Canadian Grunt
Recycles dryer sheets
My plan to lever into the market
I have decided to lever into this market to take advantage of a once in a lifetime event. I have good positive cash flow, A guaranteed government job, and receive a military pension. I have no debt except for my mortgage, which is less than rent where I live.
I am starting with 25,000 from my line of credit as I see plenty of opportunity in the market and will lever up from there based on my assessment of recovery.
I am allocating 1000 a month from my cash flow to this project.
Currently my line of available credit is in excess of $300,000 but I won't go past $100,000 if that.
Current int rate on my line of credit is 4.25%
Borrowed money for investments is tax deductable at 32% based on my income
Carrying cost for $25,000 is 106.00 month
Here is the plan
Investment % and dividend payout rates for the initial $25,000:
60% I Shares dividend (XDV) with 4.633% current payout
15% Bank of Montreal (BMO) with 6.443% current payout
10% Husky Energy (HSE) with 6.177% current payout
15% I Shares Canadian Trusts (XTR) with 15% current payout
Averaged payout for the portfolio is 6.6%
The dividend payments will pay for the interest costs on the line of credit. Once I see signs the market is stabilizing I plan to lever up a further 25,000 into I Shares Dividend (XDV).
I am also planning a large pirchase of Horizons Beta Pro Energy Bull Plus ETF (a 2X levered investment) when I feel the market has stopped discounting energy stocks. Some of the stocks in the ETF are trading at 1X earnings others 3X earnings....all are in production and have positive cash flow.
I see the potential down side as no more than 20% near term for the initial $25,000
Upside 50% over 5 years.
Appreciate comments on the plan.
I have decided to lever into this market to take advantage of a once in a lifetime event. I have good positive cash flow, A guaranteed government job, and receive a military pension. I have no debt except for my mortgage, which is less than rent where I live.
I am starting with 25,000 from my line of credit as I see plenty of opportunity in the market and will lever up from there based on my assessment of recovery.
I am allocating 1000 a month from my cash flow to this project.
Currently my line of available credit is in excess of $300,000 but I won't go past $100,000 if that.
Current int rate on my line of credit is 4.25%
Borrowed money for investments is tax deductable at 32% based on my income
Carrying cost for $25,000 is 106.00 month
Here is the plan
Investment % and dividend payout rates for the initial $25,000:
60% I Shares dividend (XDV) with 4.633% current payout
15% Bank of Montreal (BMO) with 6.443% current payout
10% Husky Energy (HSE) with 6.177% current payout
15% I Shares Canadian Trusts (XTR) with 15% current payout
Averaged payout for the portfolio is 6.6%
The dividend payments will pay for the interest costs on the line of credit. Once I see signs the market is stabilizing I plan to lever up a further 25,000 into I Shares Dividend (XDV).
I am also planning a large pirchase of Horizons Beta Pro Energy Bull Plus ETF (a 2X levered investment) when I feel the market has stopped discounting energy stocks. Some of the stocks in the ETF are trading at 1X earnings others 3X earnings....all are in production and have positive cash flow.
I see the potential down side as no more than 20% near term for the initial $25,000
Upside 50% over 5 years.
Appreciate comments on the plan.