DivG Purchases – January 2011

I’ve been doing some early shopping the past few weeks of 2011 as I add to a few positions that have been dipping below targeted allocations within my Canadian Dividend Growth Portfolio (DivG).

Target allocations, as a refresher, for general purposes is between 3.0% and 5.0%

Once a stock drops below 3.0% I make a decision of whether I am happy adding to my position (no negative change in fundamentals) or whether I need to shed the position from the portfolio due to a negative change in its fundamentals.  The other situation where I sell is a recent run up in price of 30% or more in a short period of time or if the position has served its purpose (a currency hedge, opportunity purchase or income).

Once a stock rises above 5.0% its time for me to trim that position back to where it’s ideally suited at.  Each individual stock has its own range that I’m comfortable with.  In a previous post on Power Financial (PWF) I shared with readers that I often keep it in a higher proportion to other stocks including IGM Financial (IGM) due to PWF’s ownership in Great-West Life (GWO).  Where PWF usually sits at 4.2-4.5% IGM in the same portfolio often sits at 3.2-3.6%.  This way I maintain exposure to GWO in the proportion I want even though I own IGM independently.

So far in January I’ve added to positions in Power Financial (PWF), Rogers Communications (RCI.B), IGM Financial (IGM) and Royal Bank (RY) to rebalance positions in the portfolio.

Next on the list, if I assume no further opportunities in the market, will be the two REIT’s held in the portfolio: Calloway REIT (CWT.UN) & Cominar REIT (CUF.UN).  I would like to add to my position in some of my Canadian preferred shares since their initial purchase the overall allocation to preferreds has dropped from ~15% of the portfolio to 10.9% but current prices and availability (especially in BAM.PR.J) have discouraged those types of purchases.

One stock I’m still looking to add in a switch is Enbridge (ENB) common shares for my Enbridge preferred shares (ENB.PR.A).  That move has been in waiting for about the last 2 years but at some point I’ll decide the income isn’t worth as much as the capital appreciation and I’ll pay the premium for the switch to the common shares.

Overall I’ve been very happy with the quality and performance of the portfolio.  The dividend increases recently are welcomed as the dividend drought appers to be over and I’m anxiously awaiting increases from the Canadian banks this spring as they’ve held off for far too long in my opinion.

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