2 Recent Buys – SLW, VWOB

A quick update on a couple of recent purchases in my portfolio. Things have been busy, so this post is a couple of weeks late…but better late than never.

Silver Wheaton Corp (SLW.TO) – added 50 shares @ C$28.50…which it turns out I was too early to pull the trigger. I still see tremendous value and will continue nibbling although I am getting close to a full position on this stock. Not much has changed…the business is sound and the fundamentals are fantastic. In addition, the company announced a great quarter earlier this month followed by a dividend increase of 20% (forward yield is just a shade under 1%). You can read about my original SLW purchase here.

Vanguard Emerging Markets Govt Bond ETF (VWOB) – Ive been interested in emerging market bonds for a while (see this post from May 2015) and finally decided to initiate a position. The fund gives me an exposure to emerging market sovereign bond market and pays approx 4.4% in fixed income going forward. This is only a very tiny position of a few hundred dollars for now as I dip my toes and think more about this position before committing more capital.

Disclosure: Full list of holdings can be found here.

 

22 thoughts on “2 Recent Buys – SLW, VWOB

    • You are right, DiviCents…I am facing the same problem when I shop for silver bullion. There is always 8-10% markup from the spot price when it comes to silver, which for some reason doesnt apply to gold (I can get gold for 0.5-1% over spot price).

      R2R

  1. Always love reading about new buys, especially these days when we are seeing the market rise every week. Keep nibbling on those positions. Clearly the precious metals are hitting some near term headwinds but that’s usually the best time to pick up some shares. Thanks for sharing.

  2. It interesting to see your foray into the metal space, as I have been heading in the opposite direction, gradually reducing my commodity exposure. I have never owned a pure metal play, and in the last year have sold two Canadian energy producers, as well as BHP and Potash. I find it interesting to consider the perspective of people who approach things differently, especially a fellow Canadian investor. Hope it works out well for you!

    • Hi Dining,
      Energy may not be a bad place to foray into now…there are some interesting value plays after the bloodbath in the last couple of years. But I think the pickings are slim — upstream is probably really tough, but also provides some potential lucrative returns if you make the right pick. Theres probably a bit more safety in midstream and downstream.
      As for mining companies, I have never been crazy about investing in BHP and Potash — both do not interest me at all. BHP — because it is a behemoth and is spread too thin across different industries and gains come very slowly if at all. Potash — too much supply in a market that has overhyped stocks for the sector. I did pretty well with AGU but sold out from them earlier this year.

      Gold and silver is where I see a lot of opportunity right now…lets see if it pans out.

      Best
      R2R

  3. I am sticking with my plan, investing into high quality dividend stocks, reinvesting dividends. I have next 25 years of building my dividend portfolio. I used to invest in the gold (GLD) when it fell from 2000 level. I bought at 1600 or something (160 for GLD) thinking that this was a good deal. I got rid of it as I was sitting on it for almost two years with no income from it and no appreciations. I believe I got rid of it at a loss when it dropped further to 1250. Gold is dead money. You can be buying gold if you have excess money and have nothing else to invest (because if so you would overweight that investment), but not as a core of your retirement portfolio.

    My plan is simple. Trade options for income. Invest that income in dividend growth stocks and when fully invested, then invest into a land (farmland, grazing land, commercial land, etc.) and once invested enough put maybe some money into metal.

    I bought the metal about 3 years ago or so. And I also bought some dividend stocks at about the same time.

    The metal is still down. If I kept holding it, I would still be under water. My dividend stock almost doubled in price:

    JNJ purchase price $58 a share, today $114 a share + dividends
    Realty Income $38 purchase price, today $56.57 + dividends
    GLD purchase price $158 a share, today 112.6 + nothing

    My choice is simple then. I want in my portfolio something what makes money. Gold makes nothing.

  4. I really don’t understand the incessant need for investors to bash precious metals, particularly gold… Gold is money and has been for thousands of years… Sure, it doesn’t pay a “yield’ but it’s not suppose to! Physical bullion is a STORE OF VALUE and a means for one to preserve wealth… The problem most investors have is they like to solely fixate on things over just the short-term and even worse, only look at this from a US-based perspective… Just look at how gold is doing in terms of other currencies (TRY, MXN, ARS, even GBP), and tell the people living in those parts of the world that precious metals are “dead money” and “worthless”…

    Newsflash to all investors — The world is a BIG ASS PLACE and extends far beyond just your own backyard! I like in Hong Kong right now, and it might surprise you to learn that there’s literally a gold jewellery shop on every corner! Gold is ingrained in the eastern cultures and people here don’t bash it, which I actually find quite refreshing… It takes a lot of hubris and miseducation to dismiss gold’s role and importance to the overall global economy…

    And everyone should be well aware that fiat currencies ALL FLUCTUATE like mad… Even in USD terms, gold experienced a most massive bull market from around 2001-2011(rising from about $250/oz to $1,900/oz at the peak) that helped many investors/speculators make ENORMOUS profits, particularly in the mining stocks, which are a highly leveraged way to play the gold trade…

    Speaking of mining stocks, they are INSANELY volatile, so you CANNOT approach that type of investment using everyone’s favorite means of looking at things, which is through the lens of Buy and Hold Forever… It won’t work, so stop trying to force fit a square peg into a round hole… I so often hear that mining stocks are “garbage investments”, and that just makes me laugh… Why so much hate, passion, and emotion towards an asset class?

    Instead, I think we all need to look at things from an agnostic point of view… If ANY particular asset class (that isn’t going obsolete and the way of the dodo bird) gets bid up out of the stratosphere, we need to be leery and more cautious of fundamentals and valuations… OTOH, if that same asset class becomes absolutely hated by the markets and enters oversold and DEEP VALUE territory, we need to start doing some proper research and paying attention with great interest…

    Investing 101 is “Buy low and sell high.” If you truly believe that, how can you feel the need to shit on an asset class that is trading at/near historic lows?!?

    http://www.macrotrends.net/1440/hui-to-gold-ratio

    In case anyone forgets, markets move in cycles and waves… What goes up goes down again, and vice versa… Just because precious metals have been dismal performers over the past 5 years or so, should that atomically imply that they will keep underperforming until every mining company goes bankrupt? Less anyone forgets, mining companies are businesses too and need to earn their cost of capital… Low prices below the cost of production can only lead to supply destruction which can only lead to higher prices… That’s how supply and demand works… Confirmation bias is such a deadly approach to take with investing!

    http://www.macrotrends.net/1311/asset-price-bubbles-since-1976

    http://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart

    During the dot-com boom, investors thought the internet was different and stocks could only move in the upward direction… With subprime, it was deja vu all over again… Right now, it’s all about the USD and bond super cycle that has been in place for 30+ years… When will investors wake up and realize that nothing goes up forever in a straight line for perpetuity?!?

    Anyway, despite the recent selloff in gold, the GDXJ index is still up over 75% YTD… I don’t know about you, but I’d say those are some pretty decent returns for 1 year… Of course, if you hate gold with a deep passion, these mining stocks could you up 10,000% and you would still feel the need to rip on them…

    Everyone claims to be an “open-minded investor”, but really these types of folks (like Sabeel) are actually quite rare to find… For the most part, investing is way too emotional and people prefer to fall in love with an investing methodology that they feel is superior and will ALWAYS outclass every other approach forever and ever… It’s just easier that way…

    But again, just look at the asset class chart that I posted above… It don’t take more than an elementary school education to realize that EVERY ASSET moves like a sine wave… To expect otherwise is to delude yourself from reality…

    No, I’m not a perma gold-bug… But just like Sabeel, when the markets are giving me the opportunity to add up high quality assets at extremely attractive prices, I like to buy hand over first… It’s all about taking what the markets give you and looking for deep value opportunities… If/when the sector gets too frothy again I’ll of course look to sell and exit out… And no, there is nothing wrong with making money through the means of capital gains/appreciation either! Dividends aren’t the only game in town, contrary to popular belief…

    Anyway, I don’t know why there’s a need to debate “buy low and sell high”, which is something everyone thinks they know… but do they really?

    Long rant over. Thank for reading 🙂

    • Thanks for the kind words about me, Jay.
      As usual, I agree with the statements made…its really funny how gold seems to bring this passionate hatred by investors. I wonder why that is…probably because its hard to understand and unlearn all the brainwashing by the “education” system that it is simply a pet rock. Clearly, it seems to hit a nerve with the community and we are painted as barbarians for flocking towards a shiny object. You and I see value in gold investing and we are unemotional about it. If there was a better investment out there, we would simply go there since we can stay fluid in our movements. I was hoping to open some people’s eyes with my previous posts about gold but alas, it hasnt been the case. Like you said, a 75% YTD return still aint bad at all. How long do you have to wait in dividends for that kind of ROI? About 25 years? Not to say that DGI is a wasted investment philosophy, but there is a time and place for everything.

      Thanks for sharing the insight. As always, love reading your comments/rants 🙂

      R2R

      • I think the reason why some people may not like it, is probably because of the nature of blogging. For example, people used to read your site possibly because they wanted to learn about passive income. Then you switched strategies, and people are confused or no longer finding what they are looking for. Also, people do not like being challenged. I have spent the past year or two reading a lot of content I disagree with. Any time I have tried to challenge others in the past, I have not been welcome. Personally, I would rather make money, than protect my ego, and I do enjoy intelligent conversation. But it is tough to do that in public, when the other party perceives you as a threat, and doesn’t want to lose face ( and it is vice versa of course)

        I think Jay experienced the same thing when he went from writing about dividend stocks, to writing about real estate, and most probably when he wrote about trading dividend stocks and then trading gold. People thought he lost his marbles. I kept reading him however.

        What I do not understand is the need for name calling. Jay in particular has stated that dividends are dumb on multiple occasions. But he then goes on to complain that some “haterz” call his favorite investment a pet rock. I don’t get that mentality and the double standards.

        Like when stocks are falling down, and dividends are cut, some gold investors take victory laps. But when their gold metal is going down in price, and someone says something, they are automatically getting defensive. That doesn’t strike me as unemotional.

        Just because someone disagrees with you that doesn’t mean that they are a hater.

        • In my case, I know that if I start writing about daytrading forex options online using margin, people would be furious.

          I have gotten angry people writing me when I sell some stock, or when I talk about fixed income, or when I talk about index funds.

          When I simplified my retirement accounts in the summer and sold dividend stocks to buy some index funds, or when I sold many pass through entities like REITS to buy a REIT fund, or when I started accumulating fixed income, people were not happy.

          But at the end of the day – why should you care what people think about you? Your goal is to make money. If you make money investing, you should not need the permission of others.

          DGI

          • DGI,

            It is tough going against the crowds b/c ANYWHERE you go, you will ALWAYS have ardent supporters of a particular asset class who will defend it until the bitter end, regardless of where fundamentals, valuations, macro sentiment, etc, go…

            In regards to gold, it is absolutely not my favorite investment… I have no favorite investment… Or better stated, my favorite investment is whatever happens to be most undervalued at any particular moment in time and an asset class that I feel gives me the best shot at capturing the most returns in the medium/long-term… When it comes to capital gains/dividends I am agnostic… Of course, I prefer dividends (cash flow), but if I feel that I’ll make more with capital gains (appreciation), I’ll go with that…

            In regards to “haters”, it was beyond ridiculous last year! That would be an understatement… People were commenting and emailing me, “You are making the biggest mistake of your life and I’m sure you’ll regret it!” If not that, it was something like, “I don’t know why you think you are so special and think you can outsmart the markets…”

            I was getting that repeatedly, with each gold stock purchase I was making, and losing subscribers left and right… So, I certainly know what it’s like to be a part of a lonely trade…

            And with me calling dividends “dumb”, when have I ever said that? Perhaps, I made reference to how it’s “dumb” for investors to chase yield without any care for fundamentals/valuations/etc… but most definitely I DO NOT feel like dividends are “dumb”… That would be absurd for me to say since I started my early FI journey buying dividend growth stocks! Further, I am only able to fund early FI thanks to real estate, which is cash flow, and in my mind the EXACT equivalent to dividends!

            I have NOTHING against dividend stocks, despite what you might think… I just hate assets that are overpriced… And if you think I’m harsh on dividend stocks, you haven’t heard the things I’ve said about overpriced real estate!

            Again, I’m agnostic… I don’t care one iota about ripping on my investments… I got to where I am thanks to Bay Area real estate, massive appreciation (both capital gains and cash flow), and couldn’t be more appreciative of all that… That buying opportunity back in the depths of despair was indeed “once in a lifetime”, or along those lines… But today? Forget about it… I will rip on Bay Area real estate unit the cows come home and then bash on it some more…

            It’s not personal! I don’t fall in love with my investments… If dividend growth blue chips like PEP, JNJ, SBUX, DIS, etc. all sold off to the tune of 70%, 80%, 90%+ (like the gold miners did from 2011-2015), I would be the biggest DGI homer on the blogosphere… And I’m sure you and Sabeel would be as well!

            We would be ramping DGI articles all day, everyday…

            But in the current market environment and landscape, unfortunately that just isn’t the case! I’ve said it before in the past many times, there is nothing better than dividend growth stocks; it is the ONLY Buy and Hold Forever investment that I know of that is truly 100% PASSIVE! And as much as I’ve benefited from real estate, I’m a realist and know for certain the same cannot be said for that asset class!

            Pros and cons with everything… And a right time and place too.

            Cheers!

          • First of all, this site is not “dividend-growth-investing-for-life.com”. This blog has been about my personal journey towards financial independence. There are multiple assets involved and dividends are just one part of it. If you are looking for confirmation bias, then you will have to look elsewhere

            R2R

        • Sam the Man says:

          I agree the website was about retiring from dividend income/passive income and now it’s about “preserving wealth” by buying gold and silver.

          • That has to be the dumbest thing ever said by anyone on this blog. If your primary focus is not to preserve wealth, then you need to go back to basics and rethink your overall strategy.

            Good luck. You will need it. Lots of it.
            R2R

      • If your remark on “hatred from investors” was meant to me (which I guess was because I am the only one who disagreed with you on this investment, then I assure you that I do not hate you, I do not hate gold, I do not hate your decision to invest into gold or silver.

        I am expressing my disagreement with that and showed reasons. Of course, you may argue that I was investing into gold and stocks in a bull market which is now about to end and thus that was the reason I saw losses in gold and gains in dividend stocks.

        So just a quick reminder: When the crap hit the fan in 2008 even gold didn’t save investors form losses. GLD went down from $100 a share to $70 a share. That’s 30% loss. When investors ran for the exit in panic, they were selling everything, even gold. Today, seven years later, GLD is $112. That’s 12% appreciation since 2007 and if you were lucky and bought when everyone was panicking (and retail public has usually a very bad record on buying when everybody is panicking) then you are looking at 42% appreciation in 7 years, that’s a growth of 1.71% or 6% annually respectively. So, if you put money into an index fund, you make more.

        I was also a strong believer of gold. If you go to my blog and go to videos I have there, majority of videos are from the gold guru Peter Schiff with whom I agree on many things. Go and watch those videos. I also read his books, I watched videos by Mike Maloney (he has excellent videos on currency vs. money topic), but there is one factor and that is the global economy and currency system and strong, manipulative central banks. If you believe that central banks let the music stop then yes, invest into gold, but I strongly doubt it. They will do whatever it takes to keep dollar rising, yen falling Aussie dollar skyrocketing and vice versa. Unfortunately, gold no longer plays a role of currency in our world and never will. It is like hoping that once we run out of crude oil we will start using horses again for transportation because horses always were and are a transportation vehicle, so to speak. And if dollar ends one day, we will have other sort of currency such as electronic currency like bitcoin (which I personally do not believe in but it may one day become a trend). As long as people will accept dollar and will make enough to cover its inflation, they will never go back to gold.

        So yes you can use gold as your investment but I will never do that. I might invest into gold as a hobby due to its shiny look but not as an investment. Just my two cents and not hatred at all.

        • Thanks for sharing, Martin.
          You say theres no hatred towards the asset class, but reading between the lines, I do feel that you are getting emotional about gold/silver. It is simply an alternate currency if that makes any sense to you…a hedge against financial crises and recessions. Nowhere on this site have I suggested selling every single thing and moving 100% into gold and sitting on it.

          Gold and silver will always be a part of the system, whether you like it or not. Try telling 1.25B Indians that gold is a worthless pet rock and government sanctioned paper currency is the only form of currency that makes sense in this day and age. If you havent been following the news, 86% of the bills in circulation was discredited overnight and gold now trades at 2-3 times the spot price in the otc market. Whether something like that will happen in the US is questionable and we can argue all we want about how the future will unfold. As Ive always said before — this isnt just about the US. There is more to the world than just US$.

          cheers
          R2R

  5. Thanks for the update on your investment purchases. The bond fund is particularly interesting and I’ll be curious to see how that plays out after the light holiday trading week. Cheers!

    • As far as the EM bond fund is concerned, there are plenty of points and the system is pretty complicated to think about when considering this asset class. I have mixed feelings about it…I am still thinking whether I want to keep putting money into this regularly, but for the meantime Ive started off with a small token position to get my feet wet. Hopefully I’ll make up my mind on it and provide an update in the coming months.

      cheers
      R2R

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