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outside of a triplex, my only other investments are in dividends mixed in my RSP and TFSA.

I mostly hold Brompton Lifeco Split (LCS-T) (14% yeild), and a boatload of GII.UN (around 22% yeild).

I have 5K to put into my TFSA for this year, and am looking for a return over 12%. Any recomendations?

My strategy is not buy low sell high, but reap dividends forever, sono penny stocks please
 

Mencken

Well-known member
Oct 24, 2005
1,047
40
48
If you are looking at a yield target of 12% you don't have many candidates on the big boards. And if you find any there will be some sort of a story. Since most of the trusts have now converted out there is a lot less high yield, and by high yield I mean 7-9% not 12%.

Probably better to take 5% with some potential for growth than look for those over 10% that mostly have potential for shrinkage.

outside of a triplex, my only other investments are in dividends mixed in my RSP and TFSA.

I mostly hold Brompton Lifeco Split (LCS-T) (14% yeild), and a boatload of GII.UN (around 22% yeild).

I have 5K to put into my TFSA for this year, and am looking for a return over 12%. Any recomendations?

My strategy is not buy low sell high, but reap dividends forever, sono penny stocks please
 

hinz

New member
Nov 27, 2006
5,672
1
0
Power Corporation of Canada (POW)/Power Financial (PWF) in TSX

Exelon Corp (EXC) below $40 at NYSE

Again do your own research and get qualified financial adviser before making any financial decision. :)
 
B

burt-oh-my!

You are at risk with your BromptonLifeco Split on several fronts.

This is a split share, meaning there is leverge inherent in the capital shares - about 2.8 times in your case.

The dividend can and will be cut to zero if the combined NAV falls to below $15, and it is only $15.26 now. To fall below $15, the shares don't even need to fall - just the payment of the preferred shares dividends will see to that. But falling to below $15 requires only a 1.6% fall in the underlying assets share prices.

Next, the NAV of the capital shares is $5.26 - so at $6.00 current share price, the shares arre trading at a premium of about 12% and , they will eventually lose about $0.75 relative to their NAV when this thing expires, which it will in 3 years. That represents about 3% per year from here.

Finally,the structure of the split share structure means that preferred shares get 5.3% in priority to your dividends, so you need the shares to make 5.3% (preferred dividends) plus 3% (premium degradation) plus MER of 0.6%, plus probably a few other fees = at least 8.9% per year for you to make money. Now, that is not quite right because every dividend you receive in the meantime is a plus to you, but overall I would never buy a closed-ended fund at a premium.
 

wet_suit_one

New member
Aug 6, 2005
2,059
0
0
You are at risk with your BromptonLifeco Split on several fronts.

This is a split share, meaning there is leverge inherent in the capital shares - about 2.8 times in your case.

The dividend can and will be cut to zero if the combined NAV falls to below $15, and it is only $15.26 now. To fall below $15, the shares don't even need to fall - just the payment of the preferred shares dividends will see to that. But falling to below $15 requires only a 1.6% fall in the underlying assets share prices.

Next, the NAV of the capital shares is $5.26 - so at $6.00 current share price, the shares arre trading at a premium of about 12% and , they will eventually lose about $0.75 relative to their NAV when this thing expires, which it will in 3 years. That represents about 3% per year from here.

Finally,the structure of the split share structure means that preferred shares get 5.3% in priority to your dividends, so you need the shares to make 5.3% (preferred dividends) plus 3% (premium degradation) plus MER of 0.6%, plus probably a few other fees = at least 8.9% per year for you to make money. Now, that is not quite right because every dividend you receive in the meantime is a plus to you, but overall I would never buy a closed-ended fund at a premium.
Good info!
 

splooge

New member
May 5, 2010
928
0
0
San Jose, CA
Dividends! Now we are talking!! I'll upload my portfolio of DRIPs, DPPs, DRPs, SPPs when I get a chance tonight after the hockey game or so...
 

Timbit

Tasty and Roundish
Jan 7, 2002
1,696
29
48
In Ecstacy
You are at risk with your BromptonLifeco Split on several fronts.

This is a split share, meaning there is leverge inherent in the capital shares - about 2.8 times in your case.

The dividend can and will be cut to zero if the combined NAV falls to below $15, and it is only $15.26 now. To fall below $15, the shares don't even need to fall - just the payment of the preferred shares dividends will see to that. But falling to below $15 requires only a 1.6% fall in the underlying assets share prices.

Next, the NAV of the capital shares is $5.26 - so at $6.00 current share price, the shares arre trading at a premium of about 12% and , they will eventually lose about $0.75 relative to their NAV when this thing expires, which it will in 3 years. That represents about 3% per year from here.

Finally,the structure of the split share structure means that preferred shares get 5.3% in priority to your dividends, so you need the shares to make 5.3% (preferred dividends) plus 3% (premium degradation) plus MER of 0.6%, plus probably a few other fees = at least 8.9% per year for you to make money. Now, that is not quite right because every dividend you receive in the meantime is a plus to you, but overall I would never buy a closed-ended fund at a premium.
What Burt said.

You've got to realize that the market is asking for that kind of yield for a reason - risk. The market is generally (generally) smart - it asks for reward based on it's assessment of risk - the higher the perception of risk, the higher it demands of the yield. If TBills rates are 1 or 2%, longterm bond rates at 4 or 5% and dividends at our biggest financial institutions paying 3 - 4.5%, you've got to wonder why a company is paying substantially above that.

Trusts are a little different - their structure was to pay out their revenue as income to shareholders - they typically were not set up to retain earnings for future growth, so yes, you could expect a higher yield. But as the old saying goes - Buyer beware. Do your homework or have a financial professional do it for you.

Timbit
 

danmand

Well-known member
Nov 28, 2003
46,353
4,776
113
So, what's up with GII.UN (24%)
 
B

burt-oh-my!

So, what's up with GII.UN (24%)
Press release:

One of the objectives of Global DIGIT II was to provide unitholders with a monthly distribution which, starting March 2010, would have been an amount equal to the five-year government of Canada bond yield plus 4.0% to 4.5%. However, in light of the amounts withheld by Deutsche Bank AG, Canada Branch ("DB") in relation to credit events notified in November 2009 to Global DIGIT II, until the final determination of the amount of losses from such credit events, distributions will be approximately equal to the five-year government of Canada bond yield plus a spread of 1.10% to 1.71%, or $0.03 to $0.035 per unit.

Global DIGIT II also announces that the net asset value ("NAV") per unit as of February 15, 2011 was estimated to be $0.17.

The NAV on a particular date is equal to the aggregate value of the assets of Global DIGIT II, less the aggregate value of its liabilities. Substantially all of the assets of Global DIGIT II consist of cash and three credit default swaps entered into with DB and the related collateral.

And here:

http://info.fbn.ca/fbn/cda/content/0,2650,divId-2_langId-1_navCode-10471_navCodeExTh-0,00.html

Global Diversified Investment Grade Income Trust II (TSX:“GII.UN”)provides an economic interest in an equity tranche of credit default swap agreements in respect of portfolios of mortgage-backed securities, asset-backed securities, structured finance securities, synthetic corporate exposures and other fixed-income securities.

**

Looks like something NOONE knows what is in it. NAV of only $0,.17 is puzzling.
 

danmand

Well-known member
Nov 28, 2003
46,353
4,776
113
RYL Royal host is still giving a good dividend after having become a corporation.
 

theycallmebruce

Active member
Nov 17, 2002
1,107
1
38
You need to look at dividend paying stocks that consistently increase their dividends. Bank stocks are good for this. As dividends increase, it is like getting a raise. Here is an excellent website to analyse what stocks to buy for dividends and dividend growth. www.dividendgrowth.ca
 
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