Investing Strategy with Transfer Agents

Transfer AgentsWho’s got boat load of cash to invest early on in life? Who’s got loads of cash to invest after paying all the bills and supporting a family? We’ve all heard of pay yourself first so that you can manage to save some money for the long term. In fact, many mutual fund companies will want to help you do that because it can be easy and you can start with little money. I was so frustrated with that process and the lack of performance from mutual funds that I was determined to move on to stocks. I finally did it a couple of years ago and moved away from mutual funds. That’s when I was introduced to the Transfer Agents: Computershare and CIBC Mellon.

Long before buying stocks, I was a dividend and income investors as I believe in the following principles of investments:

These tenants make up the basis for growing my nest egg and reaching my goal of Financial Freedom @ 45.

Transfer Agents Strategy

You may have gotten a hint of my strategy in my Guide to DRIPing post last week and today I’ll go over it. It’s pretty simple in fact. As I started my post, I wanted to indicate that, like many others, I don’t always have thousands of dollars to initiate positions. On the other hand, I can usually find $100 to $200 a month on top of my usual RRSP and RESP contributions to invest. The small amounts I have is what makes the Transfer Agent strategy possible as you can invest small amounts at no cost – and avoid mutual funds. The only downside is that you can’t really pick the purchase price. Not having a say in the purchase price is why you need to be very careful on the companies you elect to invest in.

Company Selection

I have been pretty selective (or at least I’d like to think that I was selective) in the companies I have picked. My rule is that is must be a blue chip (with exceptions), and must provide an essential service needed by society on top of being well managed companies. As you can see in my monthly Dividend Income reports, I own the following sectors with the Transfer Agents.

Here are my current holdings with the transfer agents and I don’t have plans to add any at the moment.

Investment Size

The most important factor to take away with the Transfer Agents is that they are a tool to allow me (and you) to invest small amounts regularly. The fractional shares they provide is a benefits when you don’t have much to invest or to DRIP. Once a holding reaches $10K for example, the fractional shares may not have the same benefits. As I mentioned in my ‘Guide To DRIPing‘ post, my DRIP strategy will change when I have a larger amount invested in each holdings. At some point, my monthly and quarterly earnings will be enough to make better strategic investments for my portfolio.

My initial target is to grow each holding to $5K, at which point I may just transfer them to my discount broker account. I have 12 investments which total approximately $3,000 leaving me with $57K to go to reach the total target within the Transfer Agents.

There you go, slow and steady wins the race as they say. As you can see, the Transfer Agents are a tool to help me invest.

Readers: What’s your tool to invest small amounts?

Disclamer: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your decision at your own risk – see my full disclaimer for more details.

Image: Grant Cochrane /

5 Responses to "Investing Strategy with Transfer Agents"

  1. I haven’t used a transfer agent, but it seems like a good way to DRIP. Currently, I’m buying “no fee” ETF with my small contribution. I purchased 10 shares of VWO last month. This works ok for now. I can sell the ETF and then buy some shares when the sum hits 5k for example.

  2. I have bought some investments by this method, but I am focusing on my RRSP investments and of course this method is not available. Do you buy individual stocks in your RRSP account ? I use The Canadian Shareowner low cost investing program for that and it is excellent. It has mandatory dividend reinvestment at no cost and uses fractional shares.

  3. Again, I really like the list of stocks you have setup with transfer agents. Great job PIE.

    You’re absolutely right in that it’s very difficult for people to amass large chunks of change to invest at a young age. Often, priorities are set to pay off student loans, mortgages, while trying to park funds additional into RRSPs or TFSAs.

    In terms of investing small amounts of money, I believe the investor would be hard-pressed to find something that beats the power of Full DRIPs via fractional share purchase. Long-term, the investor is poised to make impressive gains.

    Great post!


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