Covid – Still Alive and Buying

Covid – Still Alive and Buying

Hey everyone how’s it going?

I hope you all are doing good in this covid outbreak. Clearly the world has changed a lot in the last week. I think we are getting close to peak fear. Company’s are shutting the doors for a couple weeks, the markets going up 10% one day and down 10% the next, Sports are all cancelled, politicians are getting the virus and it keeps spreading. Will we make it through this? Of course we will.

Remember media loves fear. It gives them something to talk about and increases viewership.

Seriously we need to relax a bit. I’m getting messages now that I shouldn’t be buying since there will be widespread bankruptcy’s. If you don’t want to participate in the market that’s fine. Everyone has their own risk tolerances. This has been testing mine but at the same time, its getting better every day. I’m now enjoying the lower drips.

Although at 8 bucks usd a barrel I’m worried about our Energy positions keeping that dividend, Enbridge should be fine as long as that oil keeps flowing…. but once the cuts start coming, I think they will be coming fast.

Now I understand some people are scared. The market has never been like this since I started investing, and I’m sure that’s the same for a lot of people. Job security is at risk. For us personally the wife’s office closed until April 1st for the time being. (without pay) And I’m currently just a stay at home dad until the landscape season starts after doing wallpaper for the winter.

I start questioning how busy we will be this year, the phone is still ringing and I’m doing some quotes but we had a really big job lined up for mid season that is questionable at the moment. I guess it all depends on how long this will go for. I think at time’s like this we should really try to support local business’s. Restaurant’s must really be taking a beating. Order something for takeout from them, I’m sure they would appreciate it.

Positives

I’m a glass half full guy and I hate all this negative talk. We need to see the positives as well. Do you see those people in Italy playing music on their balcony’s for everyone? Gym trainers doing workout routines and everyone following suit?- Powerful Stuff!

The canals becoming crystal clear now with even dolphins swimming in them? How about the pollution in Wuhan?

Seeing all your neighbours offering to grab groceries or necessities for people who need help? Bejing and China are starting to come out of isolation and things are getting back to normal. (will the virus spread again, that’s my concern) Clinical trials on vaccines seem to be going good.

The world is a incredible place and people can be great. Unfortunately media doesn’t cover the good stuff happening. This is what we all need at times like this. Go out and do something good, give away that toilet paper if your hoarding it!

Us

I’d like to state that me and the family will be ok during this time, so don’t worry. We got some savings and precious metals I plan to liquidate if things get really bad and metals shoot up. I’m sure things will be hard for some people and it really makes me debate these kind of posts. We are truly blessed to have changed our financial picture when we did. 2-3 weeks off together is actually pretty nice, we don’t get that much time together often. Make sure you enjoy it too. Maybe not every moment…. arg! haha

I hope after this whole ordeal people start buttoning up their financial picture. Things would be a heck of a lot harder if we carried a tonne of debt and didn’t have all these passive income sources. It’s all about getting your money working for you instead of against you. Each year, financially things should get easier.

New Purchases

This week we made 2 purchases…. I swore I would only make one but they quickly hit my target price for the new purchase.

I continued to build our position in Smart Centers Reit. As I said last week in a lower interest rate environment reits, utilitys and telcos benefit immensely. But for some reason reits have taken an absolute pounding. Not a couple punches, straight up beat downs!

Of course some tenants in these places will get hurt as people stay inside and don’t go out much other than for food, depending on how long this will go on I think they will be fine. Remember walmart is a huge anchor to most of smart centers plaza’s and they are diversified from just retail. The locations are also in prime real estate areas, so if there are vacancies they should fill back up once this situation recovers.

I started a position in our kids resp as I loved the diversification of the company and also it was trading at just below fair value. Our kids resp had no real estate exposure so this was a welcome addition.

When it was around 30 bucks a share I figured I would need around 6,000 bucks in shares to get this one to drip monthly in their portfolio. (one full year of contributions and govt match for the both of them) Here we are though and we will now be dripping them each month for significantly less. Winning!

Monday we added 48 shares of smart centers at 19.70 per share. $7.50 per share cheaper than the week before. I told myself to wait for the last purchase at 15 bucks. Let’s see just how low things can go….

Well yesterday they went under 15 bucks. So we added another 65 at 14.90 per share. Smart centers has now dropped more than 50% since the start of the month at this price.

Remember this is a reit that has raised their dividend the last 6 years and sport a 5 year average div growth rate of 3%. It will be interesting to see if they continue that streak this year.

Conclusion

We now hold 158 shares of Smart Centers Reit (sru.un) with a average price of $20.83. I’m very happy with this. In total this will bring in $292.30 a year in dividends. Or $24.35 a month if the dividend is maintained, enough to drip a share each month. Let the compounding begin! Dividend Portfolio has been updated.

We built this position in just the last 2 weeks, 2 and half weeks ago it would of costed a lot more and would of eaten our entire resp contributions. Now we still have lots of room to add to that cnr and possibly bce position. Gotta love it.

I’d like to end this article just stating that I’m a huge fan of dollar cost averaging. On twitter or facebook etc everyone is stating not to put money into the markets. The world is ending, this is just getting started, your wasting your money etc etc

Clearly my timing hasn’t been ideal, of course I would of been better buying all these stocks under 15. Who would of known this stock would be down 50% in less than 3 weeks though?

It’s interesting to see how many people all the sudden sold on the perfect date and seem to know when the exact bottom is. I’ll tell you right now I don’t, Buffett doesn’t either. Some stocks are selling for under 50% of where they were 3 weeks ago. If you won’t put money to work yet, when will you?

This could be one of those once in a lifetime opportunity’s don’t let it pass you by…….

As always do your own research, I’m just a really good looking normal guy. =)

Wish you all nothing but the best. If you are a healthcare worker or someone stocking the shelves at the grocery store, cleaning buildings etc thanks for all you do!

Cheers!