Image via WikipediaI mentioned in some past posts that I was waiting for a mutual fund transfer to land in my account and I am please to announce that over the past weekend, the cash lump sum had landed. It took over 3 weeks for both companies to execute on this process. The funny thing is that they are both in the same building in Toronto … Process is process though and I am glad all is done.
When I started working over a dozen years ago, I started investing small amounts with a financial advisor and over time I had an RRSP and RESP account with him. All the funds were invested in mutual funds. I did go through a few companies and my advisor was very nice to cover fees when I wasn’t happy with the mutual fund after a year or so. In the end, most of my RRSP and RESP are in the same mutual fund paying me 8% yield per year. The RRSP contributions stopped in favor of my employer RRSP defined contribution plan when it was introduced.
Impact of Transfer
The transfer of my mutual fund RRSP did cost me a fee of 4.44%. It was 400$ on a 9,000$ value. There goes a positive deposit in mutual fund company adding to their earning… However, with my dividend investing plan, the intention is to recover this relatively fast. I also will be taking a step back in my monthly/yearly dividend earnings in the short term since I was getting over 50$ a month from that investment. I am happy to take short term reduction in order to be positioned for a much better long term gain.
If you have been following my blog, I have shown interest in Coca-Cola (NYSE:KO) and Johnson & Johnson (NYSE:JNJ) for quite a while… and yet again I have not purchased them. When I research my investments, I also like to buy a company that is selling at a discount, especially if I can’t DRIP too many shares to average down the price in the event that it pulls back. Without further ado, the main company I purchased was Kimberly-Clark (NYSE:KMB) with a yield on cost of 4.21%. KMB is the maker of brands like Kleenex and Huggies if you are not familiar with them. It’s not a company as big as KO and JNJ but it’s still quite large at 28B$ with a P/E of 14. I personally give preference to companies with a P/E under 15. I had spent the last few weeks looking into all my options using my stock screening spreadsheet (see my stock screening post & share your thoughts!) and Kimberly-Clark was appearing like a good opportunity. They have increased their dividends every year for a long time now. Dividend Monk had a detailed analysis of the company as well.
As a Canadian, with the dollar at near parity, U.S. investments are very important to me as I doubt over time the Canadian dollars will ever stay above the U.S. dollars and it will probably pull back once the U.S. economy improves increasing the value of my investments.
The other small purchase I made was to take a position in a Canadian REIT – Cominar (CUF.UN). It provides some good and steady monthly dividend with a yield of 6.5%. I did look into White Rock Realestate Investment Trust (WRK.UN) with a yield of 8.56% but I just could not pull the trigger as the stock seem to be going up and down regularly. A little too much of roller coster ride for me. Even with that good yield. A drop in price would eliminate dividend earned in the short term … The price just wasn’t right. Anyone own WRK.UN?
Readers: Do you own KMB? Which REIT do you like and why?