Introducing the HELOC Portfolio

Today I will introduce my HELOC portfolio. As I explained yesterday, this portfolio will focus mainly on dividend paying stocks for a long term hold. The funds will be borrowed from my Home Equity Line of Credit. The plan is to gradually grow its current holding up to 25000$ during the market weakness of this summer and let the dividends pay the loan in the long run. The HELOC was ready a month ago and I had the chance of doing a small number of transactions since then. We will take it from here by introducing the current holdings and posting all subsequent transactions.

Current HELOC portfolio:

Please take note that Paramount Energy Trust (TSE:PMT.UN) converted into a corporation as Perpetual Energy (TSE:PMT). My shares have not been updated yet so the price shown does not reflect the last closing price.

What I dont like about this table is the commission added to the purchase price while I like to calculate it only after a buy/sell transaction is completed. Anyhow you will notice 2 sets of stocks, dividend payers and non dividend payers. The dividend payers are core holdings since their main job is to cover the interest.

Daylight Energy and Perpetual Energy both pay 45$/month in dividends. The current outstanding balance for the HELOC is 12500$ which at 2.5% costs 26.05$/mo in interest. I am looking to double the core dividend holdings during the next leg down since at the moment sentiment seems to have positively shifted because of earnings expectations.

Since the core holdings are able to cover the interest expense that leaves a chunk to invest in other stocks as I see fit. I am sure you are not surprised to see Spartan Energy (TSE:SPE) and Great Panther Silver (TSE:GPR) in there. Energy and Precious metals is what I am comfortable investing in. At some point I would like to add a REIT for diversification purposes. I will be investing in non-core stocks based on upcoming catalysts with a short holding period.

I am hoping that by the end of August, the portfolio would be fully functional. With earnings season starting, I am expecting?? a rising market for a short period. This will give me the chance to re-balance the BTI portfolio that is currently locked in because of the last meltdown.

Only 1 out of the 4 mentioned stocks have been featured, I will be featuring the dividend payers starting in next weeks stock pick.

Do you have any comments or suggestions regarding the plan or the new portfolio?