Passive Income Update – Aug 2018

Welcome to our monthly passive income update for August 2018. This is part of the scorecard series where we track our dividends and other sources of passive income. We also include changes and updates related to our investments during the month – showing the overall progress.

Passive Income  Update

Passive income for the month of August 2018 was C$558.23. The passive income for the month comprised of US$131.94 and C$385.39 (exchange rate is US$1 = C$1.31).

The change for the month is -19.67% QoQ and -32.02% YoY for the month. This brings our passive income to $6,096.09 YTD and achieves 55.4% of our annual goal of earning $11K.

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Outlook for September 2018

Summer is almost over, and things are getting very interesting in the global financial markets. The talk of town is the start of EM currency crisis. August saw the spectacular fall of Turkish Lira and with it, the Turkish markets. While the media played it as a local event that would not effect the global markets, that tone shifted very quickly, as other EM currencies started falling — Argentinian Pesos, Indian Rupees, South African Rand, Brazilian Real all took a pounding in the last few weeks of summer. Not only the EM contagion is starting to play out, but also developed markets look precarious — with Euro trending down, British pound heading down; Aussie dollar and Canadian dollar are starting to show weakness too thanks to the housing bubbles — anyone and everyone you talk to, advises running to the safety of the almighty US dollar. With everyone piling on one side of the trade, it doesn’t take much of an imagination to figure out what happens after this crisis plays out…

Add to the fact the ongoing tariff war crusade initiated by the US administration. While the initial winner seems to be the US (and the US$) most international trading partners, including its closest allies, have indicated being treated unjustly and looking for alternatives. If history teaches us anything, tariff wars almost always never turn out as originally intended, so it will be interesting to see how the bureaucrats maneuver the upcoming minefield.

So, in just matter of months, we have gone from a narrative of “coordinated global growth” to “EM crisis/global contraction”.

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Recent Buy – IPL

BuySell

A quick update on a a recent purchase in my portfolio to close out the month of August.

I had put in a low-ball offer a few weeks/months ago, which got executed just before the market closed last Friday. In this purchase, I added 100 shares of Inter Pipeline Ltd (IPL.TO) @ $24.00. IPL is a pipeline company that I have been a shareholder in for a long time and continue to build my position over the years. I have doubled my position since the start of 2018 with these purchases. IPL now makes a substantial position in my portfolio and will possibly look at limiting any more build-up since I do not want to own too much portfolio concentration in a single stock. With a current yield of 7%, this purchase adds CAD$168 to my forward dividend income.

Full Disclosure: Long IPL.TO. Our full list of holdings is available here.

2 Recent Buys – BCE, XLY

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A quick update on a couple of recent purchases in my portfolio. For this round, I added to existing positions.

  • First purchase: I added 60 shares of BCE Inc (BCE.TO) @ $53.40. I’ve had my eye on the telecom sector for a while and after a lot of lowball offers that did not get executed, I decided to up my offer a bit and finally got filled. BCE owns interests not only in the telecom, but expanding heavily into the media & content business. With the stock yielding 5.6%, the purchase adds a nice $181.20 in forward annual dividends.
  • Second purchase: I added 2000 shares in Auxly Cannabis (XLY.V) @ $1.07. The company has recently undergone some transition and changed name from Cannabis Wheaton Income (CBW) to Auxly Cannabis. Auxly remains a great financier in the field of cannabis and has a great leadership team with Chuck Rifici as CEO. A sector in its infancy, there is immense chatter about buyout and large investment targets, esp with the large alcohol companies targeting Canadian LPs for marijuana-flavored drinks. I am a little disappointed with the price I paid since I was looking to add at $0.75, but my trade didnt get executed (missed it by $0.01), and the following day the stock rallied massively. Still think its a decent price and my ACB remains well under $1.

Full Disclosure: Long BCE.TO, XLY.V. Our full list of holdings is available here.

Personal Challenges & Habit Formation 2

This blog has always been finance and investment related, and I never shared much on the personal front. However, I figured I will share some of my personal goals that I have struggled with & achieved so far in 2018 — just because its something that I have been reading & thinking a lot about recently and find it interesting. My major personal goal for 2018 was related to habits (and habit formation). Over the years, I had fallen into some bad habits while letting go of the good ones; so I am making a conscientious effort to change things one month at a time.

These small incremental changes can have a profound effect over time. The benefit (and detrimental effect, in the reverse case) of compounding is something most investors are well aware of. Same concept applies to life and building those marginal gains and compounding them. This article from James Clear and the associated image conveys this point well.

You will notice that most of these challenges are health related. After finance, most of my focus & passion surrounds health. In addition, I am always looking to optimize things so that I can live longer and healthier life. I wrote about Jan-Apr update in spring. This is a follow up post revisiting all challenges since Jan + new ones from May-Aug.

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