Portfolio Objectives for 2011

It’s been an exciting year for my oil and gas investments which performed superbly given all the volatility that we witnessed. We saw the introduction of a new portfolio based on my HELOC (home equity line of credit i.e. borrowed money) which quickly rose to the forefront as the spearhead of BTI operations. Looking back to 2010, the best part is not the final % rate of return, it is realizing that all the hard work I put tracking 100+ oil and gas stocks paid off by providing a constant stream of opportunities. In fact, there always were more opportunities out there than what my capital was able to handle which is a positive problem to have on hand. Let’s move on to the objectives of next year.

planning the next move

planning the next move

2011 Objectives


  • Primary Objective: Beating the Index
  • Current Monthly Dividends: $172
  • Monthly Dividend Target: $200
  • Reduce the $18,500 outstanding HELOC balance using profits

BTI Non-Registered Account

  • Primary Objective: Beating the Index
  • Current Monthly Dividends: $45
  • Monthly Dividend Target: NA
  • Transfer $7,500 into the TFSA

BTI Tax Free Savings Account (TFSA)

  • Primary Objective: Beating the Index
  • Current Monthly Dividends: $26
  • Monthly Dividend Target: $52
  • Fill $7,500 contribution room

Even though the moral is high and the troops are ready to rumble again in 2011, notice how I did not assign any numbers representing a target rate of return. That is because no one knows what is coming this year; it will certainly have its fair share of volatility and potentially 1 or more “black swan” events. Never underestimate the market and never overestimate your skills no matter who you are or what your ROI was in the past. All I know is that my daily routine will not change as I actually enjoy spending time following my sector of interest.

Theoretically, I could sell everything and sit on the gains for 2 years and I will get to claim that I beat the index since chances of the market going up 50% or more in the next 2 years are slim. However, I prefer using this “gap” between me and Mr. Market to stay ahead and continue my investment activity as I enjoy the challenge and everything it entails.

The HELOC account will be the workhorse of my investment activity in 2011 as the non-registered account should transfer 75% of its money to the TFSA. As you may know, my main cash flow goes on financing my mortgage lump sums and not my investment activity (except RRSPs). There are 2 advantages to this money transfer:

1.      The TFSA investment activity will hopefully generate increasing tax-free profits.

2.      The Non-registered account will have less than $3,000 left which will limit my margin usage to a very low amount so most of the margin will be carried by the HELOC account and covered by the dividend income.

National Bank will finally be following the competition by announcing a $9.95 commission per trade if the assets are bigger than $50,000. The HELOC account will certainly benefit from this pricing as I never intended to continue my activity in that account if I had to pay $30 per transaction once my low transaction fee promotion ended.

The long term plan (5 year plan)is to increase the monthly dividends by reinvesting profits in dividend payers. I plan to build a consistent stream of passive income that will one day in the future potentially become the main household income (it’s good to dream!). There’s a long way to go as there’s no such thing called “easy money” out there!