Monday, September 29, 2014

RRIFs and LRIFs

For RRSPs, you must convert it into a Registered Retirement Income Fund (RRIF) or life annuity in the year you turn 71, but you do not have to start that income in the year you turn 71. It must start in the following year. For Locked-In RRSP this same rule applies.

You might want to convert your RRPS or Locked-in RRSP before you have to. This might especially apply to the Locked-in RRSP if you want to take money from it. With the RRSP you can take funds out at any time. However, money from these funds is taxable income and there can be withholding tax taken at the time of withdrawal, depending on how much you take out.

It would seem that you can convert your locked-in RRSP to a LIF at the lessor of age 55 or at the age you could have obtained a pension from the original pension plan. There are current rules that at conversion you can transfer part of your locked-in money to an RRSP or RLIF. These rules have changed so it is best to check with your financial institution when doing to conversion to know how much you can transfer if you want to do this.

For the minimum amount you must take from an RRIF or LRIF, see document from Canada Revenue Agency. Look at item 8 as this is the one that generally applies. However, all financial institutions will tell you what you need to withdrawal each year. This will occur in January as it is based on the funds value at the end of the previous year. The Tax Tips.ca site has information on minimum withdrawals.

For LRIFs there is a maximum withdrawal amount. The maximum payment is based on the LRIF's investment earnings for the previous year. The maximum income payment will be the greater of the amount earned under the LIF formula or your LRIF's investment earnings for the previous year.

On an Ontario Government site there are FAQs on Locked-in Retirement Income Funds (LRIFs). There is a lot of information on these products on the internet, but the variety of places you can go can sometimes be bewildering. A lot of the financial institutions have information, but you usually have to provide personal information to get at their information.

I have known people who have cashed in their RRSP or their RRIF to stop their OAS from being clawed back. You can do this, but you will pay taxes on the withdrawal probably at the maximum rate.

I personally do a budget for the follow year in November. I use my previous tax program to determine what additional taxes I need to pay for the current year and ask my financial institution to pay that tax amount as the withholding tax amount. I do my withdrawals from my RRSP and LRIF once a year in December of each year.

When I changed my Locked-in RRSP to a LRIF, I just changed the account. I kept all the investments in stocks that I currently held. When I have to change my RRSP to a RRIF I plan to do the same. That is keep the current stock and other investments I have in my RRSP in my RRIF.

The blogger Retire Happy has a lot of information on his site about RRIFs.

On my other blog I am today writing about Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Wednesday, September 24, 2014

Dividend Growth Stock Lists

I used to follow and number of Dividend Growth Stocks lists. I had used these lists to determine what stocks would be good to follow. However, I found that these lists were always changing as stocks were always being added or deleted.

Most of the Canadian lists had very low requirement to be added to one of these lists which was generally having increased their dividends each year over the past 5 years. They also only added stocks to the lists that that had very high market caps.

I have changed my mind about following these lists and do not look at them much anymore. Generally speaking, these lists were not a good source of stocks that I would want to follow.

If you want to know where some lists are currently, you can find the Dividend Achievers lists at NASDAQ. Information on the Select Canadian Dividend Index (NQCADIV) is here. The stocks in the list are here (see weighting tab.) Also see NASDAQ Broad Canadian Dividend Achievers Index (DACA) here.

The list of Dividend Aristocrats is now part of TSX site. Go to the "TSX Market Activity" and click on "Indices and Constituents" tab. Also, the blogger The Canadian Dividend Blogger puts out his own list of Canadian Dividend Achievers.

The Loonie Lover blog explains Dividend Aristocrats. Also, the Dividend Growth Investing and Retirement blog talks about his Canadian All Star List and allows you to down load his Canadian All Star List.

There are still a lot of people paying attention to these dividend lists.

On my other blog I am today writing about Canyon Services Group (TSX-FRC, OTC-CYSVF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Monday, September 22, 2014

Revenue is Important

Revenue is the driver for both earnings and cash flow. There can be long term problems if earnings and/or cash flow growth is higher than the growth in revenue. You can have lower growth in revenue than in earnings and/or cash flow for a long while sometimes, but eventually, either revenue growth will have to equal earnings and/or cash flow growth.

What can happen is the company can grow their revenue. If this cannot happen, then the growth in earnings and/or cash flow will have to slow to the growth in revenues.

Dividend growth is tied into this also. Dividends can sometimes outgrowth EPS and/or CFPS, but this also cannot go on forever. Either a company will have to increase EPS and/or CFPS or lower the growth in dividends.

On dividend growth companies on a long term basis, the stock price growth will keep pace with the growth in dividends.

On my other blog I am today writing about Wajax Corp. (TSX-WJX, OTC-WJXFF) .. continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Wednesday, September 17, 2014

Disagreeing About a Stock

I have gotten some really nasty emails and StockTwits replies when I have a report that could be construed to be unkind about a stock. Actually, it is probably because of the sound bite with StockTwits that sets people off because their remarks often show that my report was not read.

I know that some people take investing very personally, but I do not think it is so health be enraged about other people's remarks about a favourite stock. How can people be good investors if they act this way? The latest nasty I have received is for my report on Badger Daylighting. See G&M and scroll down to the bottom for StockTwits.

This latest salvo is actually quite mild to what I have received before. I am not quite sure about what the end game is for these people. Are they trying to intimate me? If so, let me just say that I am an old lady and it is hard to intimate old ladies. If they are trying to shut me up this also has not worked. Mind you I only blog about each stock once a year, so perhaps it looks like I am being quiet.

My "aw you poor thing, I was unkind about a favorite stock" may not be the best reply. However, the amount of anger and rage an unfavorable report can raise, is frankly, just stupid. Do these people not realize how a stock market works? For every buyer you have to have a seller and vice versa. So the market works because people have different opinions about stocks and when it is the best time to buy or sell.

Mind you, I am not talking about people who just disagree with what I have said. I have had emails and replies to reports where there is a difference of opinion. What I am talking about is when people get angry or even enraged because of what I have said.

On my other blog I am today writing MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Monday, September 15, 2014

Dividends Covering Costs

Last week I talked about another way to view dividends and it was to see how they covered the cost of purchasing stock. I decided to look at my portfolio and see what of my stocks I might have gotten for free or at a good discount. See my blog post about a possible different way of viewing dividends is here.

Coming up with how much of your stock costs can be covered by the dividend is not as straight forward as I initially thought I would be. The problem is that for a lot of stocks there is just not one purchase date and no further action. Some stocks I bought over time. Some stocks I sold part of my holdings and often because the stock value grew so that it was too large a portion of my portfolio. Some stocks had spin offs.

Here are the initial results. I hope to look at all my stocks this way.

Name Sym DPS % Pd Yrs H
Ag Growth International AFN $6.40 18.2% 2.85
AltaGas Ltd ALA $5.47 24.7% 4.77
Automodular Corp. AM $0.68 33.1% 2.64
Bank of Montreal BMO $51.73 710.6% 30.91
Barclays PLC (UK£, US$) BCS $19.00 72.0% 14.48
Barrick Gold Corp. ABX $0.41 2.2% 0.95
BCE BCE $60.26 381.9% 31.88
BCE BCE $25.08 69.1% 15.27
Bombardier Inc. BBD.B $1.68 310.7% 26.80
Canadian National Railway CNR $4.80 25.7% 9.15
Computer Modelling Group Ltd CMG $1.58 50.0% 6.14
Progressive Waste Solutions BIN $3.42 13.7% 6.80


The Titles I used have means as follows: DPS = Dividends per Share paid % Pd = Percentage of share cost paid by dividends Yrs H = number of years I have held shares to 2 decimals.

Trying to figure out what dividends I got from BCE is certainly not straight forward. I sold off some of my stock in 2005 and there were two spin off stocks of Nortel and Bell Aliant. I took into consideration the dividends from Nortel and Bell Aliant, but not what I got for Nortel and Bell Aliant stock I sold.

If for the first BCE stock, I included the price I got for selling the stock, as this stock was a spin off and could be considered like a dividend, the DPS comes to $66.75 and the % paid by dividends would be 423.02%. There is a bigger difference in my second set of BCE stock if I include the price for the spin off stock I sold. This is because for this second set of BCE stock, I sold Nortel shortly after receiving it as I had too much Nortel stock. In this case the DPS would be $171.24 and the % paid by dividends would be 471.81%.

Some stock has done better than others. Look at the figures for CNR. I have held that for 9 years and dividends have paid for 25.7% of my stock's price. For CMG, I have held this for only 6 years and dividends have paid for 50% of my stock's price.

On my other blog I am today writing about High Liner Foods (TSX-HLF, OTC-HLNFF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Wednesday, September 10, 2014

My Blogs

The first blog I have is about stocks and there I talk about individual stocks and this is updated 5 days a week, Monday to Friday, except for holidays. On my web site at spbrunner.com click the "stock" tab on the left and you will see a list of all the stocks I cover. If you click on a stock, you are shown all the reports I have done since 2008 on that stock. Also, you can click on the latest spreadsheet I have uploaded for that stock.

The next blog of about subjects related to investing talks generally about investing and economics. It is updated each Monday and Wednesday. When holidays occur on a Monday, I update this blog on Tuesday and Wednesday or Thursday of that week.

I do special blog entries at the first of each month. At that time I update my spreadsheet with current stock price and compare the current dividend yield to historical dividend yields. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield. I also compare the current dividend yield to the 5 year median dividend yield.

The last blog I have is about books is about books I read and is updated infrequently. Here I am trying to do something different from just more general book reviews. I do links to some good book reviews, but also provide links to talks by the author of the books I review. I think that listening to an author talk about his subject enhances the reading experience.

On my other blog I am today writing about Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Monday, September 8, 2014

Viewing Dividends

Taylor Muckerman of The Motley Fool Canada wrote an article called "Dividends - Is There Anything They Can't Do?" Below is the main part of this article. You can sign up for Motley Fool's free emails here.

Taylor Muckerman starts off by telling a story about a man asking for a discount at a coffee shop. Of course he was refused. However, Taylor Muckerman goes on to say:

"As an investor, though, it wasn't the fact that he stepped outside of his "zone" that caught my ear. It was that he was told "no." After all, there are many places where this same type of question need not even be asked because there are more than a few companies out there that will give you a "discount."

In this case, however, the discount happens to be even more important...because it is a discount on an actual share of ownership in a living breathing company - not just some latte you'll likely be purchasing again tomorrow. And, just like what you are buying is different, the nomenclature differs, as well. Rather than a "sale," this percentage off is referred to as "yield."

When thinking about dividends, some people might not associate its yield with a percentage off of their sales price, but that is exactly what it is. You see, there are two ways to look at a dividend payment. It can either be looked at as income on top of share price appreciation. OR, it can be used to effectively reduce your purchase price, or your cost basis (to be clear, for tax purposes, dividends are taxed as dividends and are not deducted from your cost basis).

Now, while I have personally yet to hear of someone holding onto a dividend payer for long enough, it is wholly possible to lower your theoretical cost basis to $0.00 once your stream of dividend payments has reached your buying price. That's right. You could eventually become a partial business owner, essentially, for free."

I have decided to look at my portfolio and see what of my stocks I might have gotten for free or at a good discount. I will explore this more next week.

On my other blog I am today writing about Calloway Real Estate Investment Trust (TSX-CWT.UN, OTC-CWYUF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.