Tuesday, May 8, 2012

New Purchase - TD

I swooped in and picked up 16 shares of Toronto Dominion (TD) this afternoon.  The shares were bought at $80.315 + commission in my ROTH IRA to avoid withholding taxes. This amounts to a yield of 3.56% and about $46.08 annual income depending on exchange rates.

I've spent time thinking about my portfolio and what I can do to keep it balanced.  It's painfully obvious I am lacking financials and foreign stocks.  TD makes sense because it fills both needs.  I want foreign stocks to diversify away from the the US dollar more than attempting to capture foreign business.  I figure international powerhouses such as MCD, JNJ, and KO cover the globe rather well.

Frankly, financials is a sector I do not like.  I do not trust large U.S. banks, some of which needed to be bailed out in recent years.  How ridiculous is that?  It wasn't just a bank here and there, it was widespread.  Something is wrong with the whole system.  Luckily our friends to the north do banking right.  I don't feel like describing it all right now, but Canadian banks didn't need bailouts. The major Canadian banks did not cut or eliminate dividends during the crisis.  Yes the dividends were frozen temporarily, but that is a BIG difference from cutting.

If anyone out there uses TD Ameritrade for a broker, please start day trading to pad my dividend income...

Just playing!


  1. CI,

    Great pickup. Our brothers to the north have a number of great dividend/dividend growth stocks to pick up in the banking, telecom and consumer sectors. I've looked at the banks before and the balance sheets are much cleaner than our big banks.

    That being said, I do wonder if Canada's real estate is in a bubble? I've heard it both ways but there is no denying that the real estate in Canada, especially large cities, is very expensive. From what I understand however, is that trading on mortgages and debt is much different up north which would likely lead to a much softer landing if such a crash were to happen.

    Best wishes!

    1. Thanks. It appears I pulled the trigger a little too early with that purchase, but it is what it is.

      From what I've researched, Canadian mortgages are full recourse. So the home owners can't just walk away like they can here. Plus the loans typically have 20% downpayments or insurance if lower. Obviously a housing bubble is a bad thing, but in my mind Canadian banks are in a better position if that happens.

      You remember interest only loans? US banks and mortgage companies came up with ridiculous ideas to increase business. Of course it all backfired in the end.

      We could learn a thing or two from Canada.

    2. "We could learn a thing or two from Canada."

      I agree 100%!