I may not have to worry about a layoff, but I’m still losing money as a result of dividend and distribution cuts. The last two months have made it clear why one doesn’t want to get too attached to any single source of income. So even as I’m making money from these stocks, I need to use the proceeds to diversify into a different income source.
Here’s what I’ve lost on an approximate, annualized basis:
Enerplus Resources Fund (ERF.UN): $18
Enervest DivIncome Trust (EIT.UN): $48
Freehold Royalty Trust (FRU.UN): $50
ARC Energy Trust (AET.UN): $15
Pengrowth Energy Trust (PGF.UN): $3
Total Lost: $134
OK, I know, that’s not much, but diversified over those sources that’s going to lose me another 20 or so units, plus the reinvestments on those units. Over time it snowballs. So that $134 actually represents an entire stream of future earnings, compounded and reinvested (to say nothing of factoring in any future distribution increases on each of those stocks).
Significantly, each of those holdings is related to the oil industry demand slowdown. And we all know that at some point oil shares are going back up since oil is a finite resource (no one can argue with that). So I’m not too worried about these. But I’m not buying any more oil just yet. When I do I will probably buy a big position in Crescent Point Energy Trust (CPG.UN), and that will round out my oil stock portfolio for the time being.
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