Thank you for the warning about INZ.UN. I'll watch it with
the idea of finding a trading range. It's volatility is
such that I'd be inclined to treat it as a stock rather than
a trust.
Now, this debate about technique is doing some good. It is
forcing me to look at some of my decisions to see if they could have been better.
I owned PWI.UN. I sold it at 7.08. I didn't do it out of panic. I had read three quite negative reports and while I liked the dividends, I didn't care for the things I was reading. AVN.UN, on the other hand, had a very positive, outperform report. I have limited funds so that to buy, I often have to sell. I, therefore, have to take into account the cost of the buying and selling. Even at 58.00 a round trip for a thousand shares, the cost needs to be taken into consideration.
I sold PWI.UN at 7.08. X 4 consolidation, that is 28.32.
The stock currently trades at 25.25. The dividend is 40 cents. If my math is correct the yield is 14.03%. I would
only have 250 of the new shares, of course so the difference is 3.07 x 250 = 767.50.
I used the money plus some more to buy 1,000 shares of
AVN.UN at 11.44. It pays 13.7% on my purchase price. It currently is trading at 12.05 which is 61 cents more than
I paid.
If I had more money, I might well have been tempted to
keep PWI.UN but given my qualms about PWI and the possibility that it may not be able to continue its .40
monthly distribution and given that AVN.UN is a natural
gas play with more upside, I'm happy with the replacement
of PWI.UN with AVN.UN. This does not refute Peter's statement that if one simply holds PWI.UN, averages down
on the dips, collects dividends in the meantime, then
waits for PWI.UN to cycle back up, one can accumulate a
lot of stock and income. Since I fall between both these
stratagies somewhat, I'll be more inclined to hold onto
AVN.UN, watch PWI.UN. If it falls in price to a point where
some of the risk is mitigated, and if I've accumulated enough to buy a reasonable number of shares by that time, I'll then buy back in. Of course,I won't know if I've made
a good decision until some time has passed. What I will have given up, in the meantime is the difference in yield:
14.03 - 13.7 = .33 of a percent plus the cost of the trades
29 x 3 = 78.00. What I've "made" is the 767.50 + 610.00,
although, this, is hypothetical because PWI.UN could go back up and AVN.UN could fall.
I'm afraid that I cannot guarantee my math. I haven't done this much adding, subtracting, dividing and multiplying since public school. |
