April 7, 2009, 5:00 am

My Smith Manoeuvre – 1st Quarter Update

by: The Financial Blogger    Category: Smith Manoeuvre
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Back in February, I have made a few changes in order to get a better diversification in my Smith Manoeuvre investment strategy. Therefore, I decided to add US, Canadian and International index funds. Unfortunately, I noticed in March that all my transactions have not been done according to my instruction (it is apparently quite a feat to write down 4 transactions!).

Nonetheless, I have made some great picks since my new investments really picked up during the March Rally. It is good to see that my Smith Manoeuvre account is showing a positive year to date return or 4.2%. Overall (since February 2007), my Smith Manoeuvre account shows a negative return of -25%. It is obviously quite tough to compensate for 2008 in a single quarter! It will actually going to take years to come back to a decent level.

So here’s what my portfolio look like as of March 31st:

– National Bank Divided Funds: $4,942

– Sprott Canadian Equity: $3,163

– Omega preffered shares: $101

– Omega American consensus: $183

– Altamira Canadian index: $0

– Altamira American index : $177

Total in my Smith Manœuvre : $8,566

I am still not convinced from the March rally that the stock market is back on track and that everything will come back to normal in 2009. While I believe we will see our money back (for those who are still invested in the market!) and that it is currently an opportunity of a lifetime, what happened in March just seems unreal. On the other side, what happened back in September and October 2008 seemed unreal as well! This is why I stick to my investing strategy no matter what I think and I am not trying to sell to make a quick profit and come back into the market after the next correction. I still think that you should not do market timing.

I am now investing $500 per month into my leverage strategy and I don’t plan to make much modification for a while. I will look at what is going on on the markets and look at my investment strategy next quarter but don’t expect many changes. I think I will keep this investment strategy for the upcoming year and keep dollar cost averaging the market!

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By comparison, my TFSA account is up a bit less than 1% since January — 100% GIC.

I don’t believe we’ve hit bottom yet; Canadian Capitalist’s Sleepy Portfolio made NO gains since inception, and market volatility reigns supreme. It may be great for the day traders, when stocks change in value by 25% in a week, but not for my type of trading.


You aren’t using TD e-Series funds are you? 🙂

I learned that when you set up an automatic monthly purchase, all funds with ‘Canadian’ in the name are equivalent and it doesn’t matter which one you’re assigned to.

I think Canadian Capitalist is using TD series.

It is true that the canadian market is small, therefore severall mutual fund will look alike in term of aset allocation and yield. However, there are still a huge difference in term of MERs.

This is why I decided to go with index funds with cheap MERs. I got lucky since I have changed my asset allocation right before March rally.

As of for bottom of the market, we will only find out at the end of 2010 😉

Mike, is there an email address I can correspond with you? I picked up your name from reading an article and would like to exchange some ideas with you. My email address is above.


Hi Mike,

Thanks for sharing your SM adventures. I too am using the SM and don’t know anyone else who is so it is nice to know what others are experiencing. I have been thinking i need to diversify my reinvestment portion as well since so far it has all been into one fund. This fund to date is up 12 % and my ROC fund is up 22% so my SM is going super well and only 3 more years to pay off my mortage and be mortage free by 40!