When Do You Clean Your Portfolio?
Wise investors have rules for buying investments. It is also good to have rules for selling your investments. I can be patient with falling prices, but when certain fundamentals change, then I consider selling and reinvesting the proceeds. If you buy individual stocks, this is far more important than if you are focused on ETFs and mutual funds. However, there are also times when I sell ETFs to invest the cash I receive in other ETFs.
Said Goodbye to TU – TELUS Corporation
The reason is simple: the current payout ratio is greater than 100%. Furthermore, this company split the shares 2-for-1, so I wound up with 800 shares instead of 400. While this, by itself, isn’t a bad thing, the dividend fell more than it should have post-split. Therefore, I sold my shares. This gave me an opportunity to buy more shares of ETF PFFD, more of ILPT, and an opening position in PETS. ILPT is an industrial REIT.
Said Goodbye to UNM – Unum Group
UNM is another situation where the dividend story lacks meaningful growth. An insurance company should be able to grow their revenue, profits, and dividends. Because MFC is a key insurance holding in our portfolio, it made more sense to replace the UNM shares with MFC. Compare the following two images and you will see why. Also notice that I get one more dividend from UNM, and the Ex-dividend date for MFC is May 17. This is almost like getting a “double” dividend.
Full Disclosure
Cindie and I own 1,400 shares of MFC as a long-term investment. PETS is a speculative short-term holding, but it does pay a dividend. PFFD and ILPT are long-term holdings.
Know Your Flocks & Herds 