RE:RE:RE:RE:RE:$300 000 portfolio minimum
Quintessential1 wrote: I don't have a margin account but should. If you are not maxing out your portfolio leverage you are short changing yourself. I would say the costs associated with a margin account could end up being less than the taxes owed on money coming out of an RRSP being taxed at a full nominal rate. Given that the margin costs are being covered by the divi alone the rest is like free money.
GLTA
loopsbutterfly wrote: sorry $300 000 but fully paid...no margin account
Get a margin account and learn how to utilize options... you can create your own dividends while owning some companies, you can get lower than market prices on getting in, or just free money if they fail, and you can jump Deeper in a name...
Example in CJ:
Buying 746 shares of CJ is about $5000 on the open market and you get $44.76 in dividends a month...
Using a put option you can buy a lot of 100 shares with only about $200 of Margin use... so you can get 2500 worth of shares, get paid a small premium of a couple hundred dollars (lowering your entry cost). So now you bought $16,750 worth of shares, got paid let's say $250 to make it clean, so that's $16,500 your purchase will cost you, you put $5000 you were gonna originally use down so now you only have a owing balance of $11,500... my current interest is 8.5% so on tha it would cost $977.50 for year or $81.46 per month, but you recieve $150 in dividends so after interest your still ahead $68.54... and the spred will get larger as you pay down the balance... and you will site have have a few thousand of margin available to make your next move or protect you from volatility.
CJ isn't the optimal stock to use options for tho, it doesn't fluctuate much so your premiums are quite low, but as stated before, even coming out even after fees on the premiums you can buy more shares with less down which is itself a positive... I use CJ's dividend to offset plays on stocks that dividends are lower than the Margin interest, so like AEM, ARE, BTO, CNR... I used this stratagy to buy a bunch more AEM at $66 and ARE near $11 about a year ago...