoted text is the company literature, which some cmf members are apparently willing to believe.

others on here have extensively discussed this particular split share holding, with all its option trading complexity, very many times in very many threads, across more than 2 years.
.
jargey if you are intending to manage $1 million all by yourself, imho you have no choice other than to pay attention to threads like the above-mentioned. You should be able to understand these threads by yourself. You personally should have made an effort to learn how the DFN hybrids are constructed, when the threads were being discussed here some time ago. Otherwise - if not willing to study seriously - perhaps you could give these hybrid investments a pass?

as i mentioned, there are many threads, across at least two years, to which i & others have contributed painstakingly & accurately. In particular i recently offered a detailed explanation of how the DFN-type covered call protocol - ie selling 30-60 day calls one increment above market - can backfire in a rising market.

the fact that the quadravest managers were recently authorized to trade options in other stocks, not just the 15 blue chippers named in the prospectus, increases the risk.

truly it looks a bit outrageous for yourself & gibor to appear here, so late in the game, & demand to be personally spoon-fed answers for your investment problems.


----------



## gibor365 (Apr 1, 2011)

HP, yeah, sure u r extremely smart , esp in option trading :biggrin: 
however, can you answer simple question,


> what should happen that they wouldn't be able to pay back $10/share and what are the chances


 


btw, good summary by Ecletic12 on previous DFN thread 


> I would also expect discussions of valuation / risk to consider when the Class A shares suspend the dividends but little to nothing comes to mind in the thread.


and than HP wrote


> there are actually several threads dating back years about the DFNs & all of those other threads conclude that the preferred is OK but the common is dodgy


----------



## My Own Advisor (Sep 24, 2012)

AT&T, PG, BNS. With the currency exchange, you'll get your 5% yield.


----------



## humble_pie (Jun 7, 2009)

^^

gibor your "simple" question has been answered countless times .each:

... if the optioned structure is harmed, chances of a rulebook winding-up are also harmed ... 

the reason you keep stopping at this, gibor, is that it seems you refuse to grasp anything about option trading. This leaves you with 2 basic choices: 1) accept the company propaganda (which you've apparently done), or 2) avoid the stock.

it's easier for someone like myself to own the DFN preferred because i'll have something of a forewarning if or when the options get into trouble. But will you have this forewarning? i think not.

as for jargey, he'd likely be able to sleep a tad better if he owned the actual underlying stocks instead of the hybrid product.


----------



## gibor365 (Apr 1, 2011)

> your "simple" question has been answered countless times


you repeat it many time, but no, it hasn't been ... 



> i'll have something of a forewarning if or when the options get into trouble


 and how would you know what options issuer gonna trade?!



> AT&T, PG, BNS. With the currency exchange, you'll get your 5% yield.


 this is actually what I'm doing, only not with 3 stocks , I'd say to have only 3 stocks it's risky , I prefer to hold bunch of dividend kings/aristocrats/champions/contenders 

DFN.PR.A is just another alternative , as OP asks about 3 holdings.


----------



## jargey3000 (Jan 25, 2011)

_...z-z-z-z-z-z-z-z-z-..._


----------



## RBull (Jan 20, 2013)

jargey3000, what are you going to do? :biggrin:


----------



## humble_pie (Jun 7, 2009)

i imagine he'll stay with his advisor .each:

they'll give him a little gambling money for running around at cmf forum now & then, you know how it goes


----------



## Video_Frank (Aug 2, 2013)

RBull said:


> jargey3000, what are you going to do? :biggrin:


Start another thread, of course.


----------



## tygrus (Mar 13, 2012)

Next thread will be Where do I put $5,000 for a quick triple? :cool2:


----------



## jargey3000 (Jan 25, 2011)

RBull said:


> jargey3000, what are you going to do? :biggrin:


there's some good info.& commentary here rbull. I'm glad i started this thread...


----------



## gibor365 (Apr 1, 2011)

tygrus said:


> Next thread will be Where do I put $5,000 for a quick triple? :cool2:


This will be BS thread  But current thread is a good one. (didn't read all threads by OP). I personally won't intend to sell all my dividend stocks to buy DFN.PR.A , but it's a possibility that that may have sizeble position with DFN.PR.A esp with a new money


----------



## Moneytoo (Mar 26, 2014)

tygrus said:


> Next thread will be Where do I put $5,000 for a quick triple? :cool2:


Nah, he already bought Netflix for half a day once - and sold it when it went down 2% or so lol I'm betting on another rich neighbor with 2 million - I think jargey is a community financial advisor


----------



## 1980z28 (Mar 4, 2010)

1 million,wow that is a lot of cash to sit on


----------



## marina628 (Dec 14, 2010)

Here is what I did and my ROI :
Portfolio #1 ENB ,MSFT ,T,TD,FB,TDB902 , 3 year ROI is 48.45% 

Portfolio # 2 BNS ,CM,DIS,ENB,FTS,RY,TD,TDB911 3 YEAR ROI 32.87
Started investing non registered Jan 2013 and this is the numbers as of today.


----------



## marina628 (Dec 14, 2010)

oops if i had to go with 3 only i would go with TD ,DIS ,FTS , personally I like FB for long term can see it doubling in next 5-10 years.


----------



## jargey3000 (Jan 25, 2011)

marina628 said:


> Here is what I did and my ROI :
> Portfolio #1 ENB ,MSFT ,T,TD,FB,TDB902 , 3 year ROI is 48.45%
> 
> Portfolio # 2 BNS ,CM,DIS,ENB,FTS,RY,TD,TDB911 3 YEAR ROI 32.87
> Started investing non registered Jan 2013 and this is the numbers as of today.


nice! is past performance any indication of future returns?


----------



## My Own Advisor (Sep 24, 2012)

I think for some of marina's picks, yes, long-term.


----------



## StockTrader (Apr 21, 2015)

I'd buy some low-cost ETFs (IWDA, EEM,...) and use the value-averaging approach suggested by Edleson to mechanically time the market. The approach is gaining traction the last couple of years and there's some Excel templates available online to implement it. 

See for example (bottom of the page):

 http://breakingdownfinance.com/finance-topics/modern-portfolio-theory/value-averaging/


----------



## tygrus (Mar 13, 2012)

Simply put, I would never put a large sum of my wealth into something I didnt have at least some control over. The stock market doesnt fit that bill. The market is being heavily influenced by externalities and HFT


----------



## marina628 (Dec 14, 2010)

The absolute earliest we will touch this is about 12 years from now ,dripping everything and more than likely our kids will inherit these accounts.


----------



## RBull (Jan 20, 2013)

jargey3000 said:


> there's some good info.& commentary here rbull. I'm glad i started this thread...


That wasn't the question. :biggrin:


----------



## RBull (Jan 20, 2013)

humble_pie said:


> i imagine he'll stay with his advisor .each:
> 
> they'll give him a little gambling money for running around at cmf forum now & then, you know how it goes


You may be right, although I don't gamble and don't use an advisor. 



Video_Frank said:


> Start another thread, of course.


Without question. 



tygrus said:


> Next thread will be Where do I put $5,000 for a quick triple?


Yeah, maybe. We've seen most everything else.


----------



## GreatLaker (Mar 23, 2014)

jargey3000 said:


> Where would you suggest investing $1 million today


The answer for most CMFers should simply be: "The same way I already invested all my other millions!"
:biggrin:


----------



## Moneytoo (Mar 26, 2014)

GreatLaker said:


> The answer for most CMFers should simply be: "The same way I already invested all my other millions!"
> :biggrin:


I doubt I'd be able to buy a pre-construction 5 bedroom house in up-and-coming neighborhood of Toronto, close to subway and highways, for a million now - but would have the same question if we sold ours :biggrin: But won't be asking it on the forum - IMO with such amounts it's either know how to DIY or pay for advice


----------



## humble_pie (Jun 7, 2009)

RBull said:


> You may be right, although I don't gamble and don't use an advisor.



RBull i didn't mean you, of course you don't gamble, you know what i meant .each:


----------



## RBull (Jan 20, 2013)

humble_pie said:


> RBull i didn't mean you, of course you don't gamble, you know what i meant .each:


LOL, I know what you meant. 

In the strictest sense I guess all investing has an element of risk (or gamble) built into it.


----------



## humble_pie (Jun 7, 2009)

lol in these parlous times one could say that to draw the first breath of life, upon birth, is to gamble


----------



## Moneytoo (Mar 26, 2014)

Yeah I remember reading an anti-smoking article some years ago, which said - I'm not kidding - "the researchers have found that one out of every two smokers will die". This was the first (and so far the last) time I wrote to the author, asking: seriously? Only ONE out of TWO smokers will die? And the second one will live forever? I'll take my chances then I guess!  

To make this post somewhat thread-related - there was a GM article recently about smoking stocks getting hot again..


----------



## jargey3000 (Jan 25, 2011)

humble_pie said:


> lol in these parlous times one could say that to draw the first breath of life, upon birth, is to gamble


"parlous" - something else I've learned since joining CMF!


----------



## Mukhang pera (Feb 26, 2016)

jargey3000 said:


> "parlous" - something else I've learned since joining CMF!


A splendid word, seldom heard nowadays, more's the pity. Thank you hp for helping to restore it to its proper place in speech.


----------



## jargey3000 (Jan 25, 2011)

Mukhang pera said:


> A splendid word, seldom heard nowadays, more's the pity. Thank you hp for helping to restore it to its proper place in speech.


(originally,I thought he/she had mis-spelled "perilous". I was gonna nail him/her on it; til I googled it! That would've been percarious on my part:stupid: )


----------



## getliquid (Mar 2, 2014)

AltaRed said:


> Reaching for 5% yield in 3 stocks is a bit of a mug's game of a potential Black Swan. I would pick equal amounts of XDV @ circa 4.6% (or an equivalent) and ZRE (or equivalent) @ circa 5.7%. If no other income, that might also be virtually tax free depending on province.


what does @circa mean?


----------



## humble_pie (Jun 7, 2009)

circa is latin, it means "around"

@ circa = at around


----------



## getliquid (Mar 2, 2014)

humble_pie said:


> circa is latin, it means "around"
> 
> @ circa = at around


thanks!

I posted a question regarding putting investments into corporation, now assuming in op's situation with 1 million cash all invested for annual dividend withdraw, is it wise to put it in a corporation or keep it personal? Estate tax would be high with that amount and these days you can get sued for anything...


----------

