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Originally posted by DigiNut Actually, most of the REITs and other income trusts and dividend funds have been doing incredibly well. Likely because shares were beaten up so badly but they managed to keep their dividends. But at my age I'm not going to be satisfied with a lame-o 15-20% annual return. That's retirement income, not growth. If I can swing just 5% per week, I'll be laughing.

Yea, there are a few income trusts that have remained pretty stable over the last little while and give out great yields if that's your sort of thing. BPF-UN.TO and CGX-UN.TO come to mind. I personally think that being this young and investing in low-beta, high yield equities is preeeeeeeetty boring and a waste of time. You don't learn all that much, and you're not making trades on an active basis. At this young an age, education is paramount and the only way to get that is to be an active player in the market....taking risks and going outside of your comfort zone (albeit as calculated as possible).

My $0.02

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Originally posted by slingshot I personally think that being this young and investing in low-beta, high yield equities is preeeeeeeetty boring and a waste of time.

I've got about 1/3 in that type of stuff, want to guarantee at least a little bit of a retirement fund in case I blow everything else. But it's dull for sure. I'm waiting for just one more dive before I pull everything out of the old mutual funds (from back when I opened the RSP but wasn't interested in active trading - bah, useless).

I wouldn't say it's a waste of time, since it isn't really occupying any time, but the chance of retiring by 30 with just those is effectively zero.

any thoughts on gold? I'm a believer of massive inflation in the future due to all the new money entering the system, but when?

I made some money on HBU on the tsx

also have been enjoying YLO.un with a 20% avg yield.

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Originally posted by simms327 also have been enjoying YLO.un with a 20% avg yield.

Do you really think that's sustainable though?

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Originally posted by Skipper Do you really think that's sustainable though?

Why not? It's just a dividend, been steady for at least 4 months despite the drop. P/E is good.

That is the one nice thing about dividend funds - doesn't matter how much the share price gets beat up, your earnings are always based on the original purchase price. As long as the dividend doesn't get cut, that is - but that's rare. And let's say they do cut it to say, 0.07 instead of 0.10, who cares? That's still a 14% return which is better than any mutual fund.

If this is about the whole income trust taxation thing, traders are far too paranoid about that.

Also remember to open a tfsa account with your broker. I opened mine in the first week of Janurary,deposited the max of $5,000 and double my initial deposit.

TFSAs are the best thing government has done in a long time, it wont be until they screw it up again.

And if you lose money in your tfsa than your fucked.

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Originally posted by DigiNut Why not? It's just a dividend, been steady for at least 4 months despite the drop. P/E is good. That is the one nice thing about dividend funds - doesn't matter how much the share price gets beat up, your earnings are always based on the original purchase price. As long as the dividend doesn't get cut, that is - but that's rare. And let's say they do cut it to say, 0.07 instead of 0.10, who cares? That's still a 14% return which is better than any mutual fund. If this is about the whole income trust taxation thing, traders are far too paranoid about that.

Companies will go a long way to prop up a dividend, what I'm asking is if it's being supported by actual, sustainable operating cash flow.

There are a lot of great yields out there, but I would argue a lot of them are prime picks for a cut in the next 9 - 12 months.

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Originally posted by Skipper Companies will go a long way to prop up a dividend, what I'm asking is if it's being supported by actual, sustainable operating cash flow.

And the answer is... yes. They still have over $100M in net income, unless I read their statement wrong.

Can you give a specific example of one of these prime picks for dividend cuts? I'm just curious...

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Originally posted by DigiNut And the answer is... yes. They still have over $100M in net income, unless I read their statement wrong. Can you give a specific example of one of these prime picks for dividend cuts? I'm just curious...

Net income is not a measure of cash by any stretch of the imagination.

Distributable cash is a non-GAAP measure but is generally looked at by the street to determine how sustainable a divvie is. Doing sensitivities around the distributable cash figure will give you a better sense of what the chances are for a cut. But generally if the stock price is low enough to give you a yield of 15+%, the market has already priced in the cut as if it's a sure thing.

On top of that, when the yield is over 15% a company's cost of capital goes through the roof and you can pretty much bet that they won't be raising equity with a yield that high - and if they're tapped out on their debt then they're screwed if they need money. No one comes to the market for money when it costs 15%.

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Originally posted by Skipper Net income is not a measure of cash by any stretch of the imagination. Distributable cash is a non-GAAP measure but is generally looked at by the street to determine how sustainable a divvie is. Doing sensitivities around the distributable cash figure will give you a better sense of what the chances are for a cut. But generally if the stock price is low enough to give you a yield of 15+%, the market has already priced in the cut as if it's a sure thing. On top of that, when the yield is over 15% a company's cost of capital goes through the roof and you can pretty much bet that they won't be raising equity with a yield that high - and if they're tapped out on their debt then they're screwed if they need money. No one comes to the market for money when it costs 15%.

Not necessarily, it depends on how the trust decides the metrics to which their distributions are based. It's going to vary between industries. Boston Pizza for example distributes based on a percentage of sales so that cash flow could be easily predicted by modeling sssg as well as new restaurant openings. Issuing new units in this case wouldn't necessarily be a problem due to what their distribution is tied to. With sound expansion plans it may actually be relatively easy because any increase in overall sales would benefit the distribution.

In something like Yellow Pages, it seems as if they distribute based on what's leftover so the state of their distribution is pretty much tied to the state of their future cash flow projections. In this case rather bleak given the demise of essentially anything in print form.

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Originally posted by slingshot In this case rather bleak given the demise of essentially anything in print form.

YP has significant online assets.

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Originally posted by slingshot Not necessarily, it depends on how the trust decides the metrics to which their distributions are based. It's going to vary between industries. Boston Pizza for example distributes based on a percentage of sales so that cash flow could be easily predicted by modeling sssg as well as new restaurant openings. Issuing new units in this case wouldn't necessarily be a problem due to what their distribution is tied to. With sound expansion plans it may actually be relatively easy because any increase in overall sales would benefit the distribution. In something like Yellow Pages, it seems as if they distribute based on what's leftover so the state of their distribution is pretty much tied to the state of their future cash flow projections. In this case rather bleak given the demise of essentially anything in print form.

I'm not entirely familiar with Boston Pizza but isn't the distribution 11.5 cents/month? How often does that fluctuate with same store sales?

I guess in terms of raising money, regardless of whether the money increases the sales which supports or increases the distribution, you're still paying 15%. Issuing equity with this kind of yield is expensive, it's like a 15% interest rate on a bank line - and when rates are where they are, it hurts to pay 15% for any form of capital.

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Originally posted by Skipper But generally if the stock price is low enough to give you a yield of 15+%, the market has already priced in the cut as if it's a sure thing.

Typical. Not even a nod to the fundamentals or the company itself, just a bunch of technical ifs and buts.

Good, I hope the jittery day-traders watching streaming index feeds ignore these equities. It means less wild price fluctuations for conservative investors looking for safe returns (i.e. retirement income).

I'm pretty new to all of this Trading Stuff...

But can someone just give me a better explanation of VTSO?

Thanks!