Getting out of Apple and Intel, Adding Canadian Dividend Fund

As part of my broader portfolio rationalization it’s time to sell my individual stocks and move to index funds.  One of my larger individual stock holdings is Apple (AAPL).  It’s a little heartbreaking to sell anything at a loss, but it’s better to take a loss than a bigger loss.

Apple is currently trading at $445, which is 37% down from recent highs.  It’s very tempting to imagine that Apple will revert to its high if I hold the stock, but that is a mirage.  The basic question I must ask myself is this:

“Would I buy Apple today at $445?”

Or, put another way:

“Today, would I rather have $445 cash, or one share of Apple?”

The answer is that I would rather have the cash than the stock.  So, it’s time to sell.  Ditto for Intel (INTC).

So, how do I deploy these funds?  These stocks are in the account that I plan to use for my  TSX holdings, which will be 20% of my portfolio.  Rather than buying more of the iShares S&P/TSX 60 Index Fund (XIU.TO), I have decided to buy the iShares Dow Jones Canada Select Dividend Index (XDV.TO).  XDV is a three-star rated ETF with high liquidity that  holds thirty* high dividend Canadian equities (similar to the Beating the TSX portfolio).

  • Sell AAPL @ $445
  • Sell INTC @ $20.25
  • BUY XDV.TO @ $22.33

*The thirty stocks in XDV are:

Ticker Name %age
CM CANADIAN IMPERIAL BANK OF COMMERCE 6.76
BNE BONTERRA ENERGY CORP. 6.19
NA NATIONAL BANK OF CANADA 5.85
TD TORONTO-DOMINION BANK/THE 5.60
BMO BANK OF MONTREAL 5.28
T TELUS CORP. 4.65
RY ROYAL BANK OF CANADA 4.55
BNS BANK OF NOVA SCOTIA 4.25
BCE BCE INC 4.19
IGM IGM FINANCIAL INC. 4.10
AFN AG GROWTH INTERNATIONAL INC. 3.70
LB LAURENTIAN BANK OF CANADA 3.46
TRP TRANSCANADA CORPORATION 3.20
RCI.B ROGERS COMMUNICATIONS INC. CL B 2.99
MBT MANITOBA TELECOM SERVICES INC. 2.89
PWF POWER FINANCIAL CORP. 2.67
SLF SUN LIFE FINANCIAL INC 2.64
COS CANADIAN OIL SANDS LTD. 2.58
RUS RUSSEL METALS INC. 2.55
EMA EMERA INC. 2.52
GWO GREAT-WEST LIFECO INC. 2.47
TA TRANSALTA CORPORATION 2.25
HSE HUSKY ENERGY INC. 2.22
POW POWER CORP. OF CANADA 2.22
AGF.B A.G.F. MANAGEMENT LTD. CL B 2.16
FTS FORTIS INC. (CANADA) 2.16
SJR.B SHAW COMMUNICATIONS INC. CL B 1.87
CJR.B CORUS ENTERTAINMENT INC. CL B 1.77
RET.A REITMANS (CANADA) LTD. CL A 1.34
PGF PENGROWTH ENERGY CORP 0.75

POSTMORTEM

The trades described above are part of a broad portfolio rationalization that includes many trades.  I have performed a single postmortem to cover all of these trades.  The postmortem is here.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s