The Globe and Mail newspaper publishes a monthly feature on investing called Trade by Numbers. It is usually worth checking out and the latest issue has a “Spring Cleaning” theme. Highlights from the current issue:
- Columnist Rob Carrick suggests selling some income trusts that have been strong performers for the past five years.
- Mathew Ingram says that it is time to part company with slow-growing Microsoft.
- Labour-sponsored funds may be prime candidates for spring cleaning.
My retirement account could do with a thorough spring cleaning. I still hold stinkers like JDS-Uniphase and Nortel only because if I sell them now, I would be exceeding the foreign content limits. If the federal budget, which eliminated the foreign property rule, passes, these two stocks would be at the top of my selling list.
I also hold a labour-sponsored fund in my retirement account. My original rationale for buying was the higher foreign content allowed in a RRSP that held these funds. I now think these funds are lousy investment idea: they have a poor history of returns, hold large amounts of cash and their fees are usurious (5% MER is quite common). Unfortunately, these funds have an eight year mandatory holding period, so I will be stuck with the fund for three more years.
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2 responses so far ↓
1 Susan // May 13, 2005 at 1:35 pm
Hey, someone else who owns JDU and Nortel! I just sold mine yesterday to finally get them gone. I am an accountant but I hate investing. I had (note the word HAD) $20K in a locked in RRSP from a pension rollover from a major organization. It was invested in BORING mutual funds until hubby started talking with a friend who was making a KILLING in stocks, including JDU. Since I had no interest, I told hubby to go ahead and manage my RRSP. BAD BAD BAD. Along with JDU and Nortel, we also bought Palm stock when it debuted. Portfolio is now worth about $2000 total. Plus every time the statement comes I get MAD and UPSET. So I sold them so that I don’t have to look at the book value vs market value any more. And now I am starting over. I just read Start Late Finish Rich by The Automatic Millionaire guy. I am not sure I am impressed but he mentions some mutual funds in there to buy. Have you seen it? Any thoughts? I guess what bugs me about his book is that he is an American through and through and it feels like he has Canadianized his book but probably doesn’t really understand the differences in Canadian taxes etc. Not sure until I finish the book.
2 Canadian Capitalist // May 13, 2005 at 10:14 pm
Susan: Thanks for stopping by and your comments. First off, I want to clarify that I am not a financial advisor.
But, I do suggest that average main street investors like us should diversify our portfolio by investing in cash, bonds, stocks, REITs etc and then their stock holdings across different sectors.
You can check out the sleepy portfolio for a simple, diversified portfolio. I learnt from the school of hard knocks that holding 20 stocks in the same sector (technology, gold or whatever) is tempting fate. I am also not a fan of mutual funds (except low cost index funds like the TD eFunds).
I’ve read the Automatic Millionaire. He does make is sound so simple. We all know the secrets to financial success. Spend less than we earn, save more, invest wisely. It is following it through that is the most difficult part.
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