Heres the monthly portfolio update for the BTI portfolio which consists of 2 accounts: a TFSA account and a Non-Registered account.
The TFSA is currently holding the following stocks (October 29 closing prices):
(A Tax Free Savings Account is an account where your capital gains are exempt from taxes)
Market Value: 11780 + 958 in Cash = $12738.00
The Non-Registered account is currently holding the following stocks:
Market Value: 12685 Margin Used: 6253 = NET: $6432.00
BTI Portfolio Value: 19170$
YTD Results from January 1 2010
TSX at start: 11866 @ October 31: 12676 Change: +6.82%
BTI at start: 12936 @ October 31: 19170 Change: +48.19%
M/M Results from October 1 2010
TSX at start: 12368 @ October 31: 12676 Change:?? +2.49%
BTI at start: 18096 @ October 31: 19170 Change: +5.93%
HELOC Portfolio Performance
The HELOC portfolio is basically a non registered account with money borrowed from my home equity line of credit. *Please take note* that this is money I can afford to lose. The impact of losing this money would be equivalent to skipping a lump sum payment on my mortgage for 1 year. I will use the banks Performance tool for the monthly results because it takes into account deposits and withdrawals. Now that youve called me crazy and shook your head, on to the results:
For the purists amongst you, heres my sector diversification:
For the record, my outstanding balance on the HELOC is still $18500, so basically I am up about +6057$ so far if I sell everything at the closing prices above. This should be the peak for the number of stocks held in the HELOC portfolio as it will start winding down before the end of November.
To be honest with you, I did not expect to beat the index this month due to my natural gas exposure. I guess the profitable trades of October and a rising market more than offset the paper losses from Delphi Energy and Perpetual Resources. In any case, as the cold sets in and natural gas prices stabilize, I expect to squeeze out a little bit of profit or exit at no loss in the near future from my natural gas exposed companies.
I am very satisfied with my results so far especially in the HELOC portfolio where in less than 6 months I was able to register +40% in return. Of course, this is not necessarily the final tally as we go into an uncertain November. Heres an explosive cocktail of events that can endanger a lot of what has been accomplished so far:
- Tuesday November 2, 2010: US Elections
- Wednesday November 3, 2010: Fed expected to announce his QE2 steps
- Friday November 5, 2010: Jobless report
- Lots of other economic data and earnings releases by major companies.
- I will be on off-site training for 3 days, November 2-4.
Being on off-site training, while great for the CV, is really a bad timing for my portfolio as it will be hard for me to follow up on the market. I will have to find a way to adapt to this situation. We can potentially see wild fluctuations of 3-5% in either direction depending on the results.
No huffs and puffs following another monthly victory, just focusing ahead to secure the results accomplished so far. I remain firmly grounded in 2 important guidelines: never underestimate the market and never grow overconfident. This is the market where prices go up and down, where losses are inevitable since no one can hit a perfect streak of winners.
My banks low commission special ends on November 30. I might add a little bit more REITS to the portfolio by then but overall the portfolio composition is complete. The dividends will easily cover interest + principle even if Perpetual Energy decides to cut the dividend altogether (I am expecting a partial cut). I will discuss the subsequent plans for the HELOC in more detail in the next portfolio update.
The BTI portfolio has been stable overall. I am glad I sold Atikwa Resources from my TFSA as I shifted this level of risk to Primary Petroleum. Delphi Energy is the one that hurt my non-registered account this month along with Perpetual Energy the most. Fundamentals have not changed and with winter at the door their share price will recover as natural gas usage rises with falling temperatures.
The HELOC portfolio challenge has been very exciting and I look forward to the final month. No matter what happens in November, I will react and adapt to the situation as the market will always end up stabilizing. Discipline in carrying the plan is of paramount importance while emotions should remain systematically subdued.
How has your portfolio done so far this year? What kind of volatility are you expecting for November?