This morning I sold another chunk of my iShares bond ETF, CLF, and purchased 100 shares of Power Financial Corporation First Preferred Shares, Series S, at $25 per share. The current yield is 4.80%, just slightly higher than the common shares of PWF. The shares are rated Pfd-1 by DBRS, and P-1 by S&P, which are considered highest quality ratings. Preferred shares (PF Shares) from Canada’s biggest companies are rarely offered with TD Waterhouse, and these new issues are usually gone within 20 to 30 minutes. I have been planning for several months to start adding PF shares to my portfolio, so when I received the email for PWF PF Series S this morning, I moved quickly. Only a few minutes after purchasing, the issue was closed. The shares were bought at the standard issue price for PF shares at $25 per share. This is my first purchase of preferred shares for my portfolio, and likely there will be more in the years to follow, especially in retirement. Power Financial Corporation (PWF) Power ...

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[easyazon-image-link asin="0965175081" alt="The Single Best Investment: Creating Wealth with Dividend Growth" src="http://ecx.images-amazon.com/images/I/514aHF5BDrL._SL500_.jpg" align="left" width="200" height=303"]This week markets continued their meteoric rise, after a recent slump in May. As I mentioned in my last post, with cash to invest it was getting difficult to find stocks that were attractively priced. In the end I simply decided to top-up current holdings, and keep the cogs in the dividend and bond machine moving. I’m pretty confident with my buys of BNS, RY and topping up on CLF. Coca-Cola (KO) split their shares in a 2:1 for stock split last week, putting a smile on the face of many long-term dividend investors! For new investors it makes KO much more affordable per share as well – though watch for a possible post-split-bounce. Cisco Systems (CSCO) exceeded analysts’ expectations, and the price surged nearly 10% from Thursday lows of $17.35 to close Friday at $19.06 ...

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Buy Low and Sell High is a great investment tenet. One of the biggest dilemmas with this investment doctrine, is when markets are down, it doesn’t always mean you have the funds to invest. Case in point, in May 2012 the TSX hit its 52 week lows. Although I have no way to know where market tops or bottoms are, I would love to have bought into some great stocks at that time. If I am already fully invested, and don’t have any investment capital, then it really makes no difference whether markets are down or up. While I don’t like buying equities in a rising market, I certainly don’t see the benefit of sitting on cash either. I like to get my distributions, dividends, and any potential for gains working for me sooner than later! For this reason I deploy capital when I have it available, rather than worrying about whether I am paying too much or getting a bargain – in other words I dollar cost average my positions over time. My good friend the Dividend Mantra, who purchases nearly ...

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In a previous post, The Safety of Short Term Bonds, I pointed out  the merits of holding short-term government bonds in a balanced portfolio. The underlying reason for doing so, is short-term bonds are an ideal hedge against stock market volatility. Short term bonds generally move in the opposite direction of the stock market – in other words they are inversely correlated. As investors, we saw this effect over the last three weeks as markets declined, and bond funds and bond ETFs gained value. We also saw this occur during the Japan Earthquake, and also last spring 2010 as markets also temporarily declined. It’s called flight to quality and safety. And there is no doubt that market declines will occur again. Yield to Maturity My previous post focused on one specific product, Claymore 1-5 Year Govt. Laddered Bond ETF (CLF-TSX), a short-term bond ETF (Claymore CLF). It holds a 1-5 year ladder of primarily Government of Canada and provincial bonds. This is about as safe as you can ...

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Bond funds have been out of favour these days, especially with the threat of rising interest rates. With dividend stocks paying juicy yields, and returning phenomenal capital appreciation, investors have been reluctant to purchase fixed income securities. Investors forget that when times are good, that all of that can change on a dime! This week the TSX and S&P 500 are already showing signs of a correction, with some dividend stocks off 10% from their highs. This should be a reminder to investors of why asset allocation is important. That’s where short term bond holdings come into play! Bonds with a duration of 1-5 years, are in opposite movement with the stock market – in other words they are uncorrelated. When markets fall, short term bond funds do very well. And unlike corporate bonds or long-term bonds, short term bonds are less sensitive to interest rate increases. Claymore 1-5 Year Govt. Laddered Bond ETF (CLF) is a short-term bond ETF, traded on the TSX, and a core ...

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