December 10, 2007, 7:00 am

December Smith Manoeuvre Update

by: The Financial Blogger    Category: Smith Manoeuvre
email this postEmail This Post Print This PostPrint This Post Post a CommentPost a Comment

Oh boy, will this year ever end so I can start fresh again? Arg! This month was not the best month ever for my Smith Manoeuvre strategy. In fact, it is not that bad and there is nothing to write your mother about (even to write my wife about ;-)) but still, the overall market dumped and I blindly made bad trades one after the other in my regular investment account. It is just that all my investment accounts are in the red this year and it is not an encouraging situation!
So here we go with the bad news : I am now showing – $168 for a big -3,15% yield for this year. I guess that starting my Smith Manoeuvre last February when the market was about to reach its peak was not the best timing ever either. The good news is that I don’t need this money for a while and it can fluctuate during that period. I will shortly receive a dividend payment that will surely bump my overall performance.

I said that I would sell my first $5,000 of NBC dividend fund in order to get the Sprott Canadian Equity fund. While I did not change my mind, I did not care to read the NBC dividend fund restriction; I need to maintain a minimum of $500 invested in it! As of today, I have for $5,176. Therefore, I will not be able to buy the Sprott Fund until 2008. However, I am thinking about making an extra contribution in the fund and sell my shares at the end of December. Earlier this year, I made some great capital gain through the sale of my land and I would surely use that $170 loss to offset a part of it. You have to find the positive aspect of things even when it is hiding deep in the woods!

I will probably be able to increase my Smith Manoeuvre monthly investment starting January 2008. While I dropped it to $400 a few months ago for cash flow purposes, I just refinance my property and I will surely save a ton of money with that strategy. I will double check my budget and write about what’s going to happen in 2008 in the following weeks.

The fact that the Bank of Canada dropped its rate by a quarter of point will surely help me out increasing my Smith Manoeuvre investment amount. However, you should not calculate your monthly investment directly with the Prime Rate. It can fluctuate several times within the span of the same year. However, I plan on making much bigger payment on my HELOC and therefore have more room to increase my SM contributions.

I think that it is easier to get on the right “financial track” if I keep writing down my objectives. This is why I will think about what I want to achieve for the next year and probably blog about it as well. Since I am at it, if you have any suggestions for the upcoming year, please feel free to email me at thefinancialblogger(at)gmail(dot)com.

If you liked this article, you might want to sign up for my FULL RSS FEED. Then, you would get my daily post in your email and can read it at any time. To subscribe, please click HERE.

You Want More? Sign-up! ->
TFB VIP Newsletter

If you liked this articles, you might want to sign for my FULL RSS FEEDS. If you prefer to receive the posts in your email, subscribe CLICK HERE


by: The Financial Blogger | December 10th, 2007 (4:02 pm)


by: andy gevaert | March 18th, 2008 (5:00 pm)

Did anyone in Canada have a positive return in the mutual fund world?? Reading of your situation eased my concerns a bit, as well as the advice to “stay the course” in terms of investing strategies.

Question: Is now a good time to utilize any room in the HELOC for additional investments?

thanx, andy g.

by: The Financial Blogger | March 18th, 2008 (7:56 pm)

Hi Andy,

I would not risk myself into personal advice as I don’t know your specific situation. However, I will personally wait a few months and invest more money this year. It seems that the market will take a good hit and this is always the best time to buy more shares!