January 2016 Portfolio Update – 3 Purchases & A Sale

wood stock

One of the reasons I started this blog was to educate others and to improve my own investing. This is why I like to keep my readers up to date on my portfolio changes. I’ve been getting a bit behind with my portfolio updates so this is going to be a catch-up post of four January 2016 transactions that I haven’t discussed yet.

By keeping an open book of my portfolio and changes to it, I hope to generate discussion so others can see how I put my investing philosophy into practice. For the most up to date portfolio changes follow my twitter account as I will usually tweet the day I buy or sell stocks and then follow-up with a blog post.

January 20, 2016

On January 20, 2016 I took advantage of the stock market drop and purchased three companies: IBM [IBM Trend], Enbridge [TSE:ENB Trend], and National Bank [TSE:NA Trend]. I don’t know you if you remember, but January was a pretty ugly month for the stock market. Prices had been dropping for a few weeks,

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Portfolio Update: IBM Purchased

International Business Machines

IBM [IBM Trend] is one of those stocks that I didn’t think I’d get to own because of its low yield, but in the past 5 days the stock price has dropped 11%, so I was able to initiate a position with a dividend yield of 2.7%. I typically like to invest in companies with a dividend yield of at least 2.5%. Going back to 1999 there have only been two years where the highest dividend yield was above 2.5%. In 2008 the highest dividend yield was 2.7% and in 2009 it was 2.6%. To be able to buy in at a yield level similar to when the financial crisis was going on, is enticing. While 2.7% isn’t the highest dividend yield, it is high for IBM. Take a look at chart below and you can see that historically this is a high dividend yield.

Yield isn’t the only value metric that looks enticing for IBM, its P/E is currently 10.2 according to MorningStar. Not to mention Warren Buffet is an investor having purchased shares a few years ago around $170. It feels good to buy in

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