|First things first, Happy Turkey Day!… I Mean Thanksgiving 😀I also decided to change my intro for this post after reading Million Dollar Journey’s contest. Last week, he did a great review of “An American Hedge Fund”. Then, he conducted an interview with the author (and the great trader) Timothy Sykes. Since then, this book was part of my Xmas list (I tried to ask the book for Thanksgiving, but wife disaprove the manoeuvre).
To my great surprise, Million Dollar Journey offers not 1, not 2 but 5 copies of “an American Hedge Fun” ! So I hope that one of my reader (or maybe myself!) could have a chance to win this book. This would make Xmas comes faster this year 😉
I already explained that I had to wait eight minutes to get my Smith Manoeuvre investment dropped from $600 to $400. I temporarily have to reduce my investment amount in order to compensate for my wifeâ€™s income drop. Maternity leave do not have only advantages!
So this month I invested another $400 into the National Bank Dividend fund. My portfolio is about to make a big switch as I am approaching the $5,000 bar. Once I reach it, I will sell all my shares to buy the Sprott Canadian Equity Fund. It was reopen for investment about two years ago and I did not check if it was still available. I might have to change my plan if itâ€™s not the caseâ€¦ darn!
Eric Sprott is the fund manager and he seems on top of his game. He aimed right when the oil price started to climb, he also avoided the subprime lender crisis and his next target is gold. As the USD is skiing down the hill, the price of gold could reach $1,000 within the next twelve months. If everything keeps the way it goes, Sprott would not be surprised to find gold near $3,000 in three to five years. While it seems impressive and not likely to happen, I would never thought I would have to put $60 of gas in my Mazda a couple years ago neither!
So far this year, I invested the sum of $4,500 into my Smith Manoeuvre strategy. My portfolio is still in the red but not by that much. I am showing a negative return of -1.35%. The National Bank dividend fund might not be the most efficient dividend fund on earth but it surely compensate by its low volatility on the market. I may have to sell my shares at loss to buy the Sprott fund but the money I will lose is minimal. On top of that, I can use it against previous capital gains.
The interest charge keeps growing as months go one by one. Last month, I had to pay $13.55 of interest. The thing I like about the Smith Manoeuvre is that it is a constantly growing leverage strategy. You do not have to contract a big 100K investment loan up front. You learn a little bit over time and you always have the choice of changing your monthly investment.
At the end of this year, I will have about $5,300 invested through the Smith Manoeuvre. This corresponds to a very small investment loan. As my investment is done on a periodic basis, I can see things coming and change my investment strategy by changing my purchase approach.
If you have any questions regarding my strategy, do not hesitate to post your comment or to contact me on firstname.lastname@example.org.
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